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The Knowledge Project with Shane Parrish

#189 Chris Davis: Three Generations of Wealth

Most families who obtain immense wealth squander it by the third generation. But Chris Davis comes from a family whose grandfather and father all became independently wealthy of each other, and Davis has done the same. How does that keep happening? In this conversation, we find out.

Shane and Chris discuss life and investment lessons he learned from his father and grandfather, why writing is more important to clarify one's thinking no matter who's reading it, and the surprising benefit of reading physical newspapers and wearing ties to work. Davis also shares his value-investing philosophy, what he learned from working with and meeting Charlie Munger, and what parents can do to raise kids who aren't entitled. Davis talks about his alcohol drink tracker and why it's important to him, why he never puts himself in situations where envy can grow, and the insights from Warren Buffett's key letter about why investment managers underperform.

Chris Davis is on the board of Berkshire Hathaway and The Coca-Cola Company. Davis is Chairman of Davis Selected Advisers-NY, Inc., an independent investment management firm founded in 1969. Davis joined Davis Selected Advisers-NY, Inc. in 1989 as a financial analyst, and in 1995, he became a portfolio manager of the firm’s flagship funds.

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(00:00) Intro

(03:20) Life lessons Davis learned from his grandfather and father

(26:24) The importance of writing things no one reads

(36:55) Davis' experiences through financial crises

(52:31) Why Davis loves managing a mutual fund

(55:49) Why Berkshire Hathaway operates with margin

(01:01:05) What is risk?

(01:04:02) On low interest rates and their future impact

(01:14:46) The mismatched timelines between CEOs, companies, investors, and policy

(01:22:19) How Davis and Munger met

(01:30:20) Lessons learned from Munger

(01:41:29) Why avoiding weaknesses is the ultimate recipe for success

(01:55:46) How to raise non-entitled kids and avoid lifestyle creep

(01:16:10) On happiness

(02:27:00) Good vs. bad board meetings

(02:31:34) Three generations of wealth

(02:37:15) On success

The Knowledge Project with Shane Parrish
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