John Neff is most well known for his affiliations with National City Bank of Cleveland and Wellington Management Company. Other traders in the industry look at him as the ‘professional’s professional’ because of his knack in taking their money and investing it safely. In today’s unsure trading world, it is easy to see how Neff could be looked upon by his peers in such good light.
Born in Wauseon, Ohio in 1931, Neff did not start out as an investment trader. He graduated from the University of Toledo in 1955 with a Bachelor of Arts degree, suma cum laude at that. He didn’t go on to receive his MBA until 1958 and during his education he was employed as a securities analyst with National City Bank. He remained with the well-known banking firm for eight years before moving on to Wellington Management Company.
When Neff joined Wellington in 1964 he worked as the portfolio manager for numerous corporations and companies that were investing in the Windsor, Gemini and Qualified Dividend funds. It was during his thirty year career with Wellington that he did his most profitable trading and investing, many times beating the market with his carefully planned style. A self professed bookworm, Neff was known to read and reread his ‘Wall Street Journal’ and ‘Value Line’ on a regular basis, gaining insight into his profession and using these publications to guide his investments. In 1995, Neff retired from Wellington.
John Neff found his notoriety in trading through his careful investing career with Wellington. As the manger of the Windsor funds, he had an average annual total return of 13.7% for Vanguard’s fund alone during the 31 years he worked for the company. He was a consistent trader that was in the top percent of investors and money managers during his career. He topped the market’s return 22 times by overcoming the market index.
Neff was the type of man who preferred to educate himself about the current market conditions and believed in investing in ‘good companies, in good industries, at low price to earnings prices’. He believed that diversification in a portfolio was the best way to make money and he had no problem buying into stocks that ranged from the smallest to the largest as long as the P/E ratios were low. He also had no problems in buying up stocks that took a major hit and plunged on the market.
He also stayed away from purchasing stocks that were being driven by the moment as he felt they were not safe. Neff enjoyed meeting face to face with the management group of the companies he dealt with and if he couldn’t he would analyze the company’s financials for performance indicators to get a feel of who he was dealing with. A good example of his investing and trading style comes in the following quote from Neff himself: “I’ve never bought a stock unless, in my view, it was on sale.”
John Neff was the author of John Neff on Investing which was published in 2001 with Steven L Mintz.
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