WWII 030: Shelby Davis The Man Who Grew $50,000 into $900,000,000 Over Fifty Years, Labor Market Strength, Start Up Investing

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This episode is about Shelby Davis Sr., the man who turned a fifty-thousand stake into a nine hundred million dollar fortune. He is a great case study for long-term investing, and was highly concentrated in the insurance industry, and industry that he worked in until going out on his own.

Main Topic: Shelby Davis, the Insurance Stock Picker

· Background: was freelance writer, GOP campaign adviser, and Dilbert (from the cartoon) in the New York State Insurance Department.

· In 1947, at age 38 years old, no MBA, no formal economics training, quit his job to become a full time stock prospector in the insurance sector.

· For the next 45 years, he stuck with primarily insurance stocks through thick and thin and multiplied his stake by 18,000 times.

· What could be more inspiring than a middle aged man and became a near billionaire in his lifetime, all from investing, not from raking fees from others. (rant about hedge fund billionaires vs. these types)

· Shelby Davis as little known outside of insurance circles.

· Shelby made the list of the wealthiest Americans in Forbes in 1988 and this was his first real exposure, his 15 minutes of fame.

· Shelby was a passive investor, and stock picker.

· Shelby had a lot in common with Warren Buffett, operating during similar decades, preferring insurance stocks, both notorious tightwads.

· Both continued to live in modest houses even when their fortunes entered seven, eight, and nine figures.

· The author writes: “By keeping his wallet zipped, Davis maximized the capital he then invested for maximum return. He disapproved of excessive corporate spending as much as he disapproved of excessive household spending and he tended to buy companies whose managers were as frugal with their investor’s dollars as he was with family dollars.”

· Davis taught his entire family his same frugal ways. He acceded to the families request for a swimming pool in their backyard, but only if they dug the hole.

· Shelby Davis senior died in 1994, leaving no paper trail, no journals or diaries, and never bothered to keep backups of his weekly insurance newsletter.

· Inner-most thoughts, such as “buy 100 shares Chubb” were scribbled on old envelopes or ticket stubs, to avoid wasting money on note pads.

· Davis chose to invest in what he called “compounding machines”.

· This man is study of long term investing. Not quarters or years, but decades holding

Use it up, wear it out, make due, or do without!"

Shelby Davis
Investor

Ask JB: Investing in Start Ups and How Will Bond Funds Perform with Rising Interest Rates?

A little advice needed here. Looking to invest in start ups for potential high gains. (self.investing_discussion)

submitted 1 month ago by dbelov275

Hello guys, I am a stock trader but I have been thinking to start investing in startups for potential high gains. What do you think I should check out and hat exactly do I need to know?

How bonds would perform in case of a US rate increasing by the end of 2016 (self.investing_discussion)

submitted 1 month ago by cjjjune617

Hello guys,

I have about 28% bond etf in my portfolio and this is how it looks like currently:

US Gov long & mid term bond etf: 3.7% (mainly long-term) US Corporate bond etf: 6.3% (mainly long-term) US municipal bond etf: 2.2% US high yield bond etf: 2.6% (mainly 0-5 years) US total bond etf: 4.5%

UK Gov bond etf: 2.8% UK corporate bond etf: 6.4%

I wonder what could happen to my bond eft in case of the US rate increase which is likely to happen in the end of this year.

Thank you so much!

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News: Labor Market is Strong and Could Overshoot, and Avocado Prices Should Normalize

The U.S appears to have reached full employment and there is upwards pressure on wages. The Fed may decide to run the economy "hot" in order to jump start it.

This article is a great study in micro economics for a fruit (yes avocado's are fruit not vegetables). Avocado supply was cut off by a strike by avocado workers in Mexico, leading to a shortage of the fatty fruit. The strike has been resolved and avocado prices should normalize.

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Thoughts on this podcast? Disagree with me on some point? Something I missed? Leave a comment!

About the Author

Jeremy Scott Bailey is an investor, author, entrepreneur and host of the "What Works In Investing?" podcast now available on iTunes. He is founder and Chief Investment Officer of Burgeón Group, Inc. an investment advisory firm that provides portfolio management services to families and individuals.

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