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Christopher Davis
Kenneth Feinberg
Davis Selected Advisers, L.P.
2949 East Elvira Road, Suite 101
Tucson, AZ 85706
Christopher C. Davis and Kenneth Feinberg are the co-portfolio managers for the segment of the Fund’s assets managed by Davis Selected Advisers, L.P. (“Davis Advisors”). Davis joined Davis Advisors in 1991, and began his tenure as a portfolio manager of the Davis New York Venture Fund in 1995. Before joining Davis Advisors, Davis was an associate at Tanaka Capital Management. Feinberg joined the firm in 1994 and was named co-manager of the Davis New York Venture Fund in 1998. Their investment approach has been strongly influenced by working closely with veteran investor Shelby Davis.
Approximately one-third of the Fund’s assets are managed by Davis and Feinberg. Through their research process Davis and Feinberg seek to identify high-quality companies with sustainable business models that can be purchased at a discount to their estimate of intrinsic value. They believe the evaluation of company management is critical, and they and their research team spend considerable time visiting managers at their places of business as part of their research process. Davis and Feinberg believe that high-quality companies are evidenced by some or all of the following characteristics:
First-Class Management
Proven track record
Significant personal ownership in business
Intelligent allocation of capital
Smart application of technology to improve business and lower costs
Strong Financial Condition and Satisfactory Profitability
Strong balance sheet
Low cost structure
High after-tax returns on capital
High quality of earnings
Strong Competitive Positioning
Non-obsolescent products / services
Dominant or growing market share
Participation in a growing market
Global presence and brand names
Davis and Feinberg seek to buy companies exhibiting some or all of these characteristics at attractive prices and then own them for the long term. Positions are built strategically when companies can be purchased at strong discounts to intrinsic value. They consider selling a position if they believe the stock market price exceeds their estimate of the intrinsic value of the company, or if they believe the risk of continuing to own a company’s stock outweighs the potential reward.
References to other mutual funds should not be deemed an offer to sell or solicitation of an offer to buy shares of such funds.
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