📖John Neff
Business Moat Assessment
Identify sustainable competitive moats before investing.
Before investing, identify the moat — the sustainable competitive advantage that protects the business from competitors. No moat means no long-term edge.
🏠 Everyday Analogy
📖 Core Interpretation
John Neff emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Moats protect earnings from competitive erosion.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
Ford Motor in a Recession (1974)
During the 1973–74 bear market, Ford’s stock collapsed amid recession fears and auto industry weakness.
✨ Outcome：Neff bought at low P/E with strong dividend; total return surged as profits and sentiment normalized.
2
Chrysler Turnaround Bet (1982)
Early 1980s recession and near-bankruptcy crushed Chrysler’s shares despite government support and restructuring.
✨ Outcome：Neff invested at distressed prices; as turnaround took hold, stock multiplied, delivering high total return from price gains and recovery optimism.
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