Over 40 Years of Reliable Investing

Over 40 Years of Reliable Investing™
Table of Contents
The Successful Investor 1
Uncertainty is the Rule, Not the Exception 2
Focus on What is Important and Knowable 3
Be Patient 4
Expect Periods of Disappointment 5
Engage in Healthy Investor Behavior 6
Invest Systematically 7
Historically, Periods of Low Returns for Stocks
Have Been Followed by Periods of Higher Returns 8
The Seven Timeless Strategies For the Successful Investor 9
1
The Successful Investor
1As of December 31, 2010. 2Shelby Cullom Davis borrowed $100,000 in 1947 and turned it into an $800 million fortune by the year
1994. While Shelby Cullom Davis’ success forms the basis of the Davis Investment Discipline, this was an extraordinary achievement and
other investors may not enjoy the same success.
The Davis family is one of the most successful investment stories
in American history, having accumulated a fortune of more than
$2 billion1
through buy and hold investing for over 60 years and
three generations of portfolio management.
Starting in 1947, Shelby Cullom Davis, a former insurance commissioner,
invested $100,000 in durable, well-managed businesses
at value prices and compounded his fortune into over $800 million
by the early 1990s.2
With the aim of offering his father’s investment
discipline to a greater diversity of investors, son Shelby M.C. Davis
founded Davis Advisors in 1969 and created one of the most
distinguished track records of any manager on Wall Street. Today,
the Davis family investment fortune is managed by Portfolio
Managers Christopher C. Davis, Kenneth Charles Feinberg and
Andrew A. Davis.
While many would attribute the Davis family’s extraordinary
success to investment selection, this tells only part of the story.
The other major contributor to the family’s ability to build wealth
has been its adherence to a set of basic investment principles
and strategies that any individual can learn and practice. Specifically,
the Davises have always advocated setting realistic return
expectations for equities, focusing on what’s important and
knowable, engaging in healthy investor behavior, being patient,
and understanding that periods of disappointment are inevitable.
In the following pages, we introduce some of the time-tested
principles that have guided the Davis family through both good
and bad periods of market history. While not an exhaustive list,
these basic lessons constitute keys to the family’s success learned
over 60 years, and we hope they will serve as a useful guide in
helping you achieve your ultimate financial goals.
Lessons from Over 60 Years of Success on Wall Street
Shelby Cullom Davis
2
Long-term investors in equities are always faced
with uncertainty. In the 1970s, investors had
to weather the ’73–’74 bear market, geopolitical
turmoil culminating in the Iranian hostage crisis,
rampant inflation, and skyrocketing energy
prices. In the 1980s, investors were faced with
Black Monday, the Iran-Contra scandal, an
assassination attempt on Ronald Reagan, and
the S&L crisis. In the 1990s, investors experienced
a euphoric bull market, the repercussions
from the collapse of Long-Term Capital, the
Asian currency crisis, and the Russian default.
Throughout the 2000s, investors dealt with
the bursting of the tech bubble, an economic
recession, geopolitical turmoil in the Middle
East, myriad natural disasters, corporate scandals,
rising energy prices, and the sub-prime
mortgage crisis.
Clearly, the past 40 years have dealt long-term
equity investors their share of uncertainty.
But through it all, the long-term upward progress
of the stock market has not been derailed,
as illustrated by the chart below. In fact, since
1970, the S&P 500® Index has increased over
4,860%, which would have compounded a
hypothetical $10,000 initial investment into
over $495,973, an almost fifty-fold increase.3
As Christopher C. Davis, Davis Advisors Portfolio
Manager, once remarked, “Building longterm
wealth is like driving an automobile. If you
narrowly focus on the stretch of road a few feet
in front of your car, you risk making unnecessary
adjustments and oversteering. Only when you
lift your eyes to focus further down the highway
will you successfully reach your destination.”
Uncertainty is the Rule, Not the Exception
Source: Yahoo Finance. Graph represents the S&P 500® Index from January 1, 1970 through December 31, 2010. Past performance is
not a guarantee of future results. 3This hypothetical investment assumes an investment on January 1, 1970 through December 31,
2010. Past performance is not a guarantee of future results.
1,600
1,400
1,200
1,000
800
600
400
200
100
60
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
S&P 500 12/31/10 ® Index
S&L Crisis, Russian Default,
Long Term Capital,
Asian Contagion
The 1990s
Sub-Prime Debacle,
Economic Uncertainty,
Financial Crisis
Internet Bubble, Tech Wreck,
Telecom Bust
The 2000s
Despite Decades of Uncertainty, the Historical Trend of the Stock Market Has Been Positive
Today Junk Bonds, LBOs,
Black Monday
The 1980s
The 1970s
Nifty-50, Inflation,
’73-’74 Bear Market
3
Shelby Davis, Founder of Davis Advisors, once
stated, “If we accept that investing through
uncertain times is the rule, not the exception,
then the question to ask in my opinion is
not whether or when to invest, but how
to invest...”
At Davis Advisors, in order to build long-term
wealth for clients, our investment process focuses
on what is important and knowable. Instead
of focusing our research efforts on issues such
as the direction of the stock market, interest rates,
oil prices, and earnings, which in our opinion
are all important but, unfortunately, unknowable
over the short term, our research attempts to
uncover such important and knowable issues
as the quality of a business’ management team,
the financial condition of a business, a business’
competitive moats, and the quality of its earnings.
By relentlessly focusing on what is both important
and knowable, the Davis New York
Venture Fund has delivered attractive results
in many different market, geopolitical and
economic environments throughout the 1970s,
1980s, 1990s, and 2000s.4
In fact, as illustrated by the chart below,
the Davis New York Venture Fund, through
periods of inflation, deflation, rising and
falling interest rates, and bull and bear
markets has outperformed the S&P 500®
Index for every 10 year period since its
inception in 1969.5
Focusing on the important
and knowable can help investors build wealth
over many different market, economic and
political environments.
As Mark Twain said, “It ain’t what you don’t
know that gets you into trouble. It’s what you
know for sure that just ain’t so.”
Focus on What is Important and Knowable
Average Annual Total Returns
as of December 31, 2010 1 Year 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
Davis New York Venture Fund, Class A
with a maximum 4.75% sales charge 6.80% 0.44% 2.13% 7.83% 10.82% 11.41% 12.42% 14.10% 12.67%
The performance presented represents past performance and is not a guarantee of future results. Total return assumes reinvestment of
dividends and capital gain distributions. Investment return and principal value will vary so that, when redeemed, an investor’s shares may be
worth more or less than their original cost. The total annual operating expense ratio for Class A shares as of the most recent prospectus was
0.89%. The total annual operating expense ratio may vary in future years. Returns and expenses for other classes of shares will vary. Current
performance may be higher or lower than the performance data quoted. For most recent month-end performance, visit davisfunds.com or call
800-279-0279. Rolling 10 year returns would be lower in some periods if a sales charge were included. See the endnotes for a description of this
chart and a definition of the S&P 500® Index. 4Past performance is not a guarantee of future results. 5Class A shares, not including a sales charge. Returns would be lower in
some periods if a sales charge were included. Inception was 2/17/69. Past performance is not a guarantee of future results. 6Returns calculated from 2/17/69 through 12/31/78.
Davis New York Venture Fund (Class A, without a sales charge) S&P 500® Index
4.76 6.1 13.4 10.8 11.1 16.6 19.8 21.1 21.2 20.5 20.7 20.3 15.7 19.5 18.2 17.5 16.8 17.0 17.4 21.1 20.4 18.8 20.3 14.8 11.4 12.9 14.4 11.7 10.7 8.0 1.2 2.4 2.6
3.36 5.9 8.5 6.5 6.7 10.7 14.8 14.3 13.9 15.3 16.3 17.5 13.9 17.6 16.2 14.9 14.4 14.9 15.3 18.0 19.2 18.2 17.4 12.9 9.3 11.1 12.1 9.1 8.4 5.9 -1.4 -1.0 1.4
4.76 6.1 13.4 10.8 11.1 16.6 19.8 21.1 21.2 20.5 20.7 20.3 15.7 19.5 18.2 17.5 16.8 17.0 17.4 21.1 20.4 18.8 20.3 14.8 11.4 12.9 14.4 11.7 10.7 8.0 1.2 2.4 2.6
3.36 5.9 8.5 6.5 6.7 10.7 14.8 14.3 13.9 15.3 16.3 17.5 13.9 17.6 16.2 14.9 14.4 14.9 15.3 18.0 19.2 18.2 17.4 12.9 9.3 11.1 12.1 9.1 8.4 5.9 -1.4 -1.0 1.4
69-78 70-79 71-80 72-81 73-82 74-83 75-84 76-85 77-86 78-87 79-88 80-89 81-90 82-91 83-92 84-93 85-94 86-95 87-96 88-97 89-98 90-99 91-00 92-01 9 93-02 94-03 95-04 9 96-05 97-06 98-07 0 99-08 00-09 01-10 -2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
Davis New York Venture Fund vs. S&P 500® Index Rolling 10 Year Return Comparison
4
Christopher C. Davis, Portfolio Manager with
Davis Advisors, once remarked that “Investors
repeatedly abandon a sensible wealth-building
strategy just because it is not generating shortterm
results, and almost without fail, give up on
it at precisely the wrong time.”
In other words, investors who impatiently switch
in and out of investments, hoping to catch the
next hot trend, stock, asset class, or geographic
area, may be doing themselves more harm than
good. In fact, history has shown that timing the
market is difficult at best, foolhardy at worst.
The benefit of a patient, long-term approach to
building wealth is illustrated in the chart below,
which groups 155 mutual funds into two categories
based on their turnover ratio. Turnover
ratio is a

Kết quả (Việt) 1:

Over 40 Years of Reliable Investing™Table of ContentsThe Successful Investor 1Uncertainty is the Rule, Not the Exception 2Focus on What is Important and Knowable 3Be Patient 4Expect Periods of Disappointment 5Engage in Healthy Investor Behavior 6Invest Systematically 7Historically, Periods of Low Returns for StocksHave Been Followed by Periods of Higher Returns 8The Seven Timeless Strategies For the Successful Investor 91The Successful Investor1As of December 31, 2010. 2Shelby Cullom Davis borrowed $100,000 in 1947 and turned it into an $800 million fortune by the year1994. While Shelby Cullom Davis’ success forms the basis of the Davis Investment Discipline, this was an extraordinary achievement andother investors may not enjoy the same success.The Davis family is one of the most successful investment storiesin American history, having accumulated a fortune of more than$2 billion1 through buy and hold investing for over 60 years andthree generations of portfolio management.Starting in 1947, Shelby Cullom Davis, a former insurance commissioner,invested $100,000 in durable, well-managed businessesat value prices and compounded his fortune into over $800 millionby the early 1990s.2 With the aim of offering his father’s investmentdiscipline to a greater diversity of investors, son Shelby M.C. Davisfounded Davis Advisors in 1969 and created one of the mostdistinguished track records of any manager on Wall Street. Today,the Davis family investment fortune is managed by PortfolioManagers Christopher C. Davis, Kenneth Charles Feinberg andAndrew A. Davis.While many would attribute the Davis family’s extraordinarysuccess to investment selection, this tells only part of the story.The other major contributor to the family’s ability to build wealthhas been its adherence to a set of basic investment principlesand strategies that any individual can learn and practice. Specifically,the Davises have always advocated setting realistic returnexpectations for equities, focusing on what’s important andknowable, engaging in healthy investor behavior, being patient,and understanding that periods of disappointment are inevitable.In the following pages, we introduce some of the time-testedprinciples that have guided the Davis family through both goodand bad periods of market history. While not an exhaustive list,these basic lessons constitute keys to the family’s success learnedover 60 years, and we hope they will serve as a useful guide inhelping you achieve your ultimate financial goals.Lessons from Over 60 Years of Success on Wall StreetShelby Cullom Davis2Long-term investors in equities are always facedwith uncertainty. In the 1970s, investors hadto weather the ’73–’74 bear market, geopoliticalturmoil culminating in the Iranian hostage crisis,rampant inflation, and skyrocketing energyprices. In the 1980s, investors were faced withBlack Monday, the Iran-Contra scandal, an
assassination attempt on Ronald Reagan, and
the S&L crisis. In the 1990s, investors experienced
a euphoric bull market, the repercussions
from the collapse of Long-Term Capital, the
Asian currency crisis, and the Russian default.
Throughout the 2000s, investors dealt with
the bursting of the tech bubble, an economic
recession, geopolitical turmoil in the Middle
East, myriad natural disasters, corporate scandals,
rising energy prices, and the sub-prime
mortgage crisis.
Clearly, the past 40 years have dealt long-term
equity investors their share of uncertainty.
But through it all, the long-term upward progress
of the stock market has not been derailed,
as illustrated by the chart below. In fact, since
1970, the S&P 500® Index has increased over
4,860%, which would have compounded a
hypothetical $10,000 initial investment into
over $495,973, an almost fifty-fold increase.3
As Christopher C. Davis, Davis Advisors Portfolio
Manager, once remarked, “Building longterm
wealth is like driving an automobile. If you
narrowly focus on the stretch of road a few feet
in front of your car, you risk making unnecessary
adjustments and oversteering. Only when you
lift your eyes to focus further down the highway
will you successfully reach your destination.”
Uncertainty is the Rule, Not the Exception
Source: Yahoo Finance. Graph represents the S&P 500® Index from January 1, 1970 through December 31, 2010. Past performance is
not a guarantee of future results. 3This hypothetical investment assumes an investment on January 1, 1970 through December 31,
2010. Past performance is not a guarantee of future results.
1,600
1,400
1,200
1,000
800
600
400
200
100
60
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
S&P 500 12/31/10 ® Index
S&L Crisis, Russian Default,
Long Term Capital,
Asian Contagion
The 1990s
Sub-Prime Debacle,
Economic Uncertainty,
Financial Crisis
Internet Bubble, Tech Wreck,
Telecom Bust
The 2000s
Despite Decades of Uncertainty, the Historical Trend of the Stock Market Has Been Positive
Today Junk Bonds, LBOs,
Black Monday
The 1980s
The 1970s
Nifty-50, Inflation,
’73-’74 Bear Market
3
Shelby Davis, Founder of Davis Advisors, once
stated, “If we accept that investing through
uncertain times is the rule, not the exception,
then the question to ask in my opinion is
not whether or when to invest, but how
to invest...”
At Davis Advisors, in order to build long-term
wealth for clients, our investment process focuses
on what is important and knowable. Instead
of focusing our research efforts on issues such
as the direction of the stock market, interest rates,
oil prices, and earnings, which in our opinion
are all important but, unfortunately, unknowable
over the short term, our research attempts to
uncover such important and knowable issues
as the quality of a business’ management team,
the financial condition of a business, a business’
competitive moats, and the quality of its earnings.
By relentlessly focusing on what is both important
and knowable, the Davis New York
Venture Fund has delivered attractive results
in many different market, geopolitical and
economic environments throughout the 1970s,
1980s, 1990s, and 2000s.4
In fact, as illustrated by the chart below,
the Davis New York Venture Fund, through
periods of inflation, deflation, rising and
falling interest rates, and bull and bear
markets has outperformed the S&P 500®
Index for every 10 year period since its
inception in 1969.5
Focusing on the important
and knowable can help investors build wealth
over many different market, economic and
political environments.
As Mark Twain said, “It ain’t what you don’t
know that gets you into trouble. It’s what you
know for sure that just ain’t so.”
Focus on What is Important and Knowable
Average Annual Total Returns
as of December 31, 2010 1 Year 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
Davis New York Venture Fund, Class A
with a maximum 4.75% sales charge 6.80% 0.44% 2.13% 7.83% 10.82% 11.41% 12.42% 14.10% 12.67%
The performance presented represents past performance and is not a guarantee of future results. Total return assumes reinvestment of
dividends and capital gain distributions. Investment return and principal value will vary so that, when redeemed, an investor’s shares may be
worth more or less than their original cost. The total annual operating expense ratio for Class A shares as of the most recent prospectus was
0.89%. The total annual operating expense ratio may vary in future years. Returns and expenses for other classes of shares will vary. Current
performance may be higher or lower than the performance data quoted. For most recent month-end performance, visit davisfunds.com or call
800-279-0279800-279-0279 FREE. Rolling 10 year returns would be lower in some periods if a sales charge were included. See the endnotes for a description of this
chart and a definition of the S&P 500® Index. 4Past performance is not a guarantee of future results. 5Class A shares, not including a sales charge. Returns would be lower in
some periods if a sales charge were included. Inception was 2/17/69. Past performance is not a guarantee of future results. 6Returns calculated from 2/17/69 through 12/31/78.
Davis New York Venture Fund (Class A, without a sales charge) S&P 500® Index
4.76 6.1 13.4 10.8 11.1 16.6 19.8 21.1 21.2 20.5 20.7 20.3 15.7 19.5 18.2 17.5 16.8 17.0 17.4 21.1 20.4 18.8 20.3 14.8 11.4 12.9 14.4 11.7 10.7 8.0 1.2 2.4 2.6
3.36 5.9 8.5 6.5 6.7 10.7 14.8 14.3 13.9 15.3 16.3 17.5 13.9 17.6 16.2 14.9 14.4 14.9 15.3 18.0 19.2 18.2 17.4 12.9 9.3 11.1 12.1 9.1 8.4 5.9 -1.4 -1.0 1.4
4.76 6.1 13.4 10.8 11.1 16.6 19.8 21.1 21.2 20.5 20.7 20.3 15.7 19.5 18.2 17.5 16.8 17.0 17.4 21.1 20.4 18.8 20.3 14.8 11.4 12.9 14.4 11.7 10.7 8.0 1.2 2.4 2.6
3.36 5.9 8.5 6.5 6.7 10.7 14.8 14.3 13.9 15.3 16.3 17.5 13.9 17.6 16.2 14.9 14.4 14.9 15.3 18.0 19.2 18.2 17.4 12.9 9.3 11.1 12.1 9.1 8.4 5.9 -1.4 -1.0 1.4
69-78 70-79 71-80 72-81 73-82 74-83 75-84 76-85 77-86 78-87 79-88 80-89 81-90 82-91 83-92 84-93 85-94 86-95 87-96 88-97 89-98 90-99 91-00 92-01 9 93-02 94-03 95-04 9 96-05 97-06 98-07 0 99-08 00-09 01-10 -2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
Davis New York Venture Fund vs. S&P 500® Index Rolling 10 Year Return Comparison
4
Christopher C. Davis, Portfolio Manager with
Davis Advisors, once remarked that “Investors
repeatedly abandon a sensible wealth-building
strategy just because it is not generating shortterm
results, and almost without fail, give up on
it at precisely the wrong time.”
In other words, investors who impatiently switch
in and out of investments, hoping to catch the
next hot trend, stock, asset class, or geographic
area, may be doing themselves more harm than
good. In fact, history has shown that timing the
market is difficult at best, foolhardy at worst.
The benefit of a patient, long-term approach to
building wealth is illustrated in the chart below,
which groups 155 mutual funds into two categories
based on their turnover ratio. Turnover
ratio is a