John Neff
Market Wizards Index: +14.3%
Compound annual over 24 years
Fund or affiliation
- Windsor Fund, Wellington Management
Methodology
- Value investing with a stress on dividend income.
Research Techniques Employed
- Neff has access to the analysts in his parent company, Wellington Management.
- Although Neff doesn’t ordinarily visit companies, he talks to them at length.
Trading/ Valuation Techniques Employed
- Only buys when a stock is too cheap and acting badly at that moment in the market. Infallibly sells when it is too expensive and acting strongly in the market.
- Tolerates portfolio concentration in industry groups.
- Average holding is 1/3 lower than market P/E, and with dividend yield 2% higher.
- ( Growth Rate + Dividend Yield ) / PER = "What you get for what you pay"
Philosophy and beliefs
- Insistence on income: people overpay for growth.
- Growth stocks suffer from high mortality.
- Often can get better total return from slower growth companies paying high dividend.
History and other facts
- Choice of money managers themselves to manage their own money.
- Windsor (in 1988) has become one of the largest equity and income fund in USA.
- In 1980, U. Penn asked Neff to manage its endowment.
- Issues "Report Card" on his transactions.
- Part of the pay package of Neff and his team is an incentive fee.
Examples
- Went 25% of assets into oil stocks after collapse of OPEC in 1986.
- Bought Ford heavily in early 1984 at under $14, 3 years later Ford reached $50.
Performance Record
- 14.3% over 24 years: "Neff has run the Windsor Fund for 24 years. Through 1988 it had a compound annual return of 14.3% versus S&P’s 9.4% over the same period".
All International Welcome Messages: 1, 2, 3, 4, 5, 6, 7 & 8
