As active investors for over 60 years, the Davis family has cultivated an uncommon wisdom about recurring market trends and patterns. Our firm has identified several reasons why durable companies with strong growth prospects may fall in price and become "misvalued":

• An industry crisis may create tremendous opportunity if the market does not distinguish between companies that might fail and those that might actually get stronger;*
• Broad demographic shifts can dramatically alter demand trends of an industry;
• Changes in management may significantly alter the growth prospects of a business;
• Positive change or secular recovery after a prolonged downturn is often slow to gain market recognition;
• Changes in Wall Street analyst recommendations cause short-term volatility in stock prices, creating buying or selling opportunities;
• Expansion of U.S. capitalism overseas has opened new markets to companies that were perceived as fully mature, often warranting new valuations.