We discuss the firm’s early days, when it was running separately managed accounts (SMAs) in 1969, and moved into mutual funds after being asked to by several clients. Four decades later, similar requests from client led them into ETFs. The firm’s main strategies included Concentrated US, International, Global, and Financials funds.
Davis notes that most value investors are too narrow in how they consider the issue of price and value. He uses Google as an example. When they first began using the search company for client acquisitions, it cost GEICO about $2 per new lead via Google. The next nearest customer acquisition vehicle was late-night cable television, at a cost of $30 per client. That enormous differential explained why Google was poised to take so much market share in advertising from everyone else. It also suggest that it was less expensive on a valuation basis than the traditional P/E ratio implied.