Asks about Japan's market performance and new Prime Minister's impact.
Scarlet Fu
Chris Davis
Japan's recovery shows active management adds value when indexes go nowhere; it was a stockpicker's market for 30 years.
Questions if international outperformance is real or a head-fake, and if US could enter a prolonged underperformance period.
Eric Balchunas
Chris Davis
Believes in international allocation; there are stretches where it outperforms US, but people have forgotten. Investing internationally is 'art of the specific' - would not index due to overexposure to formerly nationalized enterprises.
Asks what constitutes value investing in current US market.
Scarlet Fu
Chris Davis
Value investing is making a comeback; early stages of recovery. His value ETF outperforms S&P and crushes value indexes.
Notes Davis's portfolio is overweight financials, underweight tech; asks bull case for financials given cost compression and potential rate cuts.
Eric Balchunas
Chris Davis
Financials are the blue-chip dividend darlings of next decade; became safer post-financial crisis but nobody believed it. High-quality financials have weathered multiple crises, pay great dividends with low payout ratios.
Asks about AI impact on financials sector, referencing report about potential job displacement.
Eric Balchunas
Chris Davis
Financials will be enormous beneficiaries of AI due to open cost structure; cites Capital One as top fintech company with AI patents, trading at 12-13x earnings.
Asks about Berkshire Hathaway board's role in protecting culture post-Buffett.
Scarlet Fu
Chris Davis
Long-lived assets and strong cultures matter more than naming second CEO; cites Standard Oil, Apple, Amazon examples.