What You Can Expect from Me:

David Jesse Kim, Managing Partner

“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.”
— Warren Buffett

At David Funds LP, my investment approach revolves around one core principle: preserving capital. My primary responsibility is avoiding permanent capital loss. This means not chasing trends, guessing short-term market movements, or emotionally reacting to market noise.

However, short-term losses are inevitable. Despite consistently market-beating returns over the past two and a half years, my portfolio experienced multiple drawdowns exceeding 20 percent. Yet volatility, ultimately, is a friend.

“Other people doing dumb things is what creates good opportunities.”
— Warren Buffett

Opportunities arise from others' speculation, panic, or emotional overreactions when buying or selling. My role is to carefully evaluate these moments and act decisively when prices significantly deviate from intrinsic value.

Today’s markets are driven by excitement—fast trades, meme stocks, algorithmic signals, and social media-driven narratives. At David Funds, I take the opposite path, aiming to profit from others' chaos—misjudgments, emotional decisions, and speculation—by remaining rational, independent, and focused on long-term, value-driven decisions.

“All investing is value investing, and if it isn’t, it’s gambling or speculating.”
— Chris Davis, Bloomberg interview, 4/2/25, released 7/30/25

A major way to profit from investing is capitalizing on behaviors of investors unable to distinguish gambling from true investing. Too many investors trade based on dopamine-driven decisions.

Understanding stocks as partial ownership in businesses is fundamental. When investing, I view myself as acquiring ownership stakes in enterprises. This perspective allows me to thoroughly assess and appreciate a company’s long-term intrinsic value, thereby avoiding irrational speculation. In future investor letters, I will elaborate further on corporate governance and its impact on specific markets.

• Long-term, value-based approach: Focusing on compounding capital over years, not quarters.
  
  

• Concentrated portfolio: Owning only investments I deeply understand and believe are undervalued.
  
  

• Skin in the game: My capital committed alongside yours.
  
  

• Low activity, high conviction: Doing more by doing less, when it matters.
  
  

• Clear communication: No jargon, no fluff—just transparency and logic.
  
  

Guidance: Learning from the Best

As you may have guessed, “a big part of my education as an investor came from reading everything Buffett’s written.” Buffett himself has stated that, above all, he wishes to be remembered as a teacher. Like many investors, past and present, I've built my investing foundation from the greatest investor of all time. Although I could write extensively about Mr. Buffett’s exceptional qualities, my point is simple: every day, I strive to be more like the Oracle of Omaha—I aim to be 100% Buffett.

I supplement Buffett’s principles with insights from other great investors and financiers. My bedside reading and audio playlist frequently feature Charlie Munger, Peter Lynch, Stanley Druckenmiller, Howard Marks, Seth Klarman, Bill Ackman, Mohnish Pabrai, Li Lu,  Jamie Dimon, Joel Greenblatt, and many others.

Great Investments

Before I define what makes a great investment, let me show you my greatest mistakes.

Meta Platforms  (2022): 

Before defining what makes a great investment, let me first show you my greatest mistakes. Meta Platforms Inc. (2022): Formerly known as Facebook, Meta Platforms was down more than 75% from its highs at one point. Around this time, it caught my inexperienced attention, trading at about 13 times earnings—meaning the total market capitalization could be recouped in 13 years based on recent earnings. Reviewing a few financial metrics, it was clear the depressed earnings were temporary. Cash flow statements showed the business consistently generating cash comparable to previous periods, with losses primarily tied to a one-time bad acquisition of a VR company. Combined with one of the worst years for tech in recent history, Meta represented an obvious opportunity. The business itself remained outstanding and uncompromised, despite slowing user growth rates. The Moat: Meta holds a durable advantage through efficient advertising revenues and will continue to command the attention of much of the developed world for the foreseeable future.


Coinbase (2023):

This crypto platform was down over 90% from its speculative 2021 highs and did not display the clear earnings and financial indicators that Meta did (trading at around 30 times earnings). Nonetheless, a review of the income statement, balance sheet, and cash flow statements indicated a profitable trajectory. Once consistently profitable, the growth potential became obvious. The Moat: Coinbase possesses the unique durability of being a global leader among crypto exchanges, benefiting significantly from rising interest and crypto prices, particularly prior to industry deregulation. These examples are simplified and mostly from memory, but the clear indicators of extreme profitability, durability, and understandable economics highlight what constitutes great investments. Here is one great investment that I actually made:

The examples above are simplified and mostly from memory, but the clear indicators of extreme profitability, durability, and understandable economics highlight what constitutes great investments. Here is one great investment that I actually made:

Uber (2023, 2024): 

Uber is dear to my heart—I often joke that my profits from Uber will cover rides for the rest of my life.

The Moat: Uber commands approximately one-seventh of all rideshare volume in the United States and remains competitive in both rideshare and traditional taxi markets globally. Additionally, the company benefits from vertical revenue streams like Uber Cargo and Uber Eats. Uber's economic efficiency is notable—it neither owns vehicles nor includes driver or carrier payments in its revenue calculation.

I began buying Uber around $28 per share, at roughly a $60 billion valuation, and continued buying to achieve a dollar-cost average of around $35 when the stock reached about $75 in early 2024. My rationale estimated the business's intrinsic value at around $200 billion (approximately $100 per share) within five years, based on growth projections, competent leadership, improving financial health, comparisons with taxi companies, and expansion in non-rideshare segments. Despite rapid price appreciation, I mistakenly did not sell enough shares when better opportunities arose. Nevertheless, Uber's business fundamentals continued improving, even though the stock price did not reflect this. In December 2024, an exceptional opportunity arose to buy Uber at a massive margin of safety at $60 per share relative to my intrinsic valuation. By July 2025, the stock traded around $90 per share.