Davis ETFs’ Chris Davis on Trust: The Investor’s Ultimate Superpower

Why It Matters

Because trust-driven relationships and disciplined judgment differentiate active managers who can generate alpha in volatile markets, investors and advisors who embed these principles are better positioned to protect and grow client capital.

Key Takeaways

• Trust is essential for active management during volatile periods.
• Deep relationships with company leadership yield superior investment insights.
• Active managers must balance conviction with disciplined exit strategies.
• AI should augment, not replace, human judgment in stock analysis.
• Hiring focuses on curiosity and rigorous, hands‑on research training.

Summary

In a recent interview, Chris Davis, co‑founder of Davis Advisors, framed trust as the ultimate superpower for investors, especially those employing active management. He contrasted the handshake deals at Berkshire Hathaway with the “trustless” environment many advisors face today, arguing that long‑term conviction hinges on reliable relationships.

Davis emphasized that deep, ongoing dialogue with company leadership provides insights no model can capture, allowing managers to stay invested through short‑term underperformance and to recognize when to exit. He illustrated how volatility favors active managers who can leverage trust to add positions, citing Applied Materials as a case where a long‑standing relationship enabled a timely purchase at a third of its prior price.

Memorable anecdotes included Warren Buffett’s coin‑toss bet, underscoring disciplined sizing, and Davis’s internal “mistake wall” that displays past errors with lessons learned. He also described a rigorous hiring test: candidates spend four hours dissecting three years of 10‑Ks without internet, revealing curiosity and analytical mindset over rote answers.

The discussion signals that advisors must cultivate trust—not only with clients but also with portfolio companies—to justify active fees and navigate market turbulence. Moreover, Davis warns that AI should serve as a data‑magnifier for human judgment rather than a replacement, and that firms should prioritize curiosity‑driven talent to sustain long‑term performance.

Original Description

ETF.com’s Dave Nadig, President & Director of Research, sat down with Chris Davis, Portfolio Manager at Davis ETFs while at Future Proof Citywide 2026. Their conversation spanned everything from building trust as long-term investors to what qualities Davis values highly as an active manager.

Highlights include:

1. Trust as a Superpower. Trust allows for both long-term conviction and rapid, handshake-based deals. In a mechanical investment world, this human element plays an integral role, particularly through the inevitable periods of volatility.

2. Davis ETFs pursues deep, multilayer levels of knowledge about companies. It’s a relationship-driven approach that helps them distinguish between temporary market dips and more fundamental valuation challenges.

3. Chris Davis explores how the firm thinks about AI as a powerful potential magnifier of both human talent and data processing as opposed to a replacement for either.

4. Davis also discusses the ethos of the firm, including its Wall of Mistakes, as well as the qualities they value in candidates, and why both matter for better business.

5. The discussion wraps on Davis’s approach to co-investing, and the importance of maintaining optimism about humanity’s cooperation capabilities for long-term investing.

You can watch the discussion alongside a full transcript here: https://www.etf.com/sections/conferences/chris-davis-trust-investors-ultimate-superpower

And to learn more about Davis ETFs, go to: https://www.davisetfs.com/