His focus is on finding firms with predictable earnings whose stocks are trading at reasonable prices. Earnings and prices haven't been on many investors' short lists over the past few years. Rather, the stellar performance of tech issues overshadowed the types of stocks in which Buffett invests. The Wisdom Fund is like a Buffett index fund. Davenport tries to mirror the holdings of Bekshire Hathaway, Buffett's publicly traded investment company.
Berkshire stock is also overpriced relative to the companies that it owns.
Davenport believes investors bid up the price because of Buffett's aura and excellent track record. He launched the fund so investors could invest in Buffett companies without paying the Buffett premium. Many index-funds have trouble matching the performance of the index they are trying to match. Davenport has his work cut out for him trying to mirror Berkshire Hathaway. Standing in his way are BRK's privately held investments and timing issues.