#1
Manage Downside Risk
"Low P/E stocks have built-in downside protection. The expectations are already low."
Low P/E stocks provide downside protection through already-low market expectations.
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John Neff🛡 Risk Management
John Neff's Risk Management 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·Risk Management
3 Key Risk Management Principles
#2
Risk-First Approach
"Before considering how much you can make, consider how much you can lose. Risk management is not about avoiding risk entirely, but about understanding and controlling it."
Consider the downside before the upside.
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Position Sizing Discipline
"The size of your position should reflect your conviction and the risk involved. Never bet so large that a single mistake can wipe out your portfolio."
Size positions based on conviction and risk.
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What are John Neff's key risk management principles?
John Neff has 3 key principles on risk management. The most important one is "Manage Downside Risk" — Low P/E stocks have built-in downside protection.
How does John Neff apply risk management in practice?
John Neff applies risk management through several key principles including "Manage Downside Risk" and "Risk-First Approach". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes John Neff's approach to risk management unique?
John Neff's approach to risk management 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.
