At bottom, what makes a value investor successful is the ability to distinguish companies that deserve to be beaten down from those that the market has punished unfairly. And that ability comes with years of experience, as well as a deep grasp of financial statements and the business cycles of many industries. But Neff is guided by certain key principles that can help any investor's returns. Take the home builder D.R. Horton. When what has everyone concerned is no longer of the moment, you make a bucket of money.
Dividends provide ballast in good and especially in bad markets.
Neff figures that more than half of his outperformance with Windsor came from the above-average yields he always sought in his selections. If a stock pick wasn't going anywhere, Neff at least had his dividend in hand. Selling requires as much discipline as buying. Neff doesn't fall in love with his stocks. That strategy helps lock in profits, with more gains to come if enthusiasm keeps building for the stock.