Davis Sr: Silver Bullet Competitor Question

“One of Davis's favorite questions was: "If you had one silver bullet to shoot a competitor, which competitor would you shoot?" He'd get the answer, and make a note to research the competitor's stock. A company that was feared by its rivals must be doing something right.”

“his short career as a regulator, he'd developed a method for separating winners from losers, which he described in a speech to the Greater New York Insurance Brokers Association in 1952. The topic was "How Healthy Is Your Insurer?" but, between the lines, the audience got a tutorial in savvy stock selection.First, he crunched the numbers to find out "whether a company was making money or losing its shirt." This required a working knowledge of the accounting tricks that were in widespread use in the industry. Once he'd assured himself that a company was profitable, he turned his attention to the portfolio where the assets compounded. Here, he separated reliableassets (government bonds, mortgages, blue-chip stocks) from iffy assets. He was about to invest in an apparently attractive insurer when he noticed its portfolio was loaded with junk bonds. Later, several of these risky issues defaulted, and the…”