THE INVESTMENT APPROACH OF CALVIN TAN
THE GREATEST INVESTOR: No 12 - JOHN NEFF - Strange Ways of Stock Pickings (Calvin comments)
calvintaneng
Publish date: Sun, 11 Dec 2016, 01:43 AM
calvintaneng
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Hi Guys,
I have An Investment Approach I which I would like to all.
I have An Investment Approach I which I would like to all.
The Greatest Investors: John Neff
- The Greatest Investors: John Neff
- The Greatest Investors: William J. O'Neil
- The Greatest Investors: Julian Robertson
- The Greatest Investors: Thomas Rowe Price, Jr.
- The Greatest Investors: James D. Slater
-
Read more: The Greatest Investors: John Neff | Investopedia http://www.investopedia.com/university/greatest/johnneff.asp#ixzz4SSSPpxhy
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John Neff\'s average annual total return from Vanguard\'s Windsor Fund during his 31-year tenure (1964-1995) as portfolio manager was 13.7%, against a similar return from the S&P 500 Index of 10.6%. He showed a great consistency in topping the market\'s return by beating the broad market index 22 times during his tenure and was regularly in the top percent of money managers.
He was considered the "professional\'s professional," because many fund managers entrusted their money to him with the belief that it would be in safe hands.
Read more: The Greatest Investors: John Neff | Investopedia ,was published in 2001.
Read more: The Greatest Investors: John Neff | Investopedia http://www.investopedia.com/university/greatest/johnneff.asp#ixzz4SSTGaWwk
Follow us: Investopedia on Facebook
The Greatest Investors: John Neff
,was published in 2001.
Investment Style
John Neff did not describe himself as either a value or contrarian investor, preferring instead to characterize his investing approach to one of buying "good companies, in good industries, at low price-to-earnings prices." Despite his value-contrarian investor disclaimer, Neff's investment management career shows a considerable amount of this type of investing strategy.
Neff practiced portfolio concentration over diversification. He pursued stocks of all sizes – large, small, and medium – as long as they evidenced low P/E ratios, which he described as "low P/E investing." Two of Neff's favorite investing tactics were to buy on bad news after a stock had taken a substantial plunge and to take "indirect paths" to buying in to popular industries. This involved, for example, buying manufacturers of drilling pipe that sold to the "hot stock" (too pricey for Neff) oil service companies.
He preached against participating in "adrenaline markets" (momentum driven) and preferred face-to-face meetings with a company's management to assess its integrity and effectiveness. For most individual investors, this type of contact is not a realistic possibility; however, using Neff's rigorous fundamental analysis techniques as applied to a company's financials will turn up enough management performance indicators to compensate for the inability to directly interact with a company's managers. (For more insight, see Evaluating A Company's Management and Putting Management Under The Microscope.)
As noted by Ryan Furman in his July 2006 interview with Neff for the Motley Fool, "most great investors are serious bookworms." John Neff is no exception: "He gained notoriety for taking all of his weekly Wall Street Journal copieshome for a second read during the weekend." Furman also reported that Neff reads Value Line religiously. Stock investors would be well advised, like Neff, to give these two sources of investing guidance as much attention as possible.
Publications
Quotes
"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."
"I've never bought a stock unless, in my view, it was on sale."
"Successful stocks don't tell you when to sell. When you feel like bragging, it's probably time to sell."
The Greatest Investors: William J. O'Neil
Investment Style
John Neff did not describe himself as either a value or contrarian investor, preferring instead to characterize his investing approach to one of buying "good companies, in good industries, at low price-to-earnings prices." Despite his value-contrarian investor disclaimer, Neff's investment management career shows a considerable amount of this type of investing strategy.
Neff practiced portfolio concentration over diversification. He pursued stocks of all sizes – large, small, and medium – as long as they evidenced low P/E ratios, which he described as "low P/E investing." Two of Neff's favorite investing tactics were to buy on bad news after a stock had taken a substantial plunge and to take "indirect paths" to buying in to popular industries. This involved, for example, buying manufacturers of drilling pipe that sold to the "hot stock" (too pricey for Neff) oil service companies.
He preached against participating in "adrenaline markets" (momentum driven) and preferred face-to-face meetings with a company's management to assess its integrity and effectiveness. For most individual investors, this type of contact is not a realistic possibility; however, using Neff's rigorous fundamental analysis techniques as applied to a company's financials will turn up enough management performance indicators to compensate for the inability to directly interact with a company's managers. (For more insight, see Evaluating A Company's Management and Putting Management Under The Microscope.)
As noted by Ryan Furman in his July 2006 interview with Neff for the Motley Fool, "most great investors are serious bookworms." John Neff is no exception: "He gained notoriety for taking all of his weekly Wall Street Journal copieshome for a second read during the weekend." Furman also reported that Neff reads Value Line religiously. Stock investors would be well advised, like Neff, to give these two sources of investing guidance as much attention as possible.
Publications
- "John Neff On Investing" by John Neff and Steven L. Mintz (2001)
Quotes
"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."
"I've never bought a stock unless, in my view, it was on sale."
"Successful stocks don't tell you when to sell. When you feel like bragging, it's probably time to sell."
The Greatest Investors: William J. O'Neil
Calvin comments:
In the excellent book called JOHN NEFF On Investing
It states that John Neff looks for out of favor & undervalued stocks over a period of 30 years. Instead of looking at the Top hot stocks or the Top gainers John Neff looked for the Top Losers to search for fallen bargains!
This relentless search for overlooked, oversold undervalue stocks & hold them firmly till value emerge is the same methodology practised by Walter Schloss. This value approach was taught by his professor called Sidney Robbins - a student of Benjamin Graham.
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Discussions
2 people like this. Showing 28 of 28 comments
6. "If you can find a dull business that makes money, it is less likely to attract competition."
7. "Windsor never fancy, fad-driven, or resigned to market performance. We followed one durable investment style whether the market was up, down, or indifferent. These were its principal elements:
* Low price-earnings (p/e) ratio.
* Fundamental growth in excess of 7 percent.
* Yield protection (and enhancement, in most cases).
* Superior relationship of total return to p/e paid.
* No cyclical exposure without compensating p/e multiple.
* Solid companies in growing fields.
* Strong fundamental case.
8. Woebegone regions have always lured me, for one very compelling reason: Swept up by flavors of the moment, prevailing wisdom frequently undervalues good companies.
Many-- but not all---that languish out of favor deserve better treatment. Despite their solid earnings, they are rejected and ignored by investors caught in the clutch of groupthink.
9. Brand-name growth stocks ordinarily command the highest p/e ratios. 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. Bottom line: I would'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 as I inclined to pick them up --- and even then, only in moderation.
10. Rather than load up on hot stocks along with the crowd, we took the opposite approach. Windsor didn't engage in the market's clamor for fashionable stocks; we exploited it. Our strength always depended on coaxing overlooked, out-of-favor stocks to move up from undervalued to fairly valued. We aimed for easier and less risky appreciation, and left "greater fool" investing to others.
This strategy gave Windsor's performance a twofold edge
(1) excellent upside participation and
(2) good protection on the downside.
If you buy stocks when they are out of favor and unloved, and sell them into strength when other investors recognize their merit, you'll often go home with handsome gains."
2016-12-11 13:22
Calvin
In my Dynamic investing articles, I mentioned that this approach may be suitable for certain fund managers but not for retail investors.
Because, institutions typically holds hundreds of different stocks and if some perform during the year, he is happy.
A retailer got only a handful, chances of hitting jackpots this way during a year, not high enough......it's a numbers game.
2016-12-11 16:03
Stockmanmy,
Peter Lynch Magellen Fund bought, sold and rotate into over 2,000 stocks.
John Neff bought about 60 to 70 stocks.
As retailers maybe we should just diversify into 30 stocks will do.
2016-12-11 17:29
Invest1188,
Yes, I like all oil palm plantation stocks as a whole. But my no. 1 pick is Cbip because it is the thermometer for Cpo.
The new modipalm which will be launched soon in year 2017 is fully automatic. And with more contribution from 2 directions:
1. Outstanding payments from past purchasers being met due to increasing harvest will increase cash coffers.
2. More sales of new modipalm mills going forward due to abundant harvests.
2016-12-11 17:33
Calvin, I have a biggest problem now in oil palm . It is a disease called ganoderma, a kind of mushroom that attract oil palm tree. It is so common now in every plantation. Help me to search n find a solution. I already search everywhere including mpob researchers. Goggle no solution but telling story.
2016-12-11 17:53
Posted by Lk036 > Dec 11, 2016 05:53 PM | Report Abuse
Calvin, I have a biggest problem now in oil palm . It is a disease called ganoderma, a kind of mushroom that attract oil palm tree. It is so common now in every plantation. Help me to search n find a solution. I already search everywhere including mpob researchers. Goggle no solution but telling story.
Lk036,
I have checked up on ganoderma
Yes, there is no human cure for it.
What can be done:
1) Since it occurs in older mature trees maybe it's time for replanting?
2) Try to separate other trees not infected from the ones with ganoderma.
A 3rd way to resolve it is by divine intervention. God can heal by prayer (See http://biblehub.com/malachi/3-11.htm)
2016-12-11 19:26
Calvin, nowadays not only happen on old tree. 10 yrs tree already start hv tis problem. Worse still if the land hv been plant oil palm before. I guess soon Indonesia will hv tis problem seriously that will affected yield. By then, oil palm should shooting up n maintain at high price.
2016-12-11 20:13
Paul 247,don't you think it is dangerous to provide you with so much information?If it is genuine give your address and contact no instead.
2016-12-12 06:51
calvin
30 stocks, a retailer will be good if he can make 10% return a year.
If he wants to be rich, wants the stockmarket to make a difference, be like a KYY, he cannot start with 30 stocks.....He has to focus on 5 to 10 stocks.
2016-12-12 09:40
stockmanmy calvin
30 stocks, a retailer will be good if he can make 10% return a year.
If he wants to be rich, wants the stockmarket to make a difference, be like a KYY, he cannot start with 30 stocks.....He has to focus on 5 to 10 stocks.
12/12/2016 09:40
I think KYY started with these first 3 stocks in i3 forum if I am not mistaken:
JTiasa, Mudajaya & Xinquan
From these 3 the losses will be 70%, 80% & 90%. So just at the very start so much capital is wiped off. How to recover back & think of making a killing in stock?
If a share drops by half 50% of Capital is gone! While it takes 100% gain to get even
Example
Rm1.00 share
If it drops by 50%
So Rm1.00 - 50 cts = 50 cts (Loss 50%)
But to get back to original price of Rm1.00 from 50 cts
So 50 cts + 50 cts = Rm1.00 (Increase of 100%)
So Rm1.00 going down to 50 cts is a loss of 50%
And 50 cts going back up to Rm1.00 is a 100% gain.
From here the need to protect capital is FIRST! Earnings will be secondary!
Not all who followed KYY succeeded. Those who chased JTiasa, Xinquan, Mudajaya, Gadang at top prices might even go bankrupt by now!!
2016-12-12 10:27
want protection and so scared, buy unit trusts la....Their performance in Malaysia not bad.
I want to address to those who want to make a difference via the stock market.
5 to 10 stocks at the most,,, use margin accounts once profits start to come in.
be an entrepreneur. Nobody says all entrepreneurs succeed, but there must be some budding entrepreneurs out there.
2016-12-12 10:35
10. Rather than load up on hot stocks along with the crowd, we took the opposite approach. Windsor didn't engage in the market's clamor for fashionable stocks; we exploited it. Our strength always depended on coaxing overlooked, out-of-favor stocks to move up from undervalued to fairly valued. We aimed for easier and less risky appreciation, and left "greater fool" investing to others.
This strategy gave Windsor's performance a twofold edge
(1) excellent upside participation and
(2) good protection on the downside.
If you buy stocks when they are out of favor and unloved, and sell them into strength when other investors recognize their merit, you'll often go home with handsome gains."
11/12/2016 13:22
CALVIN COMMENTS ON GREAT SIFU JOHN NEFF OF VANGUARD WINDSOR (WELLINGTON) FUND
Always buy stocks with
MARGIN OF SAFETY FOR CAPITAL PROTECTION ON THE DOWNSIDE FIRST!!
THEN WAIT FOR MR. MARKET TO DISCOVER HIDDEN VALUE & CHASE UP THE STOCK LATER!!
THIS IS THE METHOD OF DR< NEOH SOON KEAN OF DYNAQUEST (THE GRAND MASTER CHAMPION & CHAMPION BEN GRAHAM OF MALAYSIA!!)
2016-12-12 10:39
its a complete guide to entrepreneur investing .
I call it Dynamic Investing.
http://klse.i3investor.com/blogs/stockman/110801.jsp
2016-12-12 10:52
Calvin, I suspect if you have read Peter Lynch's book, he recommended a retailer is good to have a portfolio with 5 stocks, that's enough already.
2016-12-12 12:07
keep it up, calvin...value investing is the right way to make profits.....
2016-12-12 12:59
that is what I like
congratulations for a potential KYY in the making.
=====================
IamGoogle > Dec 12, 2016 12:07 PM | Report Abuse
Calvin, I suspect if you have read Peter Lynch's book, he recommended a retailer is good to have a portfolio with 5 stocks, that's enough already.
2016-12-12 13:37
Calvin, sell your holland stock bjcorp, mui, mui ind, bpuri, drb, mulpha, alam, perisai etc and BUY
Hibiscus!!
John Lu
481 posts
Posted by John Lu > Dec 12, 2016 10:50 PM | Report Abuse X
10 reason buy Hibiscus
1) Opec and non Opec agreed to cut oil production (6 mths)
2) After 6 month, I believe they will cut more
3) Hisbiscus 3000 bpd now
4) Target 10000 bpd
5) Hibiscus cost at below 19
6) Management target to reduce the cost to below 15 pb
7) Oil price now 54 pb
8) Company continue 2Q profit
9) Free debt company
10) Last tranches pp at 29c
BUY!
2016-12-12 23:26
calvin
go ask raider whether it is better to buy Choo Bee for its $ 4.00 NTA or CSC for its game changing event.....
I think I have convinced raider, CSC is the better deal, not sure though.
2016-12-12 23:46
Hi guys,
Buy what you know best yourselves. As for Great Raider he is already a millionaire with 8 digit figures I think. So he should know what is best for himself.
As for Calvin I have chosen DRBHicom
1) Year 2017 is Internet ECommerce Digital Year proclaimed by Pm Najib
2) March 2017 is JackMa launching E Free Trade Zone & JV with POS/DRB
3) GE14 is now on! And DRB is a GLC Linked Stock!
DRB is a stock whose time has come!
2016-12-13 01:38
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
calvintaneng
Extracts from the book
JOHN NEFF on investing:
1."As a general tactic we bought into weakness and sold into strength."
2. "In disrepute, we grabbed them. In favor, we sold them."
3. "Dwelling successfully in woebegone regions of the markets is a different story. Until results surface, few investors can muster the courage to buy down-and out stocks that evoke blank stares more often than envy. Once results become visible, of course, the opportunities usually have passed."
4. "Keep tabs on stock prices posting new lows... the stock of 185 New York Stock Exchange companies sank to their lowest points in 52 weeks. On NASDAQ, 148 stocks etched new lows
Low stock prices should never trigger automatic buy signals. For some of these companies, more dismal days lie ahead. Buy, in the course of my career, few days have passed when the new low list has not included one or two solid companies worth investigating. The goal is to find earnings growth capable of capturing the market's attention once the climate shifts."
5. Windsor (Fund managed by John Neff) gained an edge in cyclical stocks by staking out positions when big Wall Street firms were advising their clients to wait and see."
To be continued.....
2016-12-11 09:42