Growing Rich - Arabictrader.com

KIRK KAZANJIAN
stocks, since it could make them a lot of money. At the least, they
would know how to respond to a money manager who was trying to
advise them on their stock portfolio.”
ANDREW DAVIS
Andrew, 36, is president of Davis Selected Advisers and manages
the company’s real estate and convertible securities funds. “Andrew
came out of Colby College and got a job at Shawmut Bank, which
was in the mutual fund business,” Davis says. “He moved to New
York a year later and became an analyst at Paine Webber. He worked
under Peter Marcus, who has been around a long time and was the
dean of steel and metal analysts on Wall Street. Peter used to hire
apprentices to do his spreadsheets. He was very analytical. He had
reams of data on each mill. I knew Peter would be a very quantitative
and traditional analyst, so Andrew would really get to learn about a
company and understand that earnings don’t just magically appear.
Peter taught Andrew to pay attention to details such as: What are the
gross margins? How do you come to that gross margin? What are the
variables? What are the fuel costs? What are the labor costs? What’s
the transportation advantage or disadvantage the company has versus
its competitors? What does it cost per dollar of sales in capital to
build new plants? Sure enough, within a year, Andrew was promoted
to analyst of a full-fledged group that followed closed-end bond
funds.”
Andrew was promoted again to head of the convertible-bond research
department. “When an analyst liked a company, if it had a
convertible, Andrew would see if that was an intriguing way to own
the common, with less upside, but also less downside,” Davis adds.
“Andrew gravitated toward this risk-reward trade-off idea right away.
He developed a whole computer system to rank convertible bonds,
which Paine Webber still uses. When I wanted to start a convertible
bond fund in 1992, I enticed him to come work for me, since I felt
he was the ideal person to run it.”
Davis also liked Andrew’s brokerage experience, since his Davis
family of funds are load offerings sold through broker-dealers. “I
knew our president Martin Proyect was going to retire, and Andrew
spoke the broker language,” he says. “Brokers are our primary sales
136