Chris Davis and Robert Hagstrom on Holding Great Companies, Index Risk and Who Really Wins From AI

Two veteran value investors cap winning positions near 10% for fiduciary reasons, while debating whether AI value flows to builders or users.

• Position limits at 10%: Both Chris Davis (Davis Funds) and Robert Hagstrom (EquityCompass) cap positions near 10%, up from a traditional 5%, citing client behavior, fund regulation (FINRA), and volatility tolerance rather than conviction limits.
• Costco sale regret: Davis sold Costco around a $80 price (28x earnings) in the 1990s after Munger warned it would be a mistake; Davis underestimated store density, Kirkland Signature private-label margins, and international expansion.

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