The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 48 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Davis: Private equity reporting returns without leverage adjustments is despicable
“It's just despicable that you show your returns, but you don't adjust them for leverage. Like benchmark them to the S and P with the same amount of leverage”
Davis: Asset manager incentives favor relative preservation over absolute client goals
“One of the really Deep, dark, dirty secrets of money management. Is that, you know, if you were faced with the choice of, you know, you return 10% a year for the next decade, and the market does 12, or you are zero, and the market's down two. Every money manag…”
Charlie Munger believed the intelligent loss of sales actively improves businesses
“Charlie's phrase was the intelligent loss of sales. He said, you're young and you just think more is better. More is better. More is better, but more is not necessarily better. It's who do you keep out?”
Davis: Raising kids in luxury creates unhappiness if they cannot maintain it
“What doesn't work is giving your kids a lifestyle where they will feel like a loser if they are unable to maintain that lifestyle on their own merit. I just think that, you know, if you do the Southampton, Palm Beach Aspen, like, you're creating kids that Eith…”
Davis: Wealthy parents damage kids as much by manufacturing hardship as spoiling
“I've seen just as much damage done by wealthy families trying to build character as I, as I've seen the opposite.”
Davis: Trimming fund holdings because they grow too large is a mistake
“If I had simply bought each stock that I ever bought for the funds in a personal account and held it, then I simply never would have sold simply because something was getting too big. Whereas in the funds, I do that all the time, and it's been a terrible mista…”
Davis: Any writing advantage humans have over AI won't last long
“I don't think it will be more effective. I mean, I think that, or if it is, it's only because I still have a little lead on AI, but Eh, it ain't gonna last for long.”
Davis: VR and AR will replace smartphones and restore broadsheet-style reading
“It's actually one of the reasons I'm fairly optimistic that whatever replaces this shitty little, you know, five inch rectangle that we all carry around in our pocket, that is a very, very poor way to get information, this tiny little screen. And, you know, wh…”
Davis: Risking a 100% loss on an investment is rational with proper sizing
“At an individual investment level, you know, risk is about the permanent Loss of capital in that investment, and really over a course of a portfolio, because you can be taking a risk of a hundred percent loss in an investment, and it can be a very rational ris…”
Davis: The US will only repay its debt by devaluing currency through inflation
“Certainly inflation will have to, the only way we can repay the debts that we've incurred is going to be by, you know, devaluing the currency so we can pay back.”
Davis: Capital One at a 14% earnings yield beats single-digit real estate cap rates
“I could buy Capital One at a 14% after tax earnings yield. I mean, what's so great? I don't understand this real estate mindset that still thinks that a single digit cap rate, you know, compensates them for the risk that they're taking.”
Davis: Private equity firms focus primarily on exits rather than stewardship
“Private equity loves to tout that they are great managers. They are always looking for the exit”
Davis: Credit ratings reliably predict auto insurance accident risk
“Somebody's credit rating is a great predictor of whether they'll crash their car. Well, because they're responsible and they tend not to cheat.”
Davis: Charlie Munger Dressed Conventionally to Mask His Eccentricity
“Charlie always talked about dressing conventionally, you know, wearing, he said he's so eccentric in other ways that by wearing a suit and tie, people assume that he's more conventional than he is, and that serves him.”
Davis: Money does not ruin kids, parents and genetics do
“Well, I like what, you know, Charlie said that, that money doesn't ruin kids, you know, parents do, and I would add genetics can too.”
Davis: Hewlett-Packard board bears responsibility for decades of bad leadership decisions
“I would certainly argue that both Hewlett Packard and Koch, the boards had a lot of accountability for decades of bad decisions. And it was bad decisions on what is the board responsibility, which is who's in charge.”
Davis: Oppenheimer Will Probably Attract More People to Physics Than STEM Funding
“Oppenheimer will probably draw more people into physics, you know, than STEM funding in high schools will.”
Davis: Writing is about what you learn for yourself, not the client
“The writing is not about the product for the client. It's about what you learn by writing for yourself.”
Davis: Grandfather Levered Up on Margin in 1975 After 80% Drawdown
“My grandfather had been living overseas. He was ambassador from 68 to 75 in Switzerland. And he comes home and he's like, this looks great. Now his net worth was down 80%. You know, huge loss but he hadn't experienced it viscerally. So he just came in and he w…”
Davis: Banks go illiquid before insolvent; insurers go insolvent before illiquid
“Banks go illiquid before they go insolvent, and insurance companies go insolvent before they go illiquid”
Davis Advisors suffered a 90% single-day dilution on AIG during 2008
“Then bam, one day we're down 90, 90% diluted in a single day. And of course you couldn't, couldn't recover. And by the way, when it was all fully said and done, it was probably more like 95%.”
Davis: De-risking from Wells Fargo to Nestlé in 2008 led to underperformance
“So, we de-risk the portfolio. Now, I had studied my dad enough to know that going to 30% cash was not the right thing to do, but it may have been, you know, selling some wells and buying Nestle. That ensures that if the crisis gets worse, we're gonna own busin…”
Davis: Max-betting every positive expectation edge guarantees ruin
“It was such an insane theory. To think that, you know, the theory would say bet it all every time that you have an advantage. And if everybody did that, you would get a better outcome net. But of course, it's an insane theory because you're certain to end up a…”
Davis: Berkshire is managed assuming shareholders have 100% net worth in it
“Berkshire is run with the idea that some, that, that from the very beginning that the people that were invested in Berkshire had a hundred percent of their net worth in Berkshire.”
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.”
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…”
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…”
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…”
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…”
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…”
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.”
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.”
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.”
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 …”
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.”
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…”
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”
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.”
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…”
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 …”
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.”
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…”
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.”
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…”
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…”
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…”
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 …”
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.”