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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 1980's. 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 to be a tactical contrarian investor who placed emphasis on low-tech security analysis, that is digging into a company, 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. |
John Neff