Norm Boersma didn’t originally plan to be where he is today. But sometimes, you just have to roll with the punches. Hard work and mettle have led to his success as chief investment officer of Templeton Global Equity Group and as lead portfolio manager for Templeton Growth Fund. We had the opportunity to sit down with Boersma to discuss how he joined the organization, and the lessons he’s learned along the way.
Beyond Bulls & Bears: How did you first get into the investment management industry?
Norm Boersma: I graduated university in the early 1980s, when the job market was fairly bleak, so I decided to work for my dad, who had an electronics firm. After my first year of employment there, he sold his firm. I continued to work at the firm under its new owners for a year, but it became clear to me that without an engineering degree, it was not likely to be a fruitful long-term career path. I had been working on my MBA part time and already had an economics degree, so I decided to go back to school full-time and finish my MBA.
The stock market had always been an interest of mine. I had been trading stocks in my own account and learning the ropes the hard way at times—by losing some of my money. But I considered it a valuable exercise in the school of hard knocks.
When I finished graduate school, I was lucky enough to get into a finance training program with the pension fund at an electrical utility in Ontario, Canada. After five years, I was running a small-cap portfolio and met Don Reed [the president and chief executive officer of Franklin Templeton Investments Corp. in Canada] through a mutual friend. He was looking to expand the Templeton group and I joined him in Toronto. That was the beginning of my career at Templeton.
Beyond Bulls & Bears: What advice would you give to someone who is just starting their career in investment management?
Norm Boersma: My advice is not to think you know everything coming out of university or grad school. I think you really need to embrace that you have lots to learn.
I do think education is very important, but there’s no substitute for real-life, hands-on experience and living through various market cycles. And often that means you may have to do things that aren’t as glamorous as you were perhaps led to believe in school. It’s all part of the learning process. Embrace it and be enthusiastic about it, and I think you’ll do well.
Beyond Bulls & Bears: Does it ever get difficult as a value investor when it takes longer for a stock to react than you perhaps anticipated?
Norm Boersma: Well, that’s the most difficult part of being a value investor. To paraphrase a well-known saying: The reason not to be a value investor is that the markets can stay irrational longer than you can stay solvent.
I think there’s a lot of truth to that. Sometimes you find situations where the market has really overreacted, and you have done your work, and you understand what you have – but the market takes a very long time to recognize the value. And in the meantime that particular investment continues to underperform.
Beyond Bulls & Bears: What were some of the most important lessons that you learned working with the late Sir John Templeton, and how did they shape the way you do things today?
Norm Boersma: I certainly watched him during my first few years at Franklin Templeton. One of the things he was good at was finding disconnections and taking advantage of long-term opportunities.
For example, I can recall during the Asia crisis in the mid-to-late 1990s, he began to invest heavily in what was considered one of the most problematic Asian countries at that time and ignored by the broader investment community. But Sir John looked at it from the viewpoint that fundamentals were good in many companies in the region, and those that were punished the most could have the most potential reward when things turned around.
That’s the type of approach we still try to emulate.
Beyond Bulls & Bears: What are some of the things that still take you by surprise from time to time with respect to the industry?
Norm Boersma: I’m always amazed that the markets seem to make the same mistakes over and over again. Of course we aim to take advantage of them, and that’s part of what investing is about. It’s sort of a systematic approach to exploiting the markets’ repeated mistakes.
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What Are the Risks?
All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Current political uncertainty surrounding the European Union (EU) and its membership may increase market volatility. The financial instability of some countries in the EU, including Greece, Italy and Spain, together with the risk of that impacting other more stable countries may increase the economic risk of investing in companies in Europe. The Templeton Growth Fund’s risk considerations are discussed in the prospectus.