Successfully navigating uncertain markets requires separating market psychology from business fundamentals, maintaining a long-term perspective, and keeping emotions in check.
In the upcoming webcast, Navigating Today’s Uncertain Market: Opportunities, Risks & Keeping Emotions in Check, Chris Davis, Portfolio Manager and Chairman, Davis Advisors, will draw on Davis’ 50 years of investing to discuss the current investment landscape, where opportunities exist for long-term investors and the risks they should focus on today.
For example, investors have looked to a time-tested active approach to potentially enhance returns and provide greater stability, especially in times of heightened volatility. For example, the actively managed Davis Select U.S. Equity ETF (NasdaqGM: DUSA), Davis Select Financial ETF (NasdaqGM: DFNL), Davis Select International ETF (NasdaqGM: DINT) and Davis Select Worldwide ETF (NasdaqGM: DWLD) are backed by Davis Advisors’ focuses on long-term opportunities and incorporate the money manager’s judgment experience, high conviction, low turnover, accountability, and alignment. The Davis team screens for fundamental characteristics, including cash flows assets and liabilities, and other criteria.
The management team looks to durability, adaptability, and resiliency of a company for substantial competitive advantages, superior business models, attractive financials, and superior free cash flows. They also select those with proven, capable management with a track record of good decisions, intelligent capital allocators, and alignment of interests. Additionally, the team focuses on discount to real value by calculating owner earnings to arrive at the actual value of a company.
Davis Advisors’ management style primarily targets durable businesses with above-average margin returns, strong competitive advantages, and durability. Companies also have to show strong management that has been in place for over five years as long-term investors can be sure that these are ethical, honest people that will help the business last. The management team will determine valuation or what’s the right price of the company, targeting long-term free cash flow of businesses, owner earnings, and how durable the cash is available.
Active managers are also able to exploit market inefficiencies through time arbitrage; intangibles such as management, capital allocation or competitive moats; sector inefficiencies, accounting arbitrage; business bias versus profession; and geographic inefficiencies, like knowledge of foreign markets.
Financial advisors who are interested in learning more about active strategies for today’s markets can register for the Tuesday, April 28, webcast here.