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Prices fall furthest below intrinsic value when the most sellers have given up, so the best purchase moment is when the outlook appears hopeless rather than when conditions look better. Market cycles follow a predictable emotional sequence: bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The investor buys from despairing sellers and sells to euphoric buyers.
As war broke out in Europe in 1939, Templeton borrowed about $10,000 and bought roughly 100 shares of every listed US stock trading under $1, which came to about 104 companies, many of them in bankruptcy. He reasoned that wartime demand would revive even distressed businesses. He held the shares for about four years, and the position roughly quadrupled with only a handful becoming worthless, showing that a diversified basket of despised stocks can absorb individual failures and still profit from a broad recovery.
Limiting your search to your home market limits the number of bargains you can find, so compare prices against value across every country and buy wherever they are lowest. Templeton moved into Japan when its stocks traded at a few times earnings, far below US valuations, while most Western investors dismissed it as a maker of cheap goods. He then sold as Japanese valuations rose to extreme levels before the market's 1989 peak, which shows that the same valuation discipline that tells you when to enter also tells you when to leave.