Lead-Lag Live Research & Selectivity: Davis Advisors Market Outlook & Active ETFs
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Jan 12, 2026 Dodd Kittsley, Co-CIO of Davis Advisors, shares insights from his extensive career in active equity investing. He explains the importance of fundamental research and selectivity as markets transition to normalized interest rates. Dodd discusses the evolution of active equity ETFs, emphasizing a high-conviction, benchmark-agnostic approach. He highlights the significance of what investors don't own, the impact of 'picks and mortars' technology on financials, and the advantages of long-term, owner-operator investments.
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Provide Choice With ETF Wrappers
- Offer proven strategies in ETF wrappers when advisors request them to provide choice and tax efficiency.
- Use limit orders and avoid buying at the open or close to ensure tight spreads and better execution.
Two Questions That Drive Research
- Ask two core questions: what businesses to own and what to pay for them to drive investment decisions.
- Focus on high-quality, durable-moat businesses with sustainable earnings and strong management.
Value As Buying Businesses, Not Cheap Stocks
- Davis positions itself in relative-value large-cap by buying great businesses at fair prices rather than cheap impaired ones.
- The firm treats each stock like buying the whole business, favoring long holding periods and low turnover.