The Davis Dynasty: 50 Years of Successful Investing on Wall Street (Paperback)

~ John Rothchild (Author) "SHELBY CULLOM DAVIS WAS BORN IN 1909, IN A nice neighborhood in the town that inspired the famous question: Will it play in Peoria?..." (more)
Key Phrases: insurance stocks, times earnings, stock picker, New York, Wall Street, Wild Bill (more...)

Editorial Reviews

From Publishers Weekly

In 1988, Shelby Davis was listed as one of the 400 richest Americans by Forbes magazine, with assets of $427 million, which had grown from $50,000 in 40 years of investing in insurance company stocks. The same year, his son, also named Shelby Davis, made the Forbes Honor Roll for reliable mutual fund investments. Four years later, members of the third generation, Andrew and Chris Davis, joined the family business: Chris working for his father, managing mutual funds, while Andrew managed his grandfather's personal holdings. The elder Shelby Davis, who died in 1994, emerges as the most intriguing character in this family saga: before turning to investing in midlife, he was an author and political player; in his later years he became a prominent philanthropist and ambassador to Switzerland. He embroiled the family in tabloid headlines in the early 1960s by attempting to give his daughter's trust fund to Princeton University without telling her. Unfortunately, Rothchild was unable to get much insight into these characters either through documentation or interviews. The younger Davises cooperated with the book, but lead less broad and colorful lives than their progenitor. The result is a gentle and superficial family saga interspersed with common sense investment wisdom applied to 50 years of financial history. (Sept.)Forecast: With all due respect to Shelby Davis, he is a B-list investment celebrity: Warren Buffett, Peter Lynch and other A-listers command more attention for espousing similar principles. This book will appeal mainly to those who have already read the classic great investor biographies (including the same author's bestselling One Up on Wall Street, about Peter Lynch).

Copyright 2001 Cahners Business Information, Inc.

From Library Journal

Books on successful Wall Street investors have become common currency in publishing. Here, Rothchild (One Up On Wall Street) examines the legendary Shelby Davis, who founded Davis Selected Advisors in 1947. Rothchild chronicles how over the years Davis, his son, and his grandchildren have created a literal "family of funds" generating enormous returns for their investors. Davis and his progeny were somewhat conservative in their investment philosophies. They chose insurance companies, banks, and other financial institutions to invest in for the long-term, and the returns were nothing short of astonishing. Unfortunately, much of the historical eyewitness accounts provided here seem leaden. This, combined with an almost pedestrian writing style and the author's often fawning attitude toward the Davis family, makes for a rather lightweight work. Readers wishing to learn about the investing philosophy of another mutual fund founder should consider John Bogle on Investing: The First 50 Years (LJ 10/1/00) as he recounts his involvement in the Vanguard mutual fund family. Not an essential purchase. Richard Drezen, Washington Post, New York City Bureau
Copyright 2001 Reed Business Information, Inc.

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Product Details

• Paperback: 320 pages
• Publisher: Wiley (August 3, 2001)
• Language: English
• ISBN-10: 0471331783
• ISBN-13: 978-0471331780
• Product Dimensions: 9.1 x 6.2 x 1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.6 out of 5 stars  See all reviews (8 customer reviews)
• Amazon.com Sales Rank: #392,214 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

12 of 13 people found the following review helpful:

5.0 out of 5 stars Combination biography and investment ideas, February 26, 2002

By	R. Spell "raspell" (Memphis, TN USA) - See all my reviews (TOP 1000 REVIEWER)    (REAL NAME)

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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.

4 of 4 people found the following review helpful:

5.0 out of 5 stars Family history and market history in one, February 15, 2007

By	Bstone "BStone" (Boston) - See all my reviews

This review is from: The Davis Dynasty: Fifty Years of Successful Investing on Wall Street (Paperback)

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.

6 of 7 people found the following review helpful:

5.0 out of 5 stars Highly Recommended!, January 29, 2002

By	Rolf Dobelli "getAbstract.com" (Switzerland) - See all my reviews (TOP 50 REVIEWER)    (REAL NAME)

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.