Assertion Supported
Davis: Baupost cash allocations have historically averaged 15% to 40%
“The cash, if I remember rightly at Baupost is sort of average between, you know, 15 and 40% for sort of the whole time. I don't think there's ever been a time when it's gone, maybe below 15.”
Insight
Davis: Berkshire generated outperformance without penalizing investors for extreme conservatism
“It's been run in this incredibly conservative way, but you haven't paid any price for that as an investor. Except some weird theoretical suboptimal outcome. But the fact is that you got your cake and you got to eat it too. You got to have, you know, longterm w…”
Insight
Davis: Lowering spending matters most because it annuitizes a lower spending rate
“The number one is if you can get them to spend less, that, that, that has just a huge benefit, right? Because it's not that they spend less, which means that they have more to save you know, more to invest for next year or the year after that. That's true. But…”
Disclosure
Davis Advisors mistakenly sold 17 million shares of Costco bought at $27
“Costco closed at 41, had been come down from 45. It was a momentum growth
Stock darling. They reported a bad quarter that stock opened at 27. And we amazingly bought seventeen million shares that day. It was one of the great trades my whole career. And you cou…”
Assertion Supported
Davis: Berkshire's charity program made its shares difficult to borrow and short
“Berkshire for many, many years had a charity program where if you owned a share of Berkshire each year, you were given a dollar amount per share that you could assign to any charity of your choice... But In order to be able to do that, you had to own the share…”
Assertion Supported
Davis details Warren Buffett's five root causes of money manager underperformance
“In our research department, we have a letter that Warren wrote in 1965, I think that, or 66 that lists the reason that he believes most money managers, institutional managers tend to underperform.
And we framed that letter and put it on the wall in the researc…”
Assertion Contradicted
Davis: Athletic Brewing is probably worth $1B to $2B
“I would say there is good no alcohol beer the athletic club. I mean, that, by the way, that's a company that probably has got a, probably worth over a billion dollars today or two billion dollars, a couple of guys in Connecticut.”
Disclosure
Davis offered his teenage kids $700 cash to fly coach over business class
“I hit on this idea about when they were your kid's age of I'll split the difference with you. Like I literally will write you a check. You can choose. Like, we'll get you a seat in business class, or you get 700 dollars.”
Insight
Davis: High-performing people who fail are simply in the wrong job
“If they have that credential, and that work ethic, and that level of IQ, and processing speed, and communication skill, and, you know, value system, and they aren't succeeding, they're just in the wrong job.”
Insight
Davis: Befriending a 12-year-old and parenting a 40-year-old are big parenting errors
“I would say the most dangerous thing in the world with a twelve-year-old is to try to be his friend. But, you know, the worst thing with a forty-year-old is to try to be their parent. You know, you, you've got to figure out how to transition that relationship …”
Insight
Davis: Wealth building slows as risk tolerance declines across generations
“If you started with nothing, you had to be such a risk taker. And then I think what happens is that propensity to risk falls over the generations, but often so does the corresponding ability to build wealth.”
Assertion Not checkable as stated
Davis's father refused to invest in Apple because Steve Jobs wore sandals
“I remember my father telling the story about these hippies in his office at fiduciary trust company, you know, in, in downtown New York, respectable trust bank. And he said, this guy shows up in sandals. In sandals. He couldn't believe it. He said, how can a g…”
Insight
Davis: Investment research is a numbers game where ten calls yield one insight
“You call 10 companies, you learn one thing, you call 20, you learn two, and you know, so it was sort of a numbers game”
Assertion Supported
Davis: Father Held 30% Cash in 1975, Lagging the Recovery
“My father was 30% cash in 1975. And so the fund dramatically lagged in one of the best market years of a decades. 75 and market went up 30% or something like that. And you know, the fund probably went up 20 because it was a third in cash.”
Assertion Supported
Davis: Value Managers Gained 9% to 25% During 2000 Market Drop
“In 2000, the market went down nine percent, if I remember right, maybe nine, nine and a half. And it wasn't like, managers like us who had stuck to sort of a discipline, you know, went down two and the market went down nine. It's like we were up nine or 10, yo…”
Disclosure
Davis: Davis Advisors held no Bear, Lehman, Fannie, Freddie, or Countrywide in 2008
“If you think of the six horsemen of the apocalypse in the financial crisis, you know, Bear, Lehman, Fannie, Freddie Wamuu, Countrywide you know, we didn't own a share of any of them, and yet here I am running a financial fund, running a fund that probably had …”
Assertion Supported
Davis: Amazon succeeded without creating super-voting share structures
“Amazon never needed that. They didn't create super voting shares where you could own a tiny economic interest.”
Assertion Supported
Davis: Grandfather grew $100K into $2B and gave 100% to charity
“My grandfather built this fortune. I mean, it was amazing. He started borrowed a 100,000 dollars. When he died, it was eight hundred million. It was held in a trust as long as my grandmother, his wife was alive. And when she died, it was two billion. But a hun…”
Disclosure
Davis journals every alcoholic drink weekly to prevent addiction
“That's an area where, you know, I keep a journal of every alcoholic drink I have a week.
Because I love alcohol.”
Disclosure
Davis: I avoid ultra-wealthy enclaves like Southampton to check personal envy
“And so a big part of checking that weakness in me is not to get in that pool. And so, you know, I don't go to South Hampton, not because I don't think it would be lovely and not because there aren't some amazing, interesting people that I admire hugely that li…”
Assertion Supported
Davis: Graham family sold The Washington Post over 7 months without leaks
“The Washington Post evolved. I mean, it was one of the great, great examples in all of corporate history of fiduciary leadership and servant leadership of the Graham family to make the decision to sell the newspaper that it needed to be in safer and better han…”
Insight
Davis: Children judge elders narrowly due to their own limited perspective
“I think of the, you know, the old expression, no man is a hero to his valet. Well, that, that's probably true with kids and grandkids too. You know, they have a very narrow way of judging people. And, you know, when Churchill said that, that shows the limits o…”
Disclosure
Davis: Parents required summer jobs and covered pay for unpaid internships
“There was a rule from about the time we were 13, which was, you know, you were allowed in the house, you know, three weeks without a job, so that sort of got you through. You know, Christmas break or spring break, but the assumption was you were going to work …”
Assertion Not checkable as stated
Davis: NYC pooper-scooper law raised dog-walking earnings to $100/week
“If I had been happy to charge 50 cents a walk that law came into place and I could charge five dollars, 10 dollars. People would pay me to come twice a day. And you know, all of a sudden, you know, I'm making, you know, a hundred bucks a week.”
