Growing Rich - Arabictrader.com

Rule 5
GET TO KNOW YOUR
PARTNERS
Although he was born in Philadelphia, Shelby Davis spent most of
his early years in Tarrytown, New York. Even as a young lad, he remembers
going around with his father, a well-known Wall Street insurance
analyst, to visit potential investments. His dad turned
$100,000 into $800 million by investing in a portfolio of carefully
selected insurance stocks. Before buying shares in a company, Davis’s
father believed it was essential to meet with management, the people
he referred to as his “partners.”
“I loved tagging along with him for these inspections,” Davis reflects.
“The first visit I remember was in June 1950, right after Truman
declared war on Korea. My mom, dad, sister, and I were driving to
the Midwest for our summer vacation and dad decided to mix business
with pleasure by going to visit some insurance companies. We went
to places like Springfield, Illinois, home of Franklin Life, and Fort
Wayne, Indiana, where Lincoln National was headquartered. Early
on, dad taught me that you should do your own research. That means
going to visit companies yourself and meeting with top management.
“While we were in the car, we heard that North Korea had invaded
South Korea and President Truman’s response was to declare war. He
made a dramatic speech, and the stock market cracked badly,” Davis
continues. “My dad had just started his own investment firm about
a year earlier. He said, ‘Out of crisis comes opportunity if you know
what you’re doing.’ He was right. It turned out to be a great buying
opportunity, because once the war got underway, the stock market
took off. Dad often pointed out that you make most of your money
in a bear market. You just don’t realize it at the time. It causes you
to make the tough decision of whether to hold or buy more shares.”
Davis went along with his father to query executives at both