Product Description

John Neff is a life–long contrarian, proving time–and–again over the past three decades that bucking the system can pay off big. During his illustrious career as a money manager, Neff flew in the face of conventional wisdom by consistently passing over the big growth stocks of the moment, in favor of inexpensive, under performing ones–and he usually won. During his thirty–one years as portfolio manager for Vanguard′s Windsor and Gemini II Funds, he beat the market twenty–two times, through every imaginable stock market climate, while posting a 57–fold increase in an initial stake. When Windsor closed its doors to new investors in 1986, it was the largest mutual fund in the United States.
Now retired from mutual fund management, Neff is finally ready to share the investment strategies that earned him international recognition as the "investor′s investor", and made him the one to whom other money managers come to manage their money. In John Neff on Investing, Neff delineates, for the first time, the principles of his phenomenally successful low p/e approach to investing, and he describes the strategies, techniques, and investment decisions that earned him a place alongside Warren Buffett and Peter Lynch in the pantheon of modern investment wizards.
Packed with solid advice and guidance for anyone who aspires to using Neff′s unique brand of value investing, John Neff on Investing offers invaluable lessons on using price–earnings ratios as a yardstick, to zeroing in on undervalued stocks, interpreting earnings histories and anticipating new market climates. A narrative of Neff′s early days–My Road to Windsor–reveals the extraordinary mindset and humble circumstances that shaped his winning investment philosophy. By reproducing excerpts from his personal investment diaries, this book offers a unique opportunity to watch Neff in action over the years. A faithful, quarter–in–quarter–out chronicle of a life on Wall Street, the diaries provide unprecedented insights into the thinking behind some of his best (and worst) investment decisions, while tracing the evolution of his innovative investment style.
The first book to fully reveal the long–heralded investment strategies of a Wall Street genius, John Neff on Investing is must reading for investors, brokers, traders, and bankers of every kind.
JOHN NEFF, until his retirement in 1995, was Senior Vice President and Managing Partner of the Wellington Management Company, the Windsor Fund′s investment advisor.
S.L. MINTZ, is New York Bureau Chief of CFO Magazine, a publication of the Economist Group dedicated to the latest financial thinking and how it is being implemented in today′s markets. His other books include Beyond Wall Street (Wiley, 1998) and Five Eminent Contrarians.

Product Details

• Amazon Sales Rank: #673672 in Books
• Published on: 2001-04-24
• Original language: English
• Number of items: 1
• Binding: Paperback
• 288 pages

Amazon.co.uk Review
John Neff is one of America's superstar mutual fund investors. Over 30 years, his fund has consistently outperformed the market by a wide margin. This may seem like no mean feat, but in stock markets where even the good eventually succumb to the average, this is truly Herculean. And here he tells his story.

Broadly speaking, growth investors seek those companies with fast growing earnings; value investors, of which Neff is one, seek those companies that other investors have discarded into the waste heap. Neff teaches how to sift through the rubble to uncover those valuable gems and nuggets that others ignore. He says, "if you do the work and answer the right questions, you can dine out on the down-and-out".

The book divides roughly into three: the first third is his Horatio Alger, rags-to-riches story: how all the New York investment banks turned up their noses at this mid-western lad; but he had the last laugh. The second section is where the meat is. Neff outlines techniques which value investors can employ to pick shares. He preaches a key indicator for readers to use to determine whether the company's growth prospects and low price warrants an investment. Neff provides numerous examples. The third section is a year-by-year description of his investment decisions, where he offers insights about the rational behind the decisions.

Over the last decade, value investing has fallen by the wayside, in favour of growth investing with a technological bent. Many investment managers have changed their style to meet the demands of retail and institutional investors. Neff believes this is a mistake. He says those that follow stock to towering heights do so at their own peril: "The capacity of investors to believe in something too good to be true seems almost infinite at times", especially at a market peak.

Neff, speaking from a vantage of a lifetime in the market, argues that staying the value course always wins out. This is a great handbook for those new to the game as well as the most seasoned portfolio managers. --Bruce McWilliams

Financial Times, 6th November 1999
- "What makes Neff worth listening to is his investment record....That is a truly astonishing record which ranks him with the Buffetts, Lynches and Soroses of the world."

Sunday Business Post, Ireland, 19th December 1999
- "Definitely worth a read if you are a market enthusiast and are looking for a grounding in basic stock market investment principles."

Customer Reviews

Well written "big picture" of low p/e investing
A very enjoyable read written in a non conventional style. Neff starts the book with a brief praecy of his life as a way to highlight his non traditional, or contrarian approach to investing. The second part of the book is where the "real meat" is contained. Neff writes about the indicators that he used to identify companies with investment potential, or in todays terminology the "stock screening process" that he went through. Once he has identified stocks worthy of further investigation then he progresses to a deep "fundamental" analysis of the stock. the only reason that I did not award this book 5 stars is that he says very little about what fundamental analysis means to him. I guess I shall be buying Security Analysis by Benjamin Graham :-)

John Neff gives back
Many of the investing legends, such as Warren Buffett, have someone that influenced their investment philosophy. For John Neff it was Sidney Robbins, a follower of Benjamin Graham and David Dodd. This book is about investing, but also about John Neff's personal life story. By reading about Neff's life experiences and his personality, readers can understand why value investing is such a good fit for him.

In Chapter 7, the author explains his investment style that his firm used whether the market was up, down, or indifferent. His investment criteria boils down to:

* Low price-earnings (p/e) ratio
* Fundamental growth in excess of 7 percent
* Yield protection (and enhancement, in most cases)
* Superior relationship of total return to p/e paid
* No cyclical exposure without compensating p/e multiple
* Solid companies in growing fields
* Strong fundamental case

I highly recommend this book to any investor. Next time you think about broad diversification, just remember this quote by John Neff,

"You can diversify yourself into mediocrity."

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market