Editor's note: On a periodic basis, Milestones will offer its readers an update on Sir John's current thinking about investing and the global economy. Such is the case with this February issue.

The United States' real estate market may be about to tumble. There is tremendous opportunity for foreign investment in China. Be patient, the Dow will rise again — and higher than you might expect.

These are a few of the provocative opinions offered recently by Sir John Templeton in an interview with The Lancz Letter. Alan B. Lancz, 44, an investment advisor based in Toledo, Ohio, compiles this highly regarded monthly publication. Mr. Lancz likes to refer to his profession as "the sacred trust of investing," and credits his relationship with Sir John as key to the development of his thinking.

"Sir John invented what I think of as the Golden Rule of portfolio management," Mr. Lancz said. "Namely, invest other people's money in the same way you would invest your own." A friend for over two decades now, Mr. Lancz frequently telephones Sir John or visits him at his house in Nassau, the Bahamas. Each year, a transcript of one of their conversations appears in The Lancz Letter. This latest public dialogue is typical, in that it includes predictions of what's ahead for Wall Street, alongside updates on Sir John's continuing efforts to encourage scientific methods for the discovery of spiritual realities.

"He's always highly articulate," Mr. Lancz said, "but you really see Sir John's eyes light up and his words come out even more fluidly, when he talks about his spiritual concerns and what's happening at the Templeton Foundation."

Mr. Lancz believes it is both his privilege and responsibility to share news about the annual winners of the Templeton Prize with his subscribers. However, he admits ruefully that he has to curb his own desire to devote broader coverage to such religious topics.

"My readers are brokers and bankers, and very investment oriented," he said. "I include what I can on the spiritual side, but to tell the truth, most of my subscribers are much more interested in what Sir John has to say as a legendary investor." This preference of Mr. Lancz's readers does not disturb Sir John in the least. Indeed, he is the first to admit that the Templeton Foundation has sufficient reserves with which to fund its varied research projects thanks to his own pioneering success as founder and manager of the Templeton Mutual Fund Group. Sir John is a tireless advocate of the importance of being a wise investor, whether he is conducting an interview with Alan Lancz, or making an appearance on CNN's "Larry King Live" or CNBC's "Louis Rukeyser's Wall Street." As he frequently says, America is the first nation in all history where over half the families own stocks. A cheerleader, yes, but Sir John is hardly a blind optimist. For instance, in this most recent issue of The Lancz Letter, he identifies several dark clouds on the horizon, one of which is the over-inflated valuation of American real estate.

"Real estate is by far the highest it's ever been in America, and it hasn't gone down at all, especially compared to the stock market," he warned. "That's the first time that's happened here. I have been around for a long time, and in all previous stock market declines, real estate has gone down also."

He offers as well a blunt assessment that the technology/telecommunications crash of early 2000 was the biggest industrial disaster in history. It will take several more years, he feels, for the United States economy to recover fully from the aftermath. "Before this, the biggest one in the United States was 1929," Sir John claims, "but this (the dot.com crash) is far, far bigger."

While his professional integrity constrains him to speak the truth about such dire realities, Sir John is quick to counsel against focussing too narrowly on things that may go wrong in the world. He suggests both availing oneself, and being wary, of the speed with which magazines, newspapers, and electronic information enter our lives. Sir John believes that unfortunately most of this information caters to what he calls a basic human flaw, namely, our fascination with bad news.

"If you put two stacks of newspapers out, and one says 100,000 airplanes landed safely today, and the other said one airplane crashed, you'd buy the one that said one airplane crashed," he illustrated. "We're living in the most glorious period of world history, but not everyone is happy because they don't train themselves to focus on the good things." Sir John suggests that our fascination with bad news extends to recent accounting and corporate governance scandals such as Enron. Though these are serious matters, he feels far too much attention has been paid to them. "The fact is that for every dishonest person on Wall Street, there are a hundred honest ones."

Finally, similar to his pioneering investments in 1960s Japan, Sir John is currently quite bullish on China. He reasons that the Chinese are thrifty and save 24 cents of every dollar they earn. This accrued capital will soon provide them money to be entrepreneurs and to invest in their nation. China, he states, now has the most favorable balance of trade it has ever had. Furthermore, the country has almost no national debt. "There are big reasons for thinking it would be good to invest in China," he concludes.

Sir John Templeton's thinking first influenced Alan Lancz in the late 1970s when, as an undergraduate studying psychology and business at the University of Toledo in Ohio, he was surprised to discover that no courses were offered in investment strategies. Rereading Sir John's books, which he'd first discovered as a youngster, proved to be an invaluable extracurricular education. Years later, as he was embarking on his career in finance, Mr. Lancz had a lucky break. He was invited to go to the Bahamas along with some other investment advisors, to meet with Sir John. Though this was over two decades ago, as he describes this visit and its aftermath, Mr. Lancz still sounds a bit incredulous.

"It was unbelievable to me. I was a young guy from Ohio, just building a career, and he was managing billions of dollars. All the time he spent with me, and the effort." Mr. Lancz paused for a moment before speaking again. "There was no financial reason for him to do it. It was just him, helping someone out. It shows what a rare guy he is."

"To me, Sir John is the father of global investing," Mr. Lancz continued. "Before anyone else, he was into diversification, and he was humble enough to see that America was not the only place with bargains. He made it possible for the average investor to come along with him into foreign countries and companies."

Sir John is still anxious to help investors, especially those who are willing to take a long view. Typical of this far-sighted approach is his recent observation that the Dow Jones industrial average, which is at about 8,500 now, will be above a million by the century's end. What strikes Alan Lancz as remarkable about this comment is that Sir John Templeton, who turned 90 last November, has absolutely no trouble thinking 97 years into the future.

"To me, it's fascinating," Mr. Lancz said. "It's an intriguing part of the man. It's what makes him tick."

Sir John's interview with Alan Lancz is available on line at www.ablonline.com, or telephone (419) 536-5200.

Faithful Finances 101: From Fear-based to Faith-based Investing, by Gary Moore, with a foreword by Sir John Templeton is an invaluable resource for integrating faith and finance. You can order a copy in Spring 2003 through the Templeton Foundation Press at 1-800-621-2736.

Stephen Henderson, a writer based in New York City, contributes frequently to the New York Times, The Baltimore Sun, Town & Country, and Religion News Service, as well as other publications.