CHAPTER 7

John Neff

John Neff, a value investor, has developed an investment philosophy which emphasises the importance of a low share price relative to earnings. But he has not stopped there; he requires the share to pass a number of tests in addition to the price-earnings criterion, and it is through his use of these further screening tools that he successfully evolved his approach from simple low price-earnings investing to a sophisticated one.

Neff employed his investment approach in managing the Windsor Fund for 31 years between 1964 and 1995. It returned $56 for each dollar invested in 1964, compared with $22 for the S&P 500. The total return for the Windsor Fund, at 5,546.5 per cent, outpaced the S&P 500 by more than two to one. Considering ...

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