YouSaid · the spoken record

Chris Davis

lines on the record: 183
first: 2024-03-05
most recent: 2024-03-05
sittings or episodes: 1
sources: podcast

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“Well, that's true. I'm not a total believer. I mean, people have used that rationale to create KB stock and things like that and controlling stock.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And of course, that's been part of what's created businesses like Berkshire and Markell. I mean, I like Capital One because it's still run by the founder. He created that company, I think, in 1986 or 87, still the CEO. You know, the tenure of CEOs. I remember Freddie Heineken saying to me very early in my career, making a comment that, you know, pointing at this little kid that was playing by a swimming pool and saying, you know, I make decisions for him. That's my grandson. What a huge advantage, right? Versus the average sort of, and by the way, you know, private equity loves to tout that they are great managers. They are always looking for the exit. And that is a...”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“I think Brian Roberts is now in the top five CEOs in the S&P for tenure. And in thinking about that, I think that the median tenure is something like three and a half or four years. Whenever you get cycles that are in conflict, obviously we have an election cycle that is totally different than the policy cycle. It's one of the things that we should all, I mean, this jingoism and this anti-China sort of mindset is so dangerous because we stop learning. China has done some things magnificently well, including lifting almost a billion people out of near starvation, poverty in a generation. But one of their great strengths has been this enormous long-term focus.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“So just be prepared for that and have redundancy, have resiliency. But, you know, going, you know, imagining there's some tropical island where you can go and drop the anchor and just wait it out, that's not an option. There is no safe harbor.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Don't have too much debt, have global durable, have cash current cash that allows them to reinvent. I mean, one of the dangerous things about the most aggressive type of growth investing is it just posits a huge amount of cash in the distant future. And it really underestimates all of the risk adjustments you should be making because there's uncertainty that you will get that, but there's also uncertainty about what the discount rate should be when you get there. And I can perfectly easily see a world where rates go down to 2 or 3 percent for a couple years, and then there are eight four or five years from now. I just don't know how to handicap that. And to be fair, I've never met a rich economist. So I don't think it's really, I just think you have to think about how do you position. You have no idea if you're going to be sailing through a storm.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Seems Like pretty fabulous. And, you know, when I look at the portfolio, the positioning of our portfolio, I think owning Google feels pretty good. Owning Amazon feels pretty good. Owning Meta feels pretty good. But sure, DeSota is capital One, so does Wells Fargo, Bank of New York, tech industries, you know, the largest copper mines in the world. Whatever you believe about electrification, a lot of copper is needed and they have the longest lives, some of the lowest cost deposits in the world. So I just feel like I can't predict Stan creates a picture where I can't find any way out of it. But having said that, what am I going to do? Well, I'm going to own businesses that are resilient, that can adapt, that have pricing power, don't have too much.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“You know, venture capital, well, of course, there can be fortunes made. Private equity, I think there's one hell of a reckoning, should be coming, but I feel that in a puritanical way, and it never seems to come. They seem to get away with it. When the government tries to pass laws on carried interest, it just seems so obvious that even a friend of mine in the private equity space was like, well, it was good while it lasted. Even he couldn't believe that they're still getting away with it. It's just, so, you know, I'm jealous of the fees. I hate the accounting. I was arguing with the head of a very major private equity firm recently. And I was like, it's just despicable that you show your returns, but you don't adjust them for leverage. Like benchmark them to the S&P with the same amount of leverage. You know, with all of that said, well, it seems to me in that world, owning Berkshire.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“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 compensates them for the risk that they're taking. As I said, you buy that at a cap rate. I'm not sure you could finance it at that, but who knows? I'm no expert in real estate. So I take real estate off the table.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And so real estate scares me. I mean, I listened to the head of one of the largest real estate companies last week talk about, you know, they were seeing some unbelievable opportunities to buy buildings with 8%, 9% cap rates. What's so good about that?”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“You know, I just listened to one of the great investors of the last 50 years, Stan Druckenmiller. And I made a note of his comments because what came to mind at the end was Woody Allen's talk to the graduates when he says, you know, on one side, we face calamity and extinction. And on the other side, we face total ruin and, you know, and obliteration. Let us hope we have the wisdom to choose correctly. It's hard to see any way out. And so going back all the way to your question about positioning. I think you say, well, if that's the future, what do I do? Right, well, I could own some shiny metal. I could own some bits and bites in the form of Bitcoin. I sure as hell don't want to own any sort of fixed income instrument.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“There's so many risks. I mean, the idea that we could be giving up on one of the most powerfully constructive trends in the history of humanity. I mean, it just wins at every level. It's not perfect, but it is so important that we could be, well, one of the risks of that is if China ends up with fewer dollars, then we have fewer buyers for the debt that we're issuing. And so there's a lot of ways it could go wrong. My grandfather said, You always sound smarter if you're bearish.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Who came out of T Row Price, who talked recently, I heard him speak about 2021 versus 2023 mindset. And the 2021 mindset is still that there's free capital, that you grow, you'll always be able to get bailed out. And there's still a lot of that if you haven't been forced to the table. Now, owners of office buildings are finding that There is no access. And so you're seeing things beginning to change there. We saw some of the chaos at First Republic at Silicon Valley. Saw it in the UK pension plans. You know, you've seen these real cracks in the dike that were quite dramatic.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Because, of course, what has historically happened is that in some ways technology has often created a bailout. We will need something like that. I mean, certainly inflation will have to, the only way we can repay the debts that we have incurred is going to be by devaluing the currency so we can pay back. And you could do that gradually over a long period of time with three, four percent inflation and let that roll through and that chips away at it. And you can do that provided there's enough discipline to stop growing it. I don't think either one of those things are particularly sure bets. So I think we're still in this idea that, well, you know, there's a fabulous investment.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. Well, I think it's going to play out slowly, but it is a massive sort of turning steamroller. And I don't really see any easy way out of it. In other words, I don't see the solution. Now, I'm going to put AI on a side burner”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“But we created an artificial suppression mechanism by buying all that in and sort of, well, that was like pulling back on a slingshot. And nobody has any idea where this is going to end up. I mean, it is the idea that we're done at some of the euphoria that people feel today, that's nuts. I mean, yeah.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“The lost productivity, what they gave up the milk or they gave up the kids or whatever it was from those codes. So in order to use their goats, you had to pay them something. Otherwise, why would they give them to you? And so interest rates is really about you taking the productive asset using a productive asset that belongs to somebody else and therefore needing to compensate them for their loss of debt. So of course for all of human history, money has a cost, right? Because it wouldn't make any sense if you were providing a productive asset to somebody for free, right? So the idea that we actually created that environment and that we created this environment by driving down rates and then simultaneously printing. So much that normally would have caused, would have created a lot of inflation”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“The scale of what we've gone through is really unprecedented. And I hate that word because everything is unprecedented that's never happened before. Money has a cost for reasons that are totally obvious when you just think of the structure of what it is. Going all the way back to Babylon, which is some of the first recorded interest rates had to do with, you know, somebody has a herd of goats and you want to borrow a couple of goats for a while, right? You then, you had to return to them.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“You're sort of creating expectations. But I do think at a deeper level, I mean, the risk, the financial risk that people fear the most is this idea that somehow they lose their financial independence. And there is real dignity in that. There's dignity in financial independence, and there's a loss of dignity in becoming beholden and becoming dependent. I often think of risk around those things. And of course, at an individual investment level, 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 100% loss in an investment, and it can be a very rational risk to take. You better size it right.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And so, you know, obviously for them, risk is about that somehow that decision having been mistaken, right? In other words, they should have consumed now because they ended up with less. And so, you know, I do think that, you know, I joke that risk is about, you know, a lifestyle change. It's one of the things we often, when we spend so much time with financial advisors and financial advisors that are thinking about how to manage client behavior. And I always say, you know, the number one is if you can get them to spend less, 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's true. But what really matters is that you're newitizing a lower rate of spending.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“So I'm going to define risk in terms of the investing public. And I would say in terms of the investing public, you know, everybody who invests is making a choice not to consume now in order to be able to consume in the future. when they aren't producing.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“I mean, if I define risk as an investor, I'll always start with the client and work backwards. When I speak to a client, I think for them, the risk for them is ultimately, it's ultimately becoming beholden on somebody, right? They don't want to be beholden on the government. They don't want to be beholden on their relatives or their kids. They want that sort of financial independence. So you think very much, you know, you have this sort of responsibility where, you know, I sometimes joke, you know, risk is having being forced to change your lifestyle. There's a lot to that. You know, I think a lot of people, particularly people that are savings and investing, right? You have to recognize that there's a huge amount of people living hand to mouth and paycheck to paycheck.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“have long-term wealth creation, long-term outperformance, and this incredible durability and resiliency. And I think that's not a terrible way to live.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Because you carried the cash the whole time, you never really ran it down even when there was chaos, so the idea that, oh, it's good to have a reserve in case bad things happen, well, and yet the investors in Bablist have paid nothing for that insurance policy. Yes, there's a theoretical charge because you could say, well, if you didn't have that and we impute the rest of the return. But in a way, you've gotten this incredible performance over an incredibly long period of time and have carried that. And I feel in many ways Swordburn sure has been like that. 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.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Little more leverage, but that's not who Warren is and that's not what he wanted. And the amazing gift, and you know who I would put in this category is Seth Claran, a bow post. You know, what's so amazing is that the investors in Babylon, I haven't looked in a number of years, but if you were to look over the long term, the cash, if I remember rightly at Bao Post is sort of averaged between 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. I could be wrong, but I'm pretty. So even in times of chaos, and if you're in efficient market capture, rather, efficient frontier, quant, you'd say, well, that was an enormously costly decision.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“The outside. And if somebody was to ask me, well, was there anything that seemed different or any change in nuance or emphasis? The one thing I would say is how profoundly and deeply Warren things about risk and things about how important it is that Berkshire can withstand just about anything, just about anything. And I think, you know, publicly they talk about that. But to see in the inside what that really means, how much they and so, you know, it is really been built with the idea that this is somebody whose only asset and it needs to be built to last. And yet amazingly, I mean, Charlie in that interview talked about how they, without taking much risk, they could have added a lot to returns by having a”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And that really does shape the culture there. So it is, it's not that it's afraid of risk, but it will not, the sort of risks it takes are risks that are manageable on the income statement. The idea of Berkshire really, really being built to last, that is profoundly true. And I think that, you know, I was saying to somebody that, you know, being on the inside versus the outside of Berkshire, I mean, you know, going to Berkshire annual meetings since 1989 or something and read everything that they've ever written and all the back to the partnership letters. And so it's not like there's a big surprise on the inside.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Well, There was a beautiful last interview with Charlie that Becky Quick did. I give her enormous credit. Now, of course, she was recording that for his 100th birthday in January. It's amazing that it was like two weeks before he died. And it was, it gave me so much pleasure to watch that. I mean, because he was just so lucid and engaged. If I'm remembering right in that interview, but if not in that one over the years, it's something that he goes to over and over, is this idea, as Berkshire is run with the idea that some that from the very beginning that the people that were invested in Berkshire had 100% of their net worth in Berkshire.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think we had a great advantage in that of, for example, not having an insurance operation, because I think what was really scary for investors that had insurance operations during COVID is they had no idea what was going to happen to their liability side. And so that also terrified them at a time when the assets were going down. Whereas for us, we felt, one, we were absolutely amazed at how well investors behaved then. You didn't see big redemptions. You didn't see people running to cash. And so that allowed us to stay very steady too and to look at this horrible, terrifying. Thing, but to be able to look at it with some dispassion around the economic implications.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“that we'll take the 10 and we'll run the portfolio for that. And as I said, in the financial crisis, that meant that we de-risked. And I can't look back and I can look back and say that that was wrong in terms of what happened. But in terms of what we know at the time, I feel it was right. Or I give us some scope around that. You know, I think in COVID it was, I think it's one of the reasons, you know, some of the people that...”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“I think it's one of the things that we never want to lose track of, that, you know, ultimately, achieving 10% is way, way better than achieving zero and that we want to beat the index over time. We want to beat the competition over time. You know, if you have 5,000 competitors, you're going to have to go a very, very, very, very long time to eliminate luck being at the very top of that. But it doesn't matter to us. What matters to us is that person being able to afford their retirement. And so the zero versus the negative two.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Make us realize one of the really deep, dark, dirty secrets of money management is that, you know, if you were faced with the choice of 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 manager takes the zero, but every client would take the 10 because that is going to determine, you know, 10 years of zero return is not going to help them achieve their goals, but you will be one of the largest money managers.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“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 at zero. It's just a matter of when. And so it was such a disconnect in terms of this sort of mindset of, you know, just the complete disregard for that Kelly criteria and for that idea of living to fight. And I think it's one of the, you know, goes back to one of the reasons I love that we manage a mutual fund. I mean, I love that what we do ultimately ties to a very specific individual that is going to retire or not or is going to send a kid to college or not because it does.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Well, the absolutely optimal outcome will be achieved based on luck, right? In other words, it's somebody will buy that lottery ticket and will get a nearly infinite return, you know, a billion to one payout or whatever. And so, you know, I do think there will remain people, and you're right, in the very long term, it should be the case that if you avoid the blowups, you make progress when the sun is out, but you don't sink, that over time it will just be a war of attrition. And it's something that my friend Tom Gaynor and I talk a lot about is it's just staying in the game. And, you know, it's funny watching the, you know, the collapse of SBF and all of that. But, you know, it was.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Look at chicken guts and look at M2 supply or look at, they'll just come up with some thing that will retrospectively have been predictive. But of course, it's a correlation, not a causation. And so I think just as a firm, we think enormously about that idea of positioning and preparation versus prediction. And so we tend to think of characteristics like resilience, adaptability, durability versus optimization versus it's not an optimizing sort of approach. There will always be people that are doing better.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“One of the great gifts of ages been to me, I feel like there are some things in life that feel totally predictable. Like as you get older, you're like, well, that, I knew that marriage would never work, or I knew that was a bad idea. But you also become overwhelmed by how many things were totally unpredictable. And I think it's that focus on the second bucket makes me think a lot about positioning, about preparation versus prediction. And it is just amazing this sort of prediction industrial complex is just nothing seems able to stop it because people want to believe. They want a crystal ball and they've wanted that since ancient Greece and people have been willing to.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“in that way that we had been in the financial crisis or something like that. And so that was one where I felt we stayed very steady. And I think of all of the crises I've been through, that was the one where I felt the greatest resolve that we were on the right course, that we were cognizant of risk, but we were not in the sense of the financial crisis, de-risking the portfolio at the wrong time. We weren't letting the emotional fear that came from having your physical safety in question undermine our focus and our discipline around the portfolio. And so that was one where I felt we sort of got better.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“of underperformance relatively from that. We built wealth and we felt like that was job one. We had to get to the other side. But that was only just now beginning to sort of claw away out of a long stretch of relative underperformance. And it started with that. And then, of course, it culminated in some of this crazy free money stuff. But when COVID came around, that was the crisis for which I think we were the best prepared. It was one that sort of, it was like 9-11 in the sense that it took over people's psyche. It was so visceral, so real. The fear was real. And yet even at the time, I think we felt very convinced that the economic impact would be transitory. We didn't know how bad it would get, but we had a lot of conviction that we owned companies that would get to the other side. We weren't worried.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“I give myself low marks for just the way psychologically I was so disoriented in that 2008-9 period. We lived to fight another day. In many ways, one of the things that we had done in that period was we had said, look, there's a possibility that even a company like Wells Fargo could be nationalized. If they can do it to AIG, they do it to anybody. And 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 selling some wells and buying Nestle, that ensures that if the crisis gets worse, we're going to own businesses that'll get to the other side. And if the thing stabilizes, well, Nestle's going to go up a lot too. It'll just go up a lot less. So in essence, we planted the seeds of a long stretch.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“It didn't make any sense, and I couldn't. So I just kept thinking, no, it's going to be okay. It's going to be okay. And then, bam, one day we're down 90% diluted in a single day. And, of course, you couldn't recover. And by the way, what it was all fully said and done, it was probably more like 95%. And so I would say what happened in the financial crisis was so disorienting to me. I had felt we're well positioned, we're well positioned, and then, you know, it was, you know, the Tyson, you know, everybody has a plan till they get punched in the face. All of a sudden knows punched in the face and it was. And so we modeled our way through, but it...”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“You can't get a run on an insurance company. So the old saying I sort of grew up with, which shows you a very strange upbringing, was, you know, banks go illiquid before they go insolvent and insurance companies go insolvent before they go illiquid. And yet here was AIG going illiquid.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Happen at AIG was so primal for me because my grandfather had been, you know, an IPO investor in AIG. Hank Greenberg sat in our family pew at my grandfather's memorial service. I mean, that's how close we felt to that organization. His offices were in 70 Pine Street, which was the AIG building. And you had a company with a hundred billion dollars of net worth, 80 billion of tangible net worth probably had You know, it probably had seventeen or eighteen billion dollars of earnings that had nothing to do with financial markets and it couldn't go illiquid because to get your money out of an insurance company you have to die or crash or have a claim you can't just”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“No, no, I felt smug because of what we had chosen not to own as the excesses got wretched. So, you know, if you think of the six horsemen of the apocalypse in the financial crisis, Bear, Lehman, Fannie Freddie, Wamu Countrywide, We didn't own a share of any of them. And yet here I am running a financial fund, running a fund that I had 40% in financials as well. So I felt very well positioned going into that. I felt like, oh, there's excesses and we're not anywhere near them. And then the storm hits. And that was this, you know, I really felt flat-footed. And I think this is one where, I mean, I think what...”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“That was had this sort of disorienting fear. It had sort of a shockingly mild economic impact, but it was so visceral to us as individuals, and it was so visceral to us as Americans, too. The whole country was so shaken. That there you had a crisis where the economic impact and the psychological impact were sort of mirror images of each other. Well, then the funny thing is you roll into the great financial crisis. And that was the opposite. You know, what we saw in the front row of that was the whole system about to collapse.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“It, you know, all of that excess of lagging, this crazy roaring bull market, you know, it was corrected so dramatically and so quickly. And we were so well positioned for that. It wasn't like, you know, in 2000, the market went down 9%, if I remember right, maybe 9, 9 and a half. And it wasn't like managers like us who had stuck to sort of a discipline went down two and the market went down nine. It's like we were up nine or ten. You know, managers, there were managers we admire. They were up 20 or 25 with the market down 10. It was such a, so that also didn't feel scary. Now you throw 9-11 on top of that and then all of a sudden that's very visceral, right? You know, we had had offices in the trade center.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“The best stretches of his entire career starting in 75. And so, you know, obviously sort of the degree to which you're scarred in the trenches during the process. So I missed that in the late 80s. So that became very formal. And similarly, when you got to the late 90s,”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Chaos and because I remember my father and just the my father was 30% cash in 1975 and so the fund dramatically lagged in one of the best market years of a decade, 75 and market went up 30% or something like that and the fund probably went up 20 because it was a third in cash As he said, he was just beaten down He'd just been wrong day after day after day. 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% a huge loss But he had an experienced it viscerally so he just came in and he went on margin and he levered up and he probably had one of the”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“And that felt like opportunity. You know, now here it was one of the greatest commercial real estate crises. And, well, you probably have to go back to the 30s, all these looked through office buildings and the collapse of these big financial institutions, Bank of New England and things like that. But nothing about that felt scarring to me. It all felt like opportunity. But of course, it was where I was in my career. Nothing to lose. I had nothing to lose. I could come in and it reminds me of the fact that I described that 73-4.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Economic crisis that I felt aware of. It just being in this time when everything seemed to be going wrong. The sort of the chaos in the streets and the divorces and the oil embargo and the lines for gasoline. Are you an odd number plate or an even number plate and riots in Los Angeles and New York and cities on fire and the loss of American sort of preeminence and the Olympic boycott and the Soviets invade Afghanistan? And, you know, it just, it felt like it was a time where everything was sort of hanging in the balance. And as I say, it was probably through this childhood lens. And then, you know, you really fast forward to the late 80s and you had the SNL crisis. And I think because I was coming into business then,”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Where it was just calamity, you know. And I just view that as this sort of epically transcendent sort of test of the largest American crisis in my life. Now, I don't know how much that's demonstrably true and how much was looking through that lens.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT
“Every crisis is different. I mean, that is for sure. I feel like in this very vicarious way, you know, the bear market of the 70s to me felt like the big crisis. Now, I was a kid, right? So I only experienced it through my father. But somehow he had started the fund in 1968. So sort of at a high, and basically the market was back to where it was in 66 in 1981. And so to me, what happened in the 70s felt like it was the big crisis. Now, you're looking through a kid's lens, so my parents got divorced, you know, things were upended. You also had the hostage crisis. You had, you know, this crazy inflation. You had the 734 bear market.”
2024-03-05 · The Knowledge Project with Shane Parrish · Chris Davis: Three Generations of Wealth · IDENTIFIED FROM THE TRANSCRIPT