John Neff–One of the Investment Greats–“Was Decent To The Core”

John Neff, (1931- 2019), is a son of Ohio who produced one of the best long-term records of any money manager ever. He loved finding stocks that were unpopular and had hidden potential, then bought them in bulk. Mr. Neff managed the Vanguard Windsor Fund for 31 years, from 1964 through his retirement in 1995, and in that period, the fund posted a cumulative total return of 5,546%, nearly 2-1/2 times the performance of the S&P 500.

Born just outside of Toledo in Waseon, Ohio, Neff went into the Navy after high school for two years and then got his degree from the University of Toledo in 1955. He worked at the National City Bank of Cleveland and then attended business school at Case Western Reserve University, receiving his graduate degree in 1958.

He became a security analyst at a bank for the next eight years before joining the Wellington Management Company, a sub-advisor to the Vanguard group of funds, and after three years he was appointed portfolio manager of the Windsor, Gemini, and Qualified Dividend Funds.

Mr. Neff holds a place as one of the world’s greatest value investors. He definitely had a low price to earnings (P/E) methodology, but was also a very hard-working, tactical sort, who dug into every day’s Wall Street Journal as well as piles of company brochures and reports to conduct “low-tech security analysis.” Bearing in mind his opinion on the overall economy, he’d look at the company’s books and management carefully to project its future earnings in the economic environment vis a vis the need for the products and services that company offered and management’s effectiveness. The yardsticks he was known for included emphasis on return on equity (ROE) and a good 40% to 50% discount to the market P/E.

He was married to wife Lillian for 63 years, and they resided in the Philadelphia suburbs. The University of Toledo College of Business named the John B. and Lillian E. Neff Department of Finance in honor of the two and houses the John B. and Lillian E. Neff Endowed Chair in Finance. There is a professorship named after him at the Wharton School of the University of Pennsylvania as well.

We believe this is an American success story about a man who owed his good fortune to hard work and smarts; biographical information and his book, John Neff On Investing, indicate that he lived a quiet family life far from the hot shot hedge fund managers of New York and Connecticut. Barron’s described Neff as “a loin-girder par excellence” and admired him as “decent to the core.”


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