What Buffett Taught Us About Managing Client Capital

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Chris Davis:

December 31st, 2025 marked the end of a profound era in U.S. business history, when Warren Buffett retired as CEO of Berkshire Hathaway, a company he had run for more than five decades.

And I just wanted to take a moment to reflect on his impact and how it's influenced me personally and really the development of our firm over the decades that I've been lucky enough to know and study Warren.

Now, beyond the track record of results, I mean, without question Warren, the greatest investor of the last century, one of the greatest CEOs, and one of the greatest exemplars of the best of capitalism, the best of the US business model.

But I also want to talk about his influence in terms of what it means to be a steward of the savings of others.

And what I mean by that is that Warren, from the very beginning, ran Berkshire Hathaway, this enormous industrial conglomerate with the mindset of a partnership.

What that meant is he viewed his responsibility as a responsibility of the life savings of his shareholders. That was a mindset he brought over from when he had started as an investment partnership.

That meant that he has this incredibly broad way of thinking about risk. And I would say, at Davis, these are the sorts of ideas that we've tried to incorporate.

This idea of being a fiduciary, being a steward of the life savings of our clients, of thinking about risk, not just about return, of thinking about being able to withstand the unexpected but inevitable shocks and disruptions and dislocations in markets, in the economy and geopolitics.

Another important mindset that I think characterized his leadership over those decades was a willingness to look different, to be out of sync with the market.

You think about the times over Berkshire's history where people would say, oh, he's a Dinosaur, he's lost the thread, he doesn't understand whatever the current fad was.

But that willingness to be out of sync is an important characteristic. And one that we also have to shoulder here as long-term value investors, particularly when Markets are in a go-go period.

And that gets to another characteristic, which is patience and that very long-term orientation. You get that as an owner-operator, you know?

So it's often said that a good farmer farms for his children, right? It's that mindset of stewardship and a long-term orientation.

And finally, I think any mention of Warren's tremendous legacy would be missing something if it didn't highlight his role as an exemplar, his absolute determination to communicate with his clients and with shareholders in a way that was humble, transparent, candid, that focuses on mistakes, not just on successes, and really helps to educate and share wisdom with his partners. Well, that's been a bedrock of our investment approach and in the partnership that we've built over the years with our shareholders and with their advisors.

So thank you for giving me a chance to reflect.

And, you know, Warren is still chairman and Warren is, thank God, still available to teach and educate, not just us, but the public and his shareholders, but I didn't want to let the moment pass without reflecting on the enormous legacy and the enormous debt of gratitude that we owe.

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