Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
A YOUNG PRODIGY
Davis didn’t get to cover insurance stocks at the Bank of New York,
though he continued to watch them on the side. “When I was promoted,
I began following the oil industry,” he says. “That was one of
the bank’s biggest groups for its trust accounts. Everybody owned a
lot of oil stocks in those days. The Seven Sisters experienced phenomenal
growth. I also did work with chemical companies, plus the wood
products and building industry, and a few banks as well.” After seven
years, at the age of 28, he became the bank’s youngest vice president
since its founder Alexander Hamilton, who had served as U.S. treasury
secretary under George Washington. Davis was later named head of
equity research.
After this coveted promotion, Davis was told that if he stuck around
for another 30 years, he would probably become president of the
bank. “I started to look closer at what the president did and decided
I didn’t want his job,” Davis reveals. “I didn’t like what he did. He
went to a lot of official functions, luncheons, and dinners. He visited
the bank’s current clients and was always prospecting for new ones.
His job was vital, but it wasn’t the same as visiting companies and
trying to make money in stocks. He was ‘Mr. Outside.’ I liked making
investment decisions on the inside. I’d rather visit companies than
clients.”
ON HIS OWN
One of the portfolio managers Davis worked with at the bank was
Guy Palmer. In 1967, after Davis decided he had gone as far as he
wanted to at the bank, he teamed up with Palmer to start an investment
firm. They named it Davis, Palmer and Company. Two years
later, they enticed Jeremy Biggs, a manager of the $1 billion U.S.
Steel pension fund, to join them. Davis had worked for Biggs’s father,
whom he considered his mentor, at the Bank of New York. “His dad,
William R. Biggs, was vice chairman and chief investment officer of
the Bank of New York,” Davis notes. “That’s how Jeremy and I met.
When Jeremy came aboard in 1969, the Dow stood at 800 and our
firm was renamed Davis, Palmer and Biggs.”
That same year, the partners were hired by the investment firm
Calvin Bullock Limited to act as subadviser to a new mutual fund it
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