Top 17 John Neff Quotes: Wisdom from a Wall Street Legend

Imagine taking your money and multiplying it by over 180 times. Impossible? Not at all! The secret lies in the sage-like wisdom of John Neff, a hedge fund legend who turned $75 million into $13.6 billion.

In this riveting read, we’ll unravel Neff’s profound words of wisdom, shedding light on the tactics that propelled him to dizzying heights of success. Whether you’re a battle-hardened investor or a novice just getting started, you can learn a lot from Neff’s value investing, contrarian approach.

So, strap in to gain invaluable insights from a master of the game! Each quote is a golden nugget, paving your path to financial abundance.

1. “A lot of people can’t bear to sell when a stock’s price is going up. They’re convinced that they’ve made a mistake if they don’t hold out for the last dollar.”

When your stock’s price is soaring sky-high, you might think, “I’m not selling this golden goose anytime soon!” But investing maestro John Neff cautions against such a mindset. While he’s a firm believer in playing the long game, he’s equally passionate about recognizing the perfect moment to bow out.

The stock market, with its notorious unpredictability, can flip the script in a heartbeat. Typically, when your stock starts turning heads, that’s your cue to sell before the storm hits. So, take a hint from John Neff and try out contrarian investing: by mastering the art of timing your exit, you’ll avoid losses from inevitable price plunges.

2. “Inflection points occur in the market, and around them performance can suffer, but you have to stick to your guns.”

The stock market is a fickle creature,  unpredictable and ever-evolving. Yet, as John Neff assures us, one truth remains constant: a stock with solid fundamentals inevitably grows over time.

So, when the market plunges and your stocks nosedive, don’t panic! Adopting a long-term perspective and holding firm is the key. Stocks with real growth potential always deliver rewards in the end.

But don’t just take our word for it! Neff himself held onto stocks for an average of three years, proving that even top-tier investments need time to flourish.

3. “It’s not always easy to do what’s not popular, but that’s where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized.”

Straight from his book “John Neff on Investing,” this quote perfectly sums up Neff’s contrarian investing style, which is a masterclass in spotting overlooked opportunities. While others dismiss a stock as worthless, you can unearth hidden treasures using Neff’s discerning investment criteria.

So, what’s the secret sauce? Neff’s winning formula involves keeping an eye out for stocks with:

  • Solid fundamentals
  • Attractive price-to-earnings (P/E) ratios
  • A robust competitive advantage
  • Consistent earnings growth
  • Generous dividend payouts
  • Healthy equity

This brilliant strategy catapulted the Vanguard Windsor Fund from $75 million to a jaw-dropping $13.6 billion.

Of course, this is just the tip of the iceberg when it comes to Neff’s investment technique. For a deep-dive into his approach, you absolutely must check out our article “Invest Like John Neff: Secrets to Generational Wealth.”

4. “Successful stocks don’t tell you when to sell. When you feel like bragging, it’s probably time to sell.”

Sure, snagging an undervalued stock at a bargain price feels like striking gold. But the real game-changer, according to John Neff, is knowing when to let go. And surprisingly, the perfect time to wave goodbye is when your stock is at its peak performance.

Sounds like a twist, doesn’t it? Why bid adieu to a stock that’s on a winning streak? Neff enlightens us with a simple truth—it’s when a stock is soaring that it’s poised for a downward spiral.

Unfortunately, stocks don’t come with an alarm bell to signal their impending plunge. It’s up to you to stay vigilant, keep your finger on the pulse, and spot the tell-tale signs of an imminent price shift.

5. “I’ve never bought a stock unless, in my view, it was on sale.”

John Neff, much like Warren Buffett, had a keen eye for a stock market bargain. In fact, he lived by Buffett’s mantra: “Price is what you pay, value is what you get.” This belief led Neff to only invest in stocks offering real bang for the buck.

Take his investment in Ford during the late 1970s, for instance. The stock was a steal, and the company was generously rewarding its investors with dividends. Ford ticked all the boxes on Neff’s investment checklist, making it an irresistible opportunity.

And the results? The stock’s value has soared since then, earning Neff (and the Vanguard Windsor Fund) a handsome payout!

Now, check out our very own investment checklist,  your ultimate guide to navigating today’s financial markets!

6. “It’s not always easy to do what’s not popular, but that’s where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized.”

This quote underscores John Neff’s unconventional, value investing approach. He dares to venture where most investors shy away, unearthing hidden gems. Naturally, this calls for a bold spirit, an appetite for bucking the trend, and a knack for spotting stocks ripe for growth.

So, the next time you receive a sizzling stock tip, hit pause! As per Neff, it’s those overlooked opportunities, hiding in plain sight, that could potentially bring home the bacon. And with his ingenious investment checklist, you’ll be able to spot these stocks with no problem!

7. “Investment success does not require glamour stocks or bull markets.”

Many investors ride the wave of hot stocks and bullish markets, banking on a flourishing economy. Yet, John Neff had a different vision.

He believed that you don’t need such favorable conditions to amass a fortune through investing. His unique value investing strategy, combined with a contrarian approach, flourished even when stock prices were at rock bottom.

So, if you’re staring at a bear market where every stock is plummeting, don’t lose heart! This could, in fact, be your golden chance to seize undervalued stocks and rake in a hefty profit.

8. “Buy on the cannons and sell on the trumpets.”

In the unpredictable world of stocks, you might find yourself on a sinking ship, watching others jump off as the value plummets. It’s easy to follow the crowd.

But remember the wise words of John Neff: this could be your golden opportunity! If the fundamentals of a company remain strong, hold tight, or even consider buying more shares at a bargain price.

On the flip side, when a stock is skyrocketing and the masses are chanting “Buy! Buy! Buy!”, it’s wise to step back. Why? Because the stock is likely becoming overpriced. You wouldn’t want to pay a premium for something that’s not worth it, would you?

So, let’s take a leaf out of Neff’s book: buy when prices are low, sell when high, and always be on the lookout for those hidden gems in the market!

9. “I don’t read, much less follow, the valuations or predictions. I study the numbers.”

Wall Street wizards often can’t resist the urge to broadcast their latest stock discoveries. And, indeed, the internet is teeming with sites eager to reveal the freshest, most exciting stocks. It’s easy to get swept up in the buzz, but John Neff, the contrarian investor, would’ve cautioned against this.

Why, you ask? It’s simple. Neff didn’t buy into the idea of following the herd. He was a numbers guy. He’d ask himself, “What are this company’s earnings? Is there potential for growth? Do they shower their shareholders with dividends?”

By finding answers to these questions, you empower yourself to make savvier investment decisions. And if you’re still unsure about which stock sectors to put your hard-earned money into, dive into our guide to the 11 stock sectors of the stock market. 

It’s jam-packed with all the juicy details you need to make an informed decision.

10. “An awful lot of people keep a stock too long because it gives them warm fuzzies – particularly when a contrarian stance has been vindicated. If they sell it, they lose bragging rights.”

John Neff, a mastermind in contrarian investing, once hinted that even the best strategies have their pitfalls. Say, for instance, a stock you’ve picked is soaring just as you predicted. It’s tempting to hold on tight or buy more shares, right? You’ve discovered this diamond in the rough before anyone else, and you’re itching to bask in the glory.

But here’s where Neff throws a cautionary red flag. He warns that such pride can blind you, making you cling to favored stocks longer than you should. And if you miss that perfect exit point? Well, your profits might not be as stellar as you’d hoped.

So yes, revel in the thrill of being a contrarian, of unearthing hidden treasures overlooked by others. But remember: don’t let your ego rob you of potential earnings. Keep your eyes on the prize and always be ready to let go at the right time.

11. “Play to your strengths. Know your good plays and your not-so-great ones. I, for instance, don’t own many technology stocks because of my limited technology knowledge.”

John Neff, who maintained a diversified investment portfolio, was always careful to put his money in areas he understood. Charlie Munger, another investing legend, followed the same principle. He and Buffett coined this approach as staying within your “circle of competence”.

So, if you’re scratching your head over the tech industry like Neff, I’d advise against pouring your money into Apple! Instead, put your hard-earned cash into industries you’re familiar with. This way, when you’re sifting through those daunting spreadsheets, the numbers won’t seem like hieroglyphics. You’ll be able to spot the winners with ease.

12. “Rising prices beget attention, and vice versa – but only to a point. Eventually their growth rate can diminish as results revert towards normal. Maybe not in all cases, but often enough to make a long-term bet.”

When a stock is hot, it’s natural for investors to get starry-eyed and say, “I want a piece of that action!” This fervor can push the share price into the stratosphere, inflating its value beyond reason.

But remember, the market is like a self-righting ship; it will always find its equilibrium. This means that those ballooning stock prices will inevitably deflate.

This is precisely why investing guru John Neff cautioned against succumbing to the siren song of the latest fad. Instead of chasing the next big thing, hunt for those unseen gems – the undervalued stocks lurking in the shadows. Doing so could be your ticket to striking substantial returns.

13. “Bottom line: I wouldn’t want to get caught in a rush for the exit, much less get left behind. Only when big growth stocks fall into the dumper from time to time am I inclined to pick them up – and even then, only in moderation.”

By the time a stock’s price is sinking and investors are scrambling to offload, you’ve already missed your exit cue. Neff explains that you should have gracefully bowed out before the market caught wind.

Of course, this strategy often means saying goodbye to a stock before it’s reached its peak. While Neff concedes that this can sting, it’s a smart move in the long haul.

Why? Because if you wait for a stock’s price to dip, you risk shaving off potential profits!

14. “Everything we own was bought to be sold. If our predictions come to pass, and the market embraces a stock and it goes up, we start selling. That’s simplistic but essentially the way I operate.”

John Neff swore by the mantra of long-term stock holding, but not indefinitely. He nudges budding investors with a nugget of wisdom: every stock you snap up should be offloaded at the perfect moment. And how do you pinpoint this golden moment? By being an astute observer of the market’s pulse.

Picture this: a promising stock takes a price plunge. That’s your cue to buy. Now, imagine the same stock climbing the price ladder at a rapid pace. That’s your signal to sell.

This strategy, though seemingly simple, is the secret behind Neff’s feat of outperforming the S&P 500 by an average annual 3.1% margin.

15. “If you get a significant price move, you begin selling early and look for something else.”

Imagine one of your stocks just catapulted in value, soaring way beyond the price you initially paid for it. What’s the savvy move according to investing guru John Neff?

Cash in and sell! This allows you to pocket a tidy profit before the market begins its dance and nudges the price back down. And the next step on this thrilling financial journey? Hunt for the market’s next hidden gem that’s yet to be properly valued.

By doing so, you can cultivate a diverse portfolio brimming with stocks primed for growth. That’s the very strategy Neff used to juggle risk and amass a fortune.

He typically held between 70-80 stocks at any one time, pouring his money into undervalued powerhouses like American Express and General Electric.

16. “But if you can’t roll with the hits, or you’re in too big a hurry, you might as well keep your money in a mattress.”

John Neff sagely points out that losses are an inevitable part of the investment game. Not every stock you pick will hit the jackpot, and that’s perfectly fine! The key is to take those market dips on the chin and rebound with gusto.

If you can’t, you’re better off letting your money gather dust in a savings account. But you’re not here for that, are you? So, keep your cool, stay the course, and keep your eyes on the ultimate prize: an early retirement and a legacy of wealth.

17. “Shortcuts usually grease the rails to disappointing outcomes.”

John Neff, the investing wizard, has a golden nugget of wisdom for us: there’s no express lane to investment success. Looking for a quick win? You’ll likely miss the mark on significant profits.

So, what’s the insider scoop for investors like you? Embrace the power of patience in your investment journey. Selling stocks too soon may rob them of the time they need to bloom into full-fledged profit powerhouses.

Instead, strap in for the long haul and let your investments work their magic. Remember, fortune favors the patient investor.

Conclusion: Learning from John Neff Quotes

In the dynamic realm of investing, John Neff’s insights shine brighter than a lighthouse. His unique contrarian value investing strategy, beautifully captured in his quotes, can pave your way to financial independence.

Neff’s mantra – spotting undervalued stocks, nurturing them over time, and selling when the time is ripe – is a powerful ode to the virtues of patience and keen analysis.

As you sail through the often stormy waters of the stock market, let Neff’s insights be your guiding star. Captivated by his success story? Dive into John Neff’s biography to uncover the secrets of his extraordinary journey and emulate his triumphant success.

Leave a Comment