Customer Reviews

The Davis Dynasty: Fifty Years of Successful Investing on Wall Street

5 star:		(7)
4 star:		(1)
3 star:		(1)
2 star:		(0)
1 star:		(0)

 

 

I personally don't care for dry investment books. I read for entertainment. This book provides a great combination as it is a biography of a family steeped in money management and also gives tips of how they were able to grow their fortune.

The book traces the investment history of Shelby Davis to his son to his grandsons. Shelby had family money through his wife and starts investing shortly after the crash in '29. Like many people, I assumed the market has been a somewhat continual climb with some setbacks. This books traces the history showing the many periods of lackluster stock value growth and how most Americans shunned the stock market for bonds. Quite a difference from today.

The original Shelby was a miserly value investor who never spent an extra dime. His investment hits were insurance stocks when no one liked that industry and some prudent investments in Japan, also mainly in the insurance industry. By leaving these investments to compound for years, Shelby built a great fortune. But the hidden engine behind this vast growth was the use of margin to leverage his returns. The original Shelby eventually grew his fortune to over a billion dollars in value.

Shelby's son Shelby did not work with his father until late in his life but eventually became a money manager of some renown also. His philosophy was similar but different and his large money winners tended to be from other industries. The book ends with the sons of Shelby Jr. taking over their father's money management firm and establishing their own identity.

Along this 70 year history, you will learn about the markets and the different stages of development over the years. A significant amount of time is spent in the 60s and 70s as both of the Shelby's were investing at that time. I strongly recommend this book if you have interest in the market and its history.

This is one of the better investment books on the history of post-WWII stock investing. While there are a number of absolute classic books on the 1920s and earlier periods (Lefevre's "Remininscenses of a Stock Operator", Galbraith's "The Great Crash", Brooks's "Once in Golconda", to name just a few), there aren't as many great books on recent history. This is one of them, however.

The Davis family, starting with Shelby Collum, is used by the author as a vehicle to traverse the history of the stock market from WWII through the late 1990s. Followers of mutual fund investing in the past 25-30 years are probably more familiar with Shelby Davis the younger, than with his father Shelby Collum. But it was the elder Shelby that made the family fortune. His is one of the great fortunes ever created strictly through long term investment and is a story of buying extreme value and holding for very long time periods. It's also about venturing into uncharted waters -- like being one of the first to invest in Japan.

This theme is carried forward to the story of his son, the well-known former portfolio manager of New York Venture Fund. Shelby the younger came of age in the go-go sixties and picked up some bad habits. The savage bear markets that followed chastened him and forced him to revert to a style of investing closer to his father's in the mid 1970s. The tensions between them created a sort of competition with the son posting a tremendous record with his mutual fund vehicle, New York Venture.

The relationship between father and son would be best described as "semi-estrangement." It took Shelby's sons, Andrew and, particularly, Chris to reconcile their father and grandfather's differences. The human story is interesting, and the elder Shelby was quite a character. I found the chapter on Chris's "apprenticeship" with his grandfather fascinating -- perhaps the best part of the book. In short, Shelby the elder is getting old and wants to retire and turn his portfolio over to a younger generation for management, but because of the bad feelings he doesn't know how to approach his son. And it's clear that he greatly admires the record his son has build with NY Venture. So he talks grandson Chris Davis (now the co-manager of NY Venture and Selected American Shares) into inventorying his portfolio. Chris then brings his father into the picture and the two of them work long hours reading through the 5 decades of trades and holdings. The portfolio at that time was close to $1 billion.

The story ends with the younger Shelby's semi-retirement and turning the reins over to sons Andrew and Chris, and Ken Feinberg, who continue with this style of investing. The mutual funds and separate accounts run by the Davises typically have portfolio turnover rates less than 20%, often less than 5%. This means they buy and hold, and hold, and hold. However, it's the price they pay for stocks that really juices their returns. The pigeonhole mentality at mutual fund rating agencies like Morningstar don't adequately describe Davis funds because of this. The Davises buy deep value, but after a stock recovers from whatever temporary trauma caused the bargain price, they continue to hold as long as the company meets their growth expectations. So Morningstar, for example, will call them a "blend" fund, which seems to say absolutely nothing about such a distinctive methodology as the one the Davises follow. This book is an elucidation of the emotional discipline and intellectual process behind this style of investment. Both the book and the investment style are highly recommended by this reader.

John Rothchild has written a fascinating biography of one of Wall Street's most successful and least-known investors, Shelby Davis, who turned a $50,000 initial investment in 1947 into $900 million, almost exclusively by buying and selling insurance stocks. Part character study, part Wall Street history, Rothchild's book reads like a novel, with an accessible and witty narrative. Of special note is the concise summary of Davis' investment strategy, which rivals Buffettology in its simplicity and common sense. In Rothchild's hands, Davis' life becomes a fun read, no matter what your business interests, and we from (..)recommend this book to all curious readers.

While this is not a "how to" book it certainly is "why to" book. It's a look at remarkable family that gives anyone who has never invested in the stock market a perfectly good reason why they should! Patience and long term results are a philosophy that has worked well for them over the years. It's a look at a concept and philosophy handed down by the patriarch of the family that wealth should not be handed down, but earned. Spanning 4 generations, Rothchild gives the reader a remarkable insight into a family that works hard and plays hard. Even with this success the family has given back through many philanthropic endeavers including millions to the United World College. The college, with 10 campus' world-wide endeavers to bring students of different cultures and backgrounds together to foster understanding of each other in a world that desperately needs it.

This book is a biography of the Davis family comprising the father, son, and two grandchildren, who were all involved in the money management business. The philosophy of buying stocks at reasonable prices and holding them for years has been around for decades. Even though this philosophy worked for Shelby Davis, the father, who turned $50,000 into $900 million, today, few investors have this kind of patience and instead, employ all kinds of other short-term schemes. I found it very interesting when the son strayed away from his father's philosophy in the 1960s, but when the bear market put him in place, he readjusted his investment style to be closer to his father's. When the father wanted to retire, he asked his grandson to take over the management of his portfolio because he did not have the best relationship with his son.

This book is a representation that buying value and holding for long periods of time works. I thoroughly enjoyed reading this book.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

This book is about The Davis strategy - the result of five decades of trial, error, and refinement, that worked its way through father, son and grandsons, and each generation tweaked it and tuned it to fit the era. The 10 basic tenets remain the same: avoid cheap stocks; avoid expensive stocks; buy moderately priced stocks in companies that grow moderately fast; wait until the price is right; don't fight progress; invest in a theme; let your winners ride; bet on superior management; ignore the rear-view mirror; stay the course.

This book is both a biography and the analytical work devoted to the stock market. If you like such a blend, I would recommend the books by Roger Lowenstein: "Buffett: The Making of an American Capitalist", "When Genius Failed: The Rise and Fall of Long-Term Capital Management" and "While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis". The books by Roger Lowenstein are much better than "The Davis Dynasty" in terms of the depths of the analysis, as well as when it comes to liveliness and variety.

In addition to this book, I can also recommend my favorite title on investing "The Only Three Questions That Count: Investing by Knowing What Others Don't" by Kenneth L. Fisher.

Great book, I downloaded to my kindle. I'm a big fan of bio's on real estate developers and value investors. Shelby Sr and Jr are incredible models to follow and the book goes into their methodology. Like all great investors, they adhere to a strict value investor model like Graham, Buffett, Klarman, Greenblatt and others. I am really inspired by Davis (Sr) and love the principles he preached and lived. What a role model, I can relate as if I knew the man. My grandfather would always say, "You need to save that money" and towards the end of his life, he would say, "You need to invest that money." I can imagine Davis (Sr) saying the second part. This is both entertaining and full of wisdom. High marks!!!

this is a really good biography on someone who is relatively unknown. It weaves a biography and important investing lessons. However, if you had to choose one, i would recommend Roger Lowenstein's American Capitalist, which portrays Warren Buffet

This book is listed as Elementary Reading for the [...] Hidden Gems Newsletter. It provides great historical reading about the Davis family. Before the reading the book I had no idea who the Davis family was. I did not even realize we have the Davis Fund as a choice in our 401k at work. The fund has proven returns and been around for years. This was a great book to read for any beginning investor.