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The Davis Discipline: Fifty Years of Successful Investing on Wall Street
Finance Book
176 pages, Paperback
First published January 1, 2001
56 people are currently reading
959 people want to read
About the author
John Rothchild
42 books29 followersJohn Harmon Rothchild was a freelance writer specializing in financial matters. He authored or co-authored more than a dozen books on finance and investing, and served as an editor of Washington Monthly as well as a columnist for Time and Fortune.
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Displaying 1 - 30 of 32 reviews
February 26, 2015
It's a good storybook about the Davis family. The biographical content wasnt too great, and the investment/ finance related content was much below par.
They ran too diversified a portfolio, had family issues (as most families do :)) and had a fair share of adventures.
But they did have the right attitude for investing for the long term, and of course, backed it up with prudence and good work.
One may give this book a pass.
They ran too diversified a portfolio, had family issues (as most families do :)) and had a fair share of adventures.
But they did have the right attitude for investing for the long term, and of course, backed it up with prudence and good work.
One may give this book a pass.
August 24, 2025
Good biographical narrative of the Davis family but the foray into Davis’s investing techniques is rather cursory. More of a family history than an investing book.
August 22, 2012
Provides a good historical overview of the investing landscape throughout the 20th century while focusing on the disciplined approach to investing followed by the Davis family, which allowed them to build their wealth throughout the ups and downs of the markets. A central theme of the book explains why a long-term approach is often not only superior, but required in order for an investment portfolio to grow sizably (you need to be invested for the gains, but it's difficult to time the market and people often pull their money out during a downturn, thereby missing the upturn). However, the book does not go into great detail about how to perform a valuation or actually apply a value investing approach; for coverage of those subjects, old standbys like The Intelligent Investor are still the go-to resource. Still, the history laid out in the book should be required reading for anyone who is serious about long-term investing and obtaining a historical perspective on investment cycles.
August 21, 2018
What’s the difference between Warren Buffett and The Davis family? The former ́s compounding at 23 percent annually for over 50 years has brought him the kingdom and the princess many times over, while the latter’s equivalent number – spread over 60 years and three generations – merely makes them heroes of Stockpickerville. Admittedly Buffett has “done more” with his 23 percent annual clip, but as far as long duration stock picking goes, the feats are equally impressive.
“Throughout the market saga and the family saga, Davis’s stock-picking teqniques have produced many happy returns...”. The quote from Peter Lynch, writer of the foreword and a Davis-investing devotee, aptly catches the gist of this 2001 book by John Rotchild. The Davis Dynasty is as much a family chronicle as it is a 60-year investment journey. As a fellow investor, I find the fact that there is a “Davis dynasty” absolutely fascinating in the first place; the stock picking ability did not rest in one person for a very long time but in three generations for an extraordinarily long time. It is without precedent, even though the third generation has fully to prove themselves over a long-enough time-period.
For the majority of us who are familiar with the Davis family, two words immediately come to mind: insurance companies. Shelby Davis started post WWII with $50,000 from his wife’s family and ended up with a total estate worth $900mn in 1994, largely via buying and holding well-run insurance companies. The dig-where-you-stand method of investing later popularized by Lynch, has its true father in Davis. The life-long love affair with insurance stocks emanated from his five year experience as a functionary in the NY State insurance department. A “Sliding Door” observation: would the “Davis Dynasty” have happened had Shelby accepted the offer to work for the utility department in 1942? Only very late in his investment career did he branch out of insurance stocks. Up to this day, his son, also named Shelby, and the two grandsons now running the Davis Funds, have not strayed far away, mainly owning financial stocks and adjacent businesses.
John Rotchild’s novelist-type writing style – which is on full display in One Up On Wall Street which he co-authored with Peter Lynch – can also be seen here. Not many books within the business book space can be described as page-turners, but this one is. Accolades must also be handed out to Rotchild et al. for the amount of research work going into this book. Considering that Shelby Davis Sr. left no investment diaries, records or notes of any kind, countless hours must have been spent digging up numbers and events.
The weak spots in the book have more to do with the lack of detail around the handcraft and the smallish space devoted to the second generation. A substantial portion of the $900mn was gained in the latter part of Davis’s life, when he finally had handed over most investments to his son. To some extent, these two areas go hand in hand, and are only slightly improved by the last two chapters covering some of the principles behind the Davis investment philosophy. For somebody with an appetite for the Davis family ́s stock picking teqniques, I highly recommend visiting the Davis Fund’s own website.
For a contemporary set of circumstances, the read about the mid-40s “balm and sweet simplicity of no percentage interest rates” (J.M. Keynes) is very enlightening, perhaps also a ghost’s whisper of what’s to come in the 2010s. War bonds had created “a sea of money” which lenders would soon realize logically required them to demand higher interest rates, not lower. The following bond malaise is well chronicled. The challenge today as an equity investor, foreseeing a similar large scale rotation into equities? In 1946 at the trough of long term interest rates, the equity market served up 9 times earnings, 1 time BV and 5 percent dividend yield. Not exactly the valuation menu on offer today with the Dow Jones at all- time highs.
“Throughout the market saga and the family saga, Davis’s stock-picking teqniques have produced many happy returns...”. The quote from Peter Lynch, writer of the foreword and a Davis-investing devotee, aptly catches the gist of this 2001 book by John Rotchild. The Davis Dynasty is as much a family chronicle as it is a 60-year investment journey. As a fellow investor, I find the fact that there is a “Davis dynasty” absolutely fascinating in the first place; the stock picking ability did not rest in one person for a very long time but in three generations for an extraordinarily long time. It is without precedent, even though the third generation has fully to prove themselves over a long-enough time-period.
For the majority of us who are familiar with the Davis family, two words immediately come to mind: insurance companies. Shelby Davis started post WWII with $50,000 from his wife’s family and ended up with a total estate worth $900mn in 1994, largely via buying and holding well-run insurance companies. The dig-where-you-stand method of investing later popularized by Lynch, has its true father in Davis. The life-long love affair with insurance stocks emanated from his five year experience as a functionary in the NY State insurance department. A “Sliding Door” observation: would the “Davis Dynasty” have happened had Shelby accepted the offer to work for the utility department in 1942? Only very late in his investment career did he branch out of insurance stocks. Up to this day, his son, also named Shelby, and the two grandsons now running the Davis Funds, have not strayed far away, mainly owning financial stocks and adjacent businesses.
John Rotchild’s novelist-type writing style – which is on full display in One Up On Wall Street which he co-authored with Peter Lynch – can also be seen here. Not many books within the business book space can be described as page-turners, but this one is. Accolades must also be handed out to Rotchild et al. for the amount of research work going into this book. Considering that Shelby Davis Sr. left no investment diaries, records or notes of any kind, countless hours must have been spent digging up numbers and events.
The weak spots in the book have more to do with the lack of detail around the handcraft and the smallish space devoted to the second generation. A substantial portion of the $900mn was gained in the latter part of Davis’s life, when he finally had handed over most investments to his son. To some extent, these two areas go hand in hand, and are only slightly improved by the last two chapters covering some of the principles behind the Davis investment philosophy. For somebody with an appetite for the Davis family ́s stock picking teqniques, I highly recommend visiting the Davis Fund’s own website.
For a contemporary set of circumstances, the read about the mid-40s “balm and sweet simplicity of no percentage interest rates” (J.M. Keynes) is very enlightening, perhaps also a ghost’s whisper of what’s to come in the 2010s. War bonds had created “a sea of money” which lenders would soon realize logically required them to demand higher interest rates, not lower. The following bond malaise is well chronicled. The challenge today as an equity investor, foreseeing a similar large scale rotation into equities? In 1946 at the trough of long term interest rates, the equity market served up 9 times earnings, 1 time BV and 5 percent dividend yield. Not exactly the valuation menu on offer today with the Dow Jones at all- time highs.
August 26, 2022
It was better than expected and was a bit different than the standard "short biography" investment book. This book talked about all three generation of Davis's - Shelby, Shelby Jr. and Chris. Neither Shelby's were particularly good fathers - a cautionary tale. The elder Shelby Davis was very frugal, the latter loosened up a bit. The elder invested in just insurance companies using 50% leverage. His returns are outstanding. The younger Shelby and Chris's records are captures in the New York Ventures fund. Their lives are less interesting that I would have imagined, but the book was far more cautionary than I suspected and thus worthwhile. All the Davis's attended Lawrenceville and both Shelby's lived on Jupiter Island for a time. In the book, Chris appears to be the most normal, but he isn't. I can only imagine how both Shelby's were - though the elder was curiously very involved in politics.
Recommendation: Y. Liow, L. Lu
Recommendation: Y. Liow, L. Lu
September 21, 2019
The Davis Dynasty is An interesting look at an interesting investor and his seeds,without personally the subject was a sovietphile along with the late Mrs and the foundation something that im not for. The book doesn't delve into that as much even though Davis was a staunch Republican which i like. Chris sadly being a che loving mao quoting rich kid also displeases me as described in the book. The investor's belief how the new deal was hostile to business is factual and covered. His pennypinching is sickening which is also covered. AIG of course isn't so hot no more, while the stocks in insurance sound boring Mr.Davis made a fortune on it I Highly recommended reading about it despite the snide comment regarding just say no and Nancy Reagan, fascinating book nonetheless.
September 21, 2019
The Davis Dynasty is An interesting look at an interesting investor and his seeds,without personally the subject was a sovietphile along with the late Mrs and the foundation something that im not for. The book doesn't delve into that as much even though Davis was a staunch Republican which i like. Chris sadly being a che loving mao quoting rich kid also displeases me as described in the book. The investor's belief how the new deal was hostile to business is factual and covered. His pennypinching is sickening which is also covered. AIG of course isn't so hot no more, while the stocks in insurance sound boring Mr.Davis made a fortune on it I Highly recommended reading about it despite the snide comment regarding just say no and Nancy Reagan, fascinating book nonetheless.
August 17, 2025
Amazing book with what seems to be one of the few examples in history of 3+ competent generations in a row that were able to not only carry the legacy, but improve and compound on what the previous generations had done.
Interestingly, the founder was quite hard and strict on his sons and rarely let them experience the luxuries that came with an abundance of wealth. He did not want to take away the joy and reward that comes with earning that.
Highly recommend for an underrated and unrecognized family dynasty that made a huge impact. Also very interesting story of succession to three generations, and a very successful story of transition
Interestingly, the founder was quite hard and strict on his sons and rarely let them experience the luxuries that came with an abundance of wealth. He did not want to take away the joy and reward that comes with earning that.
Highly recommend for an underrated and unrecognized family dynasty that made a huge impact. Also very interesting story of succession to three generations, and a very successful story of transition
October 28, 2023
High four. Positives are the story itself, the stock moves and the investing philosophy are both intriguing and enlightening. Though of course in that specific value crowd their advise isn't that unique. Also I gotta admit that the salacious inheritance story in the middle. Slight negative is the not too interesting stories about non-investing stuff, besides the aforementioned inheritance side story. Also leaning a bit too heavily on the defense of capitalism but all right. Still a good look on both the investors specifically and the time period in general.
August 15, 2025
- “It’s better to buy wonderful business at fair price than to buy a fair business at a wonderful price”: when the market corrects, yes - there will be firms selling at an immensely attractive price (the cigar butt approach Warren Buffett used). But it’s immensely better to instead, buy companies with long term competitiveness at a fair price instead and hold it long term. You save on transaction costs, deferred tax for unrealized gains and much more
December 3, 2022
This was a very good read the shows the results of a consistent, focused, and disciplined long term strategy. The characters in this book exemplified how powerful long term compounding can be. I loved how they made each next generation earn and not inherent there success.
July 3, 2023
This is one of those books which are rarely read, mostly forgotten but contain the most juice. Reading it is like waking up one morning to find long lost Reliance shares at 200₹ purchased in 1996! Bonanza!
July 8, 2024
so fun so folksy
Pairs well with the Hank Greenberg AIG book and of course the Snowball. Couple little miscues on research I noticed esp around the Buffett/Munger history but probably was accurate for time of publication. Worth the read
Pairs well with the Hank Greenberg AIG book and of course the Snowball. Couple little miscues on research I noticed esp around the Buffett/Munger history but probably was accurate for time of publication. Worth the read
June 25, 2025
Great story and a relaxing read. A bit to much focus on the history of the familiy. Could have been more content in regards to investing, but the 10 last pages was really nice! cool also to see how every member of the familiy found their own niche where they bought stuff with the same ideology
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August 23, 2022
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June 26, 2023
Multi-faceted book with learnings from market history, family affairs, banking and insurance businesses. Shelby started at 38, yet made one of the greatest investment track records of all time.
May 11, 2024
Best part is the last chapter if you’re looking for investment advice.
January 21, 2025
A must read for all investors
Anyone who loves reading about great stock investors and history needs to read this book. Thoroughly enjoyed learning about the Davis story
Anyone who loves reading about great stock investors and history needs to read this book. Thoroughly enjoyed learning about the Davis story
October 6, 2025
I enjoyed the book. I thought the lessons were good and the story was interesting. Definitely a must read for investors that like / follow the insurance sector.
December 5, 2017
ONCE DAVIS HAD BOUGHT WINNING COMPANIES HIS BEST DECISIONS WERE NEVER TO SELL. AS LONG AS HE BELIEVED IN THE STRENGTH OF THE LEADERSHIP AND THE COMPANY'S CONTINUAL ABILITY TO COMPOUND, HE HELD.
Most, if not all, rich lister investors buy growth at modest prices, not any price.
It is unrealistic to expect companies to grow at 15% for extended periods. Most great companies cannot do it.
The top marginal tax rate increased to 56% in the US in 1932, up from 28% in 1925. Was increased to 62% in 1936. An undistributed corporate profits tax was introduced in 1937.
In 1940 the NYSE had its lowest volume since 1916.
Unanimity of opinion is a danger sign.
A bear market in bonds, which began in the late 1940s when LT treasuries were 2% lasted for 34 years.
In 1954 only 4 out of 100 American's owned shares.
A new issue craze is always the last stage of a dangerous boom.
A down market lets you buy more shares in great companies at favourable prices. If you know what you are doing you will make most of your money from these periods. You just won't realise it until much later.
At the 1974 bottom the DJ was at 6x.
Shelby shun high-priced fast growers and embraced lower priced moderate growers.
Most, if not all, rich lister investors buy growth at modest prices, not any price.
It is unrealistic to expect companies to grow at 15% for extended periods. Most great companies cannot do it.
The top marginal tax rate increased to 56% in the US in 1932, up from 28% in 1925. Was increased to 62% in 1936. An undistributed corporate profits tax was introduced in 1937.
In 1940 the NYSE had its lowest volume since 1916.
Unanimity of opinion is a danger sign.
A bear market in bonds, which began in the late 1940s when LT treasuries were 2% lasted for 34 years.
In 1954 only 4 out of 100 American's owned shares.
A new issue craze is always the last stage of a dangerous boom.
A down market lets you buy more shares in great companies at favourable prices. If you know what you are doing you will make most of your money from these periods. You just won't realise it until much later.
At the 1974 bottom the DJ was at 6x.
Shelby shun high-priced fast growers and embraced lower priced moderate growers.
July 3, 2021
This came recommended to me when researching Bill Miller’s favorite books. Being a newer investor I’m fascinated by how successful investors of the past have dealt with adversity. If you’ve studied history of markets then you know bear markets, recessions, depressions happen regularly. What separates the winners from the losers is how you react when the market is taking a dump on your portfolio.
The Davis dynasty does a pretty good job of showing what happens when you do a few key things for a long time:
1. Buy well priced assets with reasonable growth. 10-15% is all you need to build a fortune.
2. Focus on your circle of competence. Most of Davis’s big winners were in the insurance industry, where he clearly had an edge.
3. Avoid expensive bubble companies, where their price is only justified by completely unrealistic long-term growth.
4. Invest in good management.
5. Understand the company so well, you can see value that other analysts are missing.
6. Don’t sell just because of a bad quarter, year, or even few years as long as the company’s long-term outlook is still bright.
If you’re looking for a great success story and how great long-term investors think, then I highly recommend grabbing a copy of this book.
The Davis dynasty does a pretty good job of showing what happens when you do a few key things for a long time:
1. Buy well priced assets with reasonable growth. 10-15% is all you need to build a fortune.
2. Focus on your circle of competence. Most of Davis’s big winners were in the insurance industry, where he clearly had an edge.
3. Avoid expensive bubble companies, where their price is only justified by completely unrealistic long-term growth.
4. Invest in good management.
5. Understand the company so well, you can see value that other analysts are missing.
6. Don’t sell just because of a bad quarter, year, or even few years as long as the company’s long-term outlook is still bright.
If you’re looking for a great success story and how great long-term investors think, then I highly recommend grabbing a copy of this book.
June 3, 2012
3.5 Not a bad book, per se, just one that seems to want to repeatedly underscore the lesson of value investing over the long haul, while omitting (or sidestepping) elements which might have made for a more rounded, entertaining biographic read. Then again, perhaps further exploration of a stodgy, rather dysfunctional family wouldn't have served even that purpose.
April 25, 2016
It´s been over a year I read the book.
Every time I remember this story, I think Shelby Davis was a terrible guy. He probably hated his daughter.
It´s not a great investing book, nor a great bio either.
Every time I remember this story, I think Shelby Davis was a terrible guy. He probably hated his daughter.
It´s not a great investing book, nor a great bio either.
December 28, 2011
Conclusion: best way to build big family dynasty... Is to marry into a very rich family, and then not waste all the money.
October 1, 2012
Somewhat interesting, but not enough to recommend it. I wish the author had actually given more information about the son and the grandson. Those two were written in the barest of outlines.
February 12, 2013
An unintentionally uplifting condemnation of capitalism, its destructive effects on society, individuals, and hard work. A must-read.
June 12, 2013
Great historical account of the stock market interspersed with pearls of investing wisdom!
April 23, 2014
Excellent story on an obscure but extremely successful investor in insurance stocks. Davis also managed to successfully pass along his investing principles to his son and grandsons.
November 13, 2014
데이비스 가문 3대의 투자와 삶에 대한 이야기를 담담하게 그려냈다. 사실 투자철학 부분은 특별할 것은 없다. 투자 노하우를 얻고자 했던 이들은 실망할 수도 있을 듯 하다. 이 책의 가치는 대공황 이후의 미국 자본 시장의 역사를 생생하게 그려놓은 것이라 생각한다. 수많은 강세장과 약세장을 통해서 변하지 않는 자본 시장의 속성에 대해서 배우게 되는 듯 하다.
Displaying 1 - 30 of 32 reviews