On July 8, 2008, theworld lost an investing icon — and I lost a good friend.

Sir John Marks Templeton, the man Money magazine called “arguably the greatest global stock-picker of the century,” died of pneumonia in Nassau, the Bahamas. He was 95.

Sir John had a remarkable life. He had an investing career that dazzled Wall Street, organized some of the most successful mutual funds the world has ever seen, led investors into global markets, wrote best-selling books on finance and spirituality, and established charities that now give away US$70 million a year.

His investing career is the stuff of legend. In 1939, at the beginning of the Second World War, the 26-year-old Templeton borrowed $10,000 and bought 100 shares each in 104 companies that were selling at $1 a share or less, including 34 in bankruptcy. A few years later, he was turning large profits on 100 of those companies. Just four turned out to be worthless.

In 1940, he bought a small investment firm that became Templeton Dubbrow and Vance, the early foundation of his empire. Sir John entered the mutual fund business in 1954, establishing Templeton Growth Fund in Canada. The move cut the taxes of many shareholders — it’s hard to believe, but our country had no capital gains taxes at the time — and emphasized the global reach of the firm’s investment strategy. And so began Canada’s long affection for Sir John.

The flagship fund’s growth was dramatic. Templeton Growth Fund reported a 14.5% average annual compound return from 1954 to 1992; a $10,000 investment with dividends reinvested would have grown to $2 million. (That assumes reinvestment of all dividends/distributions and not taking into account sales, redemption, distribution or optional charges or income taxes payable by any investor that would have reduced returns.)

Sir John’s stock-picking skills and sell discipline were uncanny. He was a pioneer investor in Japan in the 1960s and later in Russia, China and other Asian markets. He sold major holdings before the technology bubble burst in 2000, and warned years ago that real estate prices were unsustainable.

He was knighted in 1987. Five years later, he sold his firm, the Templeton Group, to Franklin Resources Inc. of San Mateo, Calif., for US$913 million. The merged company is popularly known as Franklin Templeton Investments.

I first met Sir John in the early 1980s, when I was running my own investment-management firm. I was a great admirer of his global outlook and value-driven investment philosophy.

His team actively began to recruit me to run the company. I resisted — I was very happy at my own shop. Then, I took a fateful trip to visit Sir John at Lyford Cay, his home in the Bahamas. I brought no resumé along. For me, this was just a social call.

We spent hours talking — investments, family, politics, Canada, everything you can possibly imagine. It was a terrific day.

I headed home and, on the drive to the airport, I again turned down a job offer. But my time with Sir John stuck with me and, after a month of weighing my options, I said yes. His simple approach to investing, his core values and his customer-driven business principles were enormously appealing to me. I will celebrate my 19th year with the company in September, and it’s been an incredible ride.

There are so many memories. I remember a meeting in New York City in Windows on the World, the elegant restaurant on the top floors of the World Trade Center. Sir John was addressing shareholders. One investor said: “Sir John, why don’t you have Quaker Oats in the portfolio?” He said: “Every morning when I get up, I eat my Quaker Oats Oat Bran. It’s good for me and it tastes good, but everybody knows that’s the case with Quaker Oats, so everybody is paying prices that are too high — and that’s why I don’t own the stock.”

Sir John once said, “Successful investing is not an easy job.” That maxim rings true today, perhaps more so than at any time in recent history. A perfect storm of economic factors — the crisis in the U.S. housing market, skyrocketing oil prices, market volatility around the world and the dramatic rise in the value of the Canadian dollar — have challenged investors across the country.

@page_break@But investors should find wisdom and comfort in Sir John’s key strategies for building wealth and risk:

> Think Globally. In a 1979 interview, Sir John said: “It seems to be common sense that if you are going to search for these unusually good bargains, you wouldn’t just search in Canada. Why not search everywhere?”

Canada represents less than 3% of the world’s equities markets. Why would you say no to 97% of your potential investing universe? International equity mutual funds have posted some of the best long-term returns for investors.

It’s a great safety tool, too. Every investor should diversify and avoid having all his or her eggs in one basket at one time. If you search worldwide, you will find more bargains — and better bargains — than by studying only one nation.

> Be A Contrarian. “People are always asking me where the outlook is good. But that’s the wrong question,” Sir John said in a 1995 interview. “The right question is: ‘Where is the outlook most miserable?’”

This is Templeton’s famous Principle of Maximum Pessimism. If you buy the same securities as other people, you will have the same results as other people. It is impossible to produce superior performance unless you do something different from the majority. To buy when others are desperately selling and to sell when others are greedily buying requires the greatest discipline and pays the greatest reward.

> Shop For Value. “An investor can seek safety by seeking bargains,” Sir John said in 1949. Time and time again, investors buy stocks at the peak of the market and sell when they fall from favour. In fact, you should be doing the opposite.

Make sure the fundamentals are intact. Identifying unfashionable sectors or countries is merely a starting point. The corollary to the Principle of Maximum Pessimism is that the underlying, long-run fundamentals must be sound. Let valuation be your guide.

Rest in peace, Sir John. IE

Don Reed is president and CEO of Toronto-based Franklin Templeton Investments Corp.