#1
Management Evaluation
"Evaluate management by their actions, not their words. Look for a track record of capital allocation, shareholder communication, and aligned incentives."
Judge management by actions, not words.
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John Neff📌 Business Judgment
John Neff's Business Judgment Rules
John B. Neff (September 19, 1931 – June 4, 2019) was an American investor and mutual fund manager. He managed the Vanguard Windsor Fund from 1964 to 1995, achieving an average annual return of 13.7%, outperforming the S&P 500 by over 3% annually for 31 years. Neff was known as a "low P/E investor," consistently seeking undervalued stocks that the...
3 principles·Business Judgment
3 Key Business Judgment Principles
#2
Industry Structure Analysis
"Understand the industry structure before evaluating any company. Industry economics often matter more than company-specific factors in determining returns."
Industry structure shapes investment outcomes.
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Capital Allocation Assessment
"The most important skill for a CEO is capital allocation. Evaluate how management deploys capital — do they create or destroy value with their decisions?"
Evaluate management's capital allocation skills.
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What are John Neff's key business judgment principles?
John Neff has 3 key principles on business judgment. The most important one is "Management Evaluation" — Evaluate management by their actions, not their words.
How does John Neff apply business judgment in practice?
John Neff applies business judgment through several key principles including "Management Evaluation" and "Industry Structure Analysis". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes John Neff's approach to business judgment unique?
John Neff's approach to business judgment is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, John Neff provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
