John Neff
Encyclopedia
John Neff is one of the best known mutual fund
investors of the past 40 years, notable for his contrarian and value investing
styles as well as heading Vanguard
's Windsor Fund. Windsor was the best performing mutual fund during his tenure and became the largest fund closing to new investors in the 1980s. Neff retired from Vanguard in 1995. During Neff's 31 years, from 1964 to 1995, Windsor returned 13.7% annually versus 10.6% for the S&P 500
.
Neff has referred to his investing style as a low price-to-earnings (P/E) methodology, though others consider Neff a variation of the standard value investor. He is also considered a tactical contrarian investor who placed emphasis on low-tech security analysis, that is, digging into a company and its management and analyzing the books, in contrast to David Dreman
, who is more of a statistical contrarian investor. Neff's strategies generated relatively high turnover with an average holding period of three years. One area in which Neff is similar to value investors such as Warren Buffett
is in emphasizing ROE (return on equity
), stating that it is the single best measure of management effectiveness. However, differing from many value investors, Neff places emphasis on predicting the economy and projecting a company's future earnings. Also, Neff liked to pick stocks where dividend yields were high, in the 4% to 5% range.
The Wharton School named a professorship in their business school after Neff, the John B. Neff Professor of Finance. Also, Neff published a well received book on his investment strategies in 2001:
The University of Toledo College of Business has named the Department of Finance in His honor. It is called the John B. and Lillian E. Neff Department of Finance.
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
investors of the past 40 years, notable for his contrarian and value investing
Value investing
Value investing is an investment paradigm that derives from the ideas on investment and speculation that Ben Graham and David Dodd began teaching at Columbia Business School in 1928 and subsequently developed in their 1934 text Security Analysis...
styles as well as heading Vanguard
The Vanguard Group
The Vanguard Group is an American investment management company based in Malvern, Pennsylvania, that manages approximately $1.6 trillion in assets. It offers mutual funds and other financial products and services to individual and institutional investors in the United States and abroad. Founder...
's Windsor Fund. Windsor was the best performing mutual fund during his tenure and became the largest fund closing to new investors in the 1980s. Neff retired from Vanguard in 1995. During Neff's 31 years, from 1964 to 1995, Windsor returned 13.7% annually versus 10.6% for the S&P 500
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
.
Neff has referred to his investing style as a low price-to-earnings (P/E) methodology, though others consider Neff a variation of the standard value investor. He is also considered a tactical contrarian investor who placed emphasis on low-tech security analysis, that is, digging into a company and its management and analyzing the books, in contrast to David Dreman
David Dreman
David Dreman is a noted investor, who founded and is Chairman of Dreman Value Management, an investment company. The company focuses on the assets of mutual funds, pension, foundation, and endowment funds, as well as high net-worth individuals....
, who is more of a statistical contrarian investor. Neff's strategies generated relatively high turnover with an average holding period of three years. One area in which Neff is similar to value investors such as Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
is in emphasizing ROE (return on equity
Return on equity
Return on equity measures the rate of return on the ownership interest of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity . ROE shows how well a company uses investment funds to generate earnings growth...
), stating that it is the single best measure of management effectiveness. However, differing from many value investors, Neff places emphasis on predicting the economy and projecting a company's future earnings. Also, Neff liked to pick stocks where dividend yields were high, in the 4% to 5% range.
The Wharton School named a professorship in their business school after Neff, the John B. Neff Professor of Finance. Also, Neff published a well received book on his investment strategies in 2001:
The University of Toledo College of Business has named the Department of Finance in His honor. It is called the John B. and Lillian E. Neff Department of Finance.
- John Neff on Investing. by John Neff, S. L. Mintz. Published by John Wiley and Sons, 2001. ISBN 0471417920.