May 13, 2016

Third generation value investor Chris Davis discusses why unpopular financial stocks can actually be compounding machines.

WEALTHTRACK Episode #1247; Originally Broadcast on May 13, 2016
Listen to the audio only version here:

Explore This Episode

We have compiled additional information and content related to this episode. Select a tab from the box below for more.


Consuelo Mack

Bankers, financiers or money lenders, as they have been called derisively at various points in history are currently at one of their reputational low points. Presidential candidates from Bernie Sanders to Hillary Clinton and Donald Trump have all taken their shots. Sanders  has introduced the “Too Big to Fail, Too Big to Exist Act” which would break up the big banks.

Dislike of banks and bankers is not a modern phenomenon.

Thomas Jefferson once stated: “I believe that banking institutions are more dangerous to our liberties than standing armies.” You can see why he and Alexander Hamilton, who created the first national bank and was the first Treasury Secretary, had their disagreements!

Even some titans of industry have been critics. Henry Ford, the Founder of the Ford Motor Company was one of them, stating: “It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.”

Luckily, that revolution never came. For the record, banking and Wall Street provide the essential fuel for economic growth, mainly money and credit. They enable individuals, companies and governments to raise capital, buy goods and services, build, expand and invest. As this week’s guest points out, the vast majority of us are bank customers!

Investing in financial stocks in recent years has been challenging. Over the last decade the S&P 500 Financials Index has delivered negative annualized returns whereas the S&P 500 has not. And although their annualized performance over the last five and three year periods has been close to 10%, the group has continued to underperform the market.

This week’s guest is Christopher Davis, a third generation value investor whose family has a long history of investing in financial stocks and continues to do so today. Davis is Chairman ofDavis Advisors, Portfolio Manager of the Davis large cap portfolios, and Co-Portfolio manager since 1995 of the firm’s flagship Davis New York Venture Fund, which was founded by his Dad in 1969. Chris has also been the Portfolio Manager of the fund’s no-load equivalent, Selected American Shares since its launch in 2004. In 1991 he created the Davis Financial Fund, now celebrating its  25thanniversary. Rated 4-stars by Morningstar, the fund has far outperformed its benchmark and the market since inception with better than 11% annualized returns. I began the interview by asking Chris why he created a fund focused on financial stocks in the first place.

If you’d like to see the show before it airs, it is available to our PREMIUM subscribers right now.  We also have an EXTRA interview with Davis about how his approach differs from his grandfather’s and father’s. It is available exclusively on our website.

WEALTHTRACK is also available on a YouTube Channel.  So if you are unable to join us for the show on television, you can watch it on our website, WealthTrack.com, or by subscribing to our YouTube Channel.

Thanks for watching. Have a great weekend and make the week ahead a profitable and a productive one.

Best Regards,

Consuelo Mathews Asia


“All the commercial push is behind telling you that you ought to think about doing something today that’s different than you did yesterday. You don’t have to do that. You just have to sit back and let American industry do its job for you.” – Warren Buffett


Berkshire Hathaway Inc B (BRK.B)

  • Price: $143.24 on 5/11/16
  • 52-week range: $123.55 – $148.57

BRK.B Chart

BRK.B data by YCharts

Berkshire Hathaway Inc A (BRK.A) BRK.A Chart

BRK.A data by YCharts

JPMorgan Chase & Co (JPM) JPM Chart

JPM data by YCharts

Wells Fargo & Co (WFC) WFC Chart

WFC data by YCharts

Alphabet Inc A (GOOGL) GOOGL Chart

GOOGL data by YCharts


Amazon.com Inc (AMZN)

AMZN Chart

AMZN data by YCharts



Wells Fargo & Co (WFC) American Express Co (AXP) AXP Chart

AXP data by YCharts

Bank of New York Mellon Corp (BK) BK Chart

BK data by YCharts

JPMorgan Chase & Co (JPM)


American Express Co (AXP) Bank of New York Mellon Corp (BK) Costco Wholesale Corp (COST) COST Chart

COST data by YCharts

Wells Fargo & Co (WFC)

This transcript will be available soon. More information regarding WEALTHTRACK transcripts can be found here

Christopher Davis from the WEALTHTRACK Archives:


Some things change. Some stay the same. Third generation investor Chris Davis is carrying on the family tradition in the Davis Funds with a difference.

Back to Top