Capital One (COF) (the Fund's largest position at 4.0%) is a consumer finance firm with credit card, auto lending, and banking businesses. The company has a strong franchise, attractive growth opportunities, and a disciplined management team with a solid track record and long-term focus. Capital One has grown market share while achieving high return on equity through its data analytics, which have led to sophisticated marketing and strong underwriting. Its acquisitions of ING Direct and HSBC's credit card portfolio appear to be strategically sound. While regulatory reform could force changes in business practices that could adversely affect the industry, we believe Capital One— trading at 11 times forward earnings—is an attractive long-term investment opportunity.
From Dodge & Cox's Stock Fund fourth quarter 2013 commentary.