📖John Neff
Review Your Investment Thesis
Regularly challenge your original investment thesis.
Regularly review whether your original reasons for owning a stock still hold. If the facts change, change your mind. Holding a broken thesis is the costliest mistake.
🏠 Everyday Analogy
📖 Core Interpretation
John Neff frames investing as a compounding game. Time amplifies quality and discipline, while unnecessary activity often destroys long-horizon returns.
💎 Key Insight：Adapting to new facts prevents holding broken investments.
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❓ Why It Matters
Short-term noise often forces investors out before value is realized. Long-term discipline increases the odds that fundamentals, not emotions, drive outcomes.
🎯 How to Practice
Extend research and review horizon, reduce unnecessary turnover, and adjust only when intrinsic value, risk, or opportunity cost materially changes.
⚠️ Common Pitfalls
Calling it long term while never reviewing thesis
Overtrading and damaging compounding
Ignoring opportunity cost and alternatives
📚 Case Studies
1
Ford Motor Rebound (1981)
During recession and auto slump, Neff accumulated Ford at high yield and depressed valuation while sentiment was extremely negative.
✨ Outcome：As industry recovered and earnings normalized, stock rerated and dividends plus price gains generated outsized returns.
2
Ford Motor Post-Oil Shock (1974)
After the 1973–74 oil crisis, auto stocks plunged. Neff bought Ford at low P/E with solid dividend and restructuring underway.
✨ Outcome：Ford rebounded strongly as U.S. economy stabilized, delivering market‑beating returns while its valuation normalized.
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