High Conviction Value Investing | Chris Davis |Timeless Investing Lessons
In this episode, we are privileged to be joined by Chris Davis, Chairman and Portfolio Manager of Davis Advisors. Chris has built an outstanding long-term record as a value investor and also serves on the board of both Berkshire Hathaway and the Coca-Cola Company. We discuss his process for analyzing companies and his owner earnings-based approach that led him to companies like Amazon when many value investors avoided them. We also discuss his biggest lessons from his father and grandfather, both of whom were very successful investors as well, how Charlie Munger changed his life and his thoughts on concentration and position sizing.
If you found this interview with Chris Davis valuable, you might also enjoy our interviews with well- known value investors Joel Tillinghast and Steve Romick.. Links are below
Joel Tillinghast
• Lessons From a Legenda...
Steve Romick
• Lessons From 30 Years ...
00:00 - Intro
02:01 - Chris' biggest lessons from his grandfather Shelby Cullom Davis and his father Shelby M.C. Davis
05:42 - Owner earnings - a timeless investing metric
12:27 - The dangers of trying to copy Amazon
18:28 - The characteristics of a good board of directors
25:07 - How Charlie Munger changed Chris' life
32:36 - Stewardship and the investing profession
37:32 - The challenge of holding on to winning positions
48:26 - Why sector concentration isn't a good measure of risk
53:45 - The sustainability of the largest companies in the S&P 500
01:01:20 - The one lesson Chris would teach the average investor
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Thank you for checking out Excess Returns. If you found this episode valuable, you might also enjoy our interview with legendary value investor Joel Tillinghast. Check it out here kzread.info/dash/bejne/omeOpqdxoJTHl6g.html
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Wonderful interview by Mr. Davis, questions and answers were great! One of the best discussions I have listened about what is the stock market . Several pearls of wisdom about Mr. Buffet and Mr. Munger. And humility.
Great conversation. Thank you.
Really good episode! I hope I'm as enthusiastic about my career as he is when I reach his age. I love how he highlighted his own struggles, and told us about how boards of companies should work. I could listen to him for hours
If the rules of the mutual fund industry forces investors to trim concentrated positions in a quality holding when it has a run up in order to rebalance, then wouldn't it be better to have a vehicle like Berkshire, Fairfax or Markel or Brookfield that would allow such concentrated positions ?
The description on how Amazon initially looked like it was losing money in its early years reminds me on how in the mid to late 2010's people (myself included) didn't want to purchase TSLA because it had negative cashflow and respected value investors drilled into investors that companies with negative cashflow eventually go broke.
I think it's a fallacy to think Apple is more vulnerable to change than their peers. From IBM to Microsoft to Apple, the prior product leader didn't get the next product even though the next product was just a smaller version of the same product. People see change when the most amazing thing is the continuity over decades. Apple is the 1st computer company to succeed in the last (PC) and the next (mobile). I expect the same reasons that allowed them to leverage past advantages is likely to allow them to succeed in the next. But you'd have to be able to enumerate the advantage they have that allowed them to do that to have any way of betting on whether they will or not. In fact, in 2 weeks or so they begin selling the 1st computers built on a spatial paradigm.