Selected American Shares Inc. Class S (SLASX) N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANANGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-00051

SELECTED AMERICAN SHARES, INC.

(Exact name of registrant as specified in charter)

2949 East Elvira Road, Suite 101

Tucson, AZ 85756

(Address of principal executive offices)

Thomas D. Tays

Davis Selected Advisers, L.P.

2949 East Elvira Road, Suite 101

Tucson, AZ 85756

(Name and address of agent for service)

Registrant’s telephone number, including area code: 520-806-7600

Date of fiscal year end: December 31, 2008

Date of reporting period: June 30, 2008

____________________

ITEM 1. REPORT TO STOCKHOLDERS

Table of Contents

Shareholder Letter	2
Management's Discussion and Analysis:
Selected American Shares	3
Selected Special Shares	4
Fund Overview:
Selected American Shares	7
Selected Special Shares	8
Selected Daily Government Fund	9
Expense Example	10
Schedule of Investments:
Selected American Shares	12
Selected Special Shares	19
Selected Daily Government Fund	25
Statements of Assets and Liabilities	29
Statements of Operations	31
Statements of Changes in Net Assets	32
Notes to Financial Statements	34
Financial Highlights	43
Fund Information	47
Director Approval of Advisory Agreements	48
Directors and Officers	52

SELECTED FUNDS

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

Dear Fellow Shareholder,

As stewards of our customers’ savings, the management team and Directors of the Selected Funds recognize the importance of candid, thorough, and regular communication with our shareholders. In our Annual and Semi-Annual Reports, we include all of the required quantitative information, such as financial statements, detailed footnotes, performance reports, fund holdings, and performance attribution.

In addition, we produce a Research Report for certain funds, which is published semi-annually. In this report, we give a more qualitative perspective on fund performance, discuss our thoughts on individual holdings, and share our investment outlook. You may obtain a copy of the current Research Report either on our website, SelectedFunds.com, or by calling 1-800-243-1575.

We thank you for your continued trust. We will do our best to earn it in the years ahead.

Sincerely,

James J. McMonagle	Christopher C. Davis	Kenneth C. Feinberg
Chairman	President & Portfolio Manager	Portfolio Manager

August 8, 2008

2

SELECTED FUNDS

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

Management’s Discussion and Analysis

Selected American Shares

Performance Overview

Selected American Shares’ Class S shares delivered a negative return on net asset value of 11.22% (Class D shares returned negative 11.09%) for the six-month period ended June 30, 2008¹. Over the same time period, the Standard & Poor’s 500^® Index² (“Index”) declined by 11.91%. Energy and materials were the only sectors³ within the Index that earned positive returns, with all other sectors, and especially financials, turning in negative returns.

Key Contributors to Performance

Energy companies were the most important contributors⁴ to the Fund’s performance over the six-month period. The Fund’s energy companies out-performed the corresponding sector within the Index (up 19% versus up 9% for the Index) and the Fund also benefited from a higher relative average weighting in this sector (17% versus 14% for the Index). ConocoPhillips⁵, Occidental Petroleum, Devon Energy, EOG Resources, and Canadian Natural Resources were among the top contributors to performance. China Coal Energy was among the top detractors from performance.

The Fund managers have identified a number of investment opportunities in foreign companies. The Fund ended the period with approximately 14% of its assets invested in foreign companies. As a group, the foreign companies owned by the Fund declined in value, but still out-performed the Index over the period.

Key Detractors from Performance

The Fund’s financial companies out-performed the corresponding sector within the Index (down 24% versus down 30% for the Index), but were still the largest detractors from performance. A higher relative average weighting in this sector (33% versus 17% for the Index) detracted from both absolute and relative performance. While Millea Holdings (changed name to Tokio Marine Holdings in July 2008) and Visa were among the top contributors to performance, American International Group, Wachovia, American Express, Berkshire Hathaway, JPMorgan Chase, and Merrill Lynch were among the top detractors from performance.

The Fund’s information technology companies under-performed the corresponding sector within the Index (down 17% versus down 13% for the Index). Iron Mountain and Microsoft were among the top detractors from performance.

3

SELECTED FUNDS

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

Management’s Discussion and Analysis – (Continued)

Selected Special Shares

Performance Overview

Selected Special Shares’ Class S shares delivered a negative return on net asset value of 16.91% (Class D shares returned negative 16.83%) for the six-month period ended June 30, 2008¹. Over the same time period, the Russell 3000^® Index² (“Index”) decreased by 11.05%. Energy and materials were the only sectors³ within the Index that earned positive returns, with all other sectors, and especially financials, turning in negative returns.

Key Contributors to Performance

Energy companies were the most important contributors⁴ to the Fund’s performance over the six-month period. The Fund’s energy companies out-performed the corresponding sector within the Index (up 23% versus up 13% for the Index). The Fund’s relative performance was reduced by a lower relative average weighting in this sector (4% versus 13% for the Index). Tenaris⁵and Transocean were among the top contributors to performance.

The Fund managers have identified a number of investment opportunities in foreign companies. The Fund ended the period with approximately 19% of its assets invested in foreign companies. As a group, the foreign companies owned by the Fund declined in value, but still out-performed the Index over the period.

Key Detractors from Performance

The most important detractors from performance over the six-month period were the Fund’s holdings in the consumer discretionary and financial sectors.

While the Fund’s consumer discretionary companies performed in-line with the corresponding sector within the Index (both the Fund and the Index were down 16%), the Fund’s performance was harmed by a higher average weighting in this poorly performing sector (33% versus 10% for the Index). While Netflix, H&R Block, Comcast, and Lowe’s were among the top contributors to performance, Garmin, CarMax, and WPP Group were among the top detractors from performance. The Fund no longer owns Lowe’s.

The financial sector was the worst performing sector of the Index. The Fund’s financial companies under-performed the corresponding sector within the Index (down 28% versus down 27% for the Index), and the Fund had a higher average weighting in this poorly performing sector (20% versus 17% for the Index). While Pargesa was among the top contributors to performance, Ambac Financial, Markel, Redwood Trust, and Power Corp. of Canada were among the top detractors from performance.

Other individual companies detracting from performance included UnitedHealth Group and Google.

4

SELECTED FUNDS

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

Management’s Discussion and Analysis – (Continued)

This Semi-Annual Report is authorized for use by existing shareholders. Prospective shareholders must receive a current Selected Funds prospectus, which contains more information about investment strategies, risks, fees, and expenses. Please read the prospectus carefully before investing or sending money.

Selected American Shares’ investment objective is to achieve both capital growth and income. In the current market environment, we expect that income will be low. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Selected American Shares are: (1) market risk, (2) company risk, (3) foreign country risk, (4) financial services risk, (5) headline risk, and (6) selection risk. See the prospectus for a full description of each risk.

Selected Special Shares’ investment objective is capital growth. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Selected Special Shares are: (1) market risk, (2) company risk, (3) small and medium capitalization risk, (4) foreign country risk, (5) headline risk, and (6) selection risk. See the prospectus for a full description of each risk.

¹     Total return assumes reinvestment of dividends and capital gain distributions. Past performance is not a guarantee of future results. Investment return and principal value will vary so that, when redeemed, an investor’s shares may be worth more or less than when purchased. The following tables list the average annual total returns for the periods ended June 30, 2008 and the annualized operating gross expense ratios for the six-month period ended June 30, 2008.

Fund Name	1-Year	5-Year	10-Year	Expense Ratio
Selected American Shares S	(13.22)%	9.11%	5.71%	0.90%
Selected Special Shares S	(23.14)%	7.15%	3.48%	1.19%

Fund Name	1-Year	3-Year	Inception (May 3, 2004)	Expense Ratio
Selected American Shares D	(12.95)%	5.45%	6.48%	0.58%
Selected Special Shares D	(22.92)%	1.48%	3.52%	0.83%

Benchmark Index	1-Year	3-Year	5-Year	10-Year	Class D Inception (May 3, 2004)
Standard & Poor’s 500® Index	(13.12)%	4.40%	7.58%	2.88%	5.28%
Russell 3000® Index	(12.69)%	4.73%	8.37%	3.51%	5.96%

Fund performance changes over time and current performance may be higher or lower than stated. The annualized operating expense ratios may vary in future years. For more current information please call Selected Funds Investor Services at 1-800-243-1575.

5

SELECTED FUNDS

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

Management’s Discussion and Analysis – (Continued)

 

²    The definitions of indices quoted in this report appear below. Investments cannot be made directly in the indices.

I.    The Standard & Poor’s 500^® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends, weighted towards stocks with large market capitalization, and represents approximately two-thirds of the total market value of all domestic common stocks.

II.   The Russell 3000^® Index measures the performance of the 3,000 largest companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.

³     The companies included in the Standard & Poor’s 500^® Index and the Russell 3000^® Index are divided into ten sectors. One or more industry groups make up a sector.

⁴     A company’s or sector’s contribution to the Fund’s performance is a product both of its appreciation or depreciation and its weighting within the Fund. For example, a 5% holding that rises 20% has twice as much impact as a 1% holding that rises 50%.

⁵     This Management Discussion and Analysis discusses a number of individual companies. The information provided in this report does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. The Schedule of Investments lists each Fund’s holdings of each company discussed.

Shares of the Selected Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested.

6

SELECTED FUNDS

FUND OVERVIEW

SELECTED AMERICAN SHARES, INC.

At June 30, 2008 (Unaudited)

Portfolio Composition		Industry Weightings
(% of Fund’s Net Assets)		(% of Long Term Portfolio)
			Fund	S&P 500®
Common Stock (U.S.)	82.84%	Energy	20.95%	16.21%
Common Stock (Foreign)	14.40%	Insurance	13.97%	3.52%
Convertible Bonds	0.19%	Diversified Financials	13.91%	6.85%
Short Term Investments	2.61%	Information Technology	9.30%	16.43%
Other Assets & Liabilities	(0.04)%	Food & Staples Retailing	6.91%	2.76%
	100.00%	Food, Beverage & Tobacco	6.01%	5.57%
		Media	5.62%	2.85%
		Materials	4.18%	3.90%
		Health Care	3.45%	11.91%
		Banks	2.62%	2.66%
		Other	2.54%	9.93%
		Transportation	2.46%	2.12%
		Capital Goods	2.39%	8.51%
		Retailing	2.13%	2.54%
		Household & Personal Products	1.42%	2.45%
		Automobiles & Components	1.11%	0.42%
		Consumer Services	1.03%	1.37%
			100.00%	100.00%

Top 10 Holdings

(% of Fund’s Net Assets)

Costco Wholesale Corp.	Food & Staples Retailing	5.00%
ConocoPhillips	Energy	4.58%
Occidental Petroleum Corp.	Energy	4.10%
Devon Energy Corp.	Energy	4.01%
Berkshire Hathaway Inc., Class A	Property & Casualty Insurance	3.79%
EOG Resources, Inc.	Energy	3.74%
American Express Co.	Consumer Finance	3.21%
JPMorgan Chase & Co.	Diversified Financial Services	3.08%
Loews Corp.	Multi-Line Insurance	2.47%
Philip Morris International Inc.	Food, Beverage & Tobacco	2.44%

7

SELECTED FUNDS

FUND OVERVIEW

SELECTED SPECIAL SHARES, INC.

At June 30, 2008 (Unaudited)

Portfolio Composition		Industry Weightings
(% of Fund’s Net Assets)		(% of Long Term Portfolio)
			Fund	Russell 3000®
Common Stock (U.S.)	75.68%	Information Technology	19.72%	16.59%
Common Stock (Foreign)	19.34%	Media	12.75%	2.85%
Convertible Bonds	1.13%	Retailing	8.60%	2.70%
Short Term Investments	3.84%	Health Care	8.19%	11.74%
Other Assets & Liabilities	0.01%	Insurance	7.91%	3.44%
	100.00%	Consumer Durables & Apparel	7.71%	1.12%
		Energy	7.50%	15.23%
		Diversified Financials	7.13%	6.02%
		Capital Goods	5.47%	8.99%
		Materials	3.57%	4.52%
		Other	3.41%	17.68%
		Telecommunication Services	2.66%	3.04%
		Consumer Services	2.45%	1.72%
		Real Estate	1.55%	2.10%
		Food & Staples Retailing	1.38%	2.26%
			100.00%	100.00%

Top 10 Holdings

(% of Fund’s Net Assets)

Google Inc., Class A	Software & Services	5.56%
Garmin Ltd.	Consumer Durables & Apparel	3.84%
Tiffany & Co.	Retailing	3.78%
Johnson & Johnson	Pharmaceuticals, Biotechnology & Life Sciences	3.62%
Transocean Inc.	Energy	3.45%
Grupo Televisa S.A., ADR	Media	3.36%
Markel Corp.	Property & Casualty Insurance	3.27%
Comcast Corp., Special Class A	Media	3.18%
Microsoft Corp.	Software & Services	2.94%
Hunter Douglas NV	Consumer Durables & Apparel	2.67%

8

SELECTED FUNDS

FUND OVERVIEW

SELECTED CAPITAL PRESERVATION TRUST –

SELECTED DAILY GOVERNMENT FUND

At June 30, 2008 (Unaudited)

Portfolio Composition		Maturity Diversification
(% of Fund’s Net Assets)		(% of Portfolio Holdings)
Federal Home Loan Bank	43.96%	0-30 Days	53.51%
Repurchase Agreements	27.99%	31-90 Days	18.67%
Fannie Mae	11.79%	91-180 Days	17.96%
Federal Farm Credit Bank	7.89%	181-391 Days	9.86%
Freddie Mac	6.07%		100.00%
Mortgages	1.97%
Other Assets & Liabilities	0.33%
	100.00%

The maturity dates of floating rate securities used in the Maturity Diversification table are considered to be the effective maturities, based on the reset dates of the securities’ variable rates. See the Fund’s Schedule of Investments for a listing of the floating rate securities.

9

SELECTED FUNDS

EXPENSE EXAMPLE (Unaudited)

	Beginning	Ending	Expenses Paid
	Account Value	Account Value	During Period*
	(01/01/08)	(06/30/08)	(01/01/08-06/30/08)
Selected American Shares
Class S
Actual	$1,000.00	$887.81	$4.22
Hypothetical	$1,000.00	$1,020.39	$4.52
Class D
Actual	$1,000.00	$889.10	$2.68
Hypothetical	$1,000.00	$1,022.03	$2.87
Selected Special Shares
Class S
Actual	$1,000.00	$830.90	$5.42
Hypothetical	$1,000.00	$1,018.95	$5.97
Class D
Actual	$1,000.00	$831.71	$3.78
Hypothetical	$1,000.00	$1,020.74	$4.17
Selected Daily Government Fund
Class S
Actual	$1,000.00	$1,012.69	$3.75
Hypothetical	$1,000.00	$1,021.13	$3.77
Class D
Actual	$1,000.00	$1,014.49	$1.95
Hypothetical	$1,000.00	$1,022.92	$1.96

Hypothetical assumes 5% annual return before expenses.

*Expenses are equal to each Class’s annualized operating expense ratio, multiplied by the average account valueover the period, multiplied by 182/366 (to reflect the one-half year period). See page 11 for a description of the “Expense Example”. The annualized operating expense ratios for the six-month period ended June 30, 2008 are as follows:

	Annualized Expense Ratio**
Selected American Shares
Class S	0.90%
Class D	0.57%
Selected Special Shares
Class S	1.19%
Class D	0.83%
Selected Daily Government Fund
Class S	0.75%
Class D	0.39%

**The expense ratios reflect the impact, if any, of the reduction of expenses paid indirectly and of certain reimbursements from the Adviser.

10

SELECTED FUNDS

EXPENSE EXAMPLE (Unaudited) – (Continued)

The following disclosure provides important information regarding the Funds’ Expense Example. Please refer to this information when reviewing the Expense Example for each Class.

Example

As a shareholder of the Fund, you incur ongoing costs only, including advisory and administrative fees, distribution and/or service (12b-1) fees, and other Fund expenses. The Expense Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for each class is from 01/01/08 to 06/30/08.

Actual Expenses

The information represented in the row entitled “Actual” provides information about actual account values and actual expenses. You may use the information in this row, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid for on your account during this period. An annual maintenance fee of $15, charged on retirement plan accounts per Social Security Number, is not included in the Expense Example. This fee will be waived for accounts sharing the same Social Security Number if the accounts total at least $50,000 at Selected Funds. If this fee was included, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Hypothetical Example for Comparison Purposes

The information represented in the row entitled “Hypothetical” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. An annual maintenance fee of $15, charged on retirement plan accounts per Social Security Number, is not included in the Expense Example. This fee will be waived for accounts sharing the same Social Security Number if the accounts total at least $50,000 at Selected Funds. If this fee was included, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the information in the row entitled “Hypothetical” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

11

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED AMERICAN SHARES, INC.

June 30, 2008 (Unaudited)

Shares					Security			Value (Note 1)
COMMON STOCK - (97.24%)
	CONSUMER DISCRETIONARY - (9.99%)
		Automobiles & Components – (1.08%)
	3,321,500		Harley-Davidson, Inc.			$	120,437,590
		Consumer Durables & Apparel – (0.36%)
	456,000		Garmin Ltd.				19,530,480
	328,596		Hunter Douglas NV (Netherlands)				19,835,518
							39,365,998
		Consumer Services – (1.00%)
	5,211,000		H&R Block, Inc.				111,515,400
		Media – (5.48%)
	14,172,000		Comcast Corp., Special Class A				265,866,720
	5,179,000		Grupo Televisa S.A., ADR (Mexico)				122,327,980
	346,450		Liberty Media Corp. - Capital, Series A *				4,981,951
	1,385,800		Liberty Media Corp. - Entertainment, Series A *				33,522,502
	9,362,500		News Corp., Class A				140,812,000
	205,821		Virgin Media Inc.				2,803,282
	4,179,600		WPP Group PLC (United Kingdom)				40,314,459
							610,628,894
		Retailing – (2.07%)
	453,000		Amazon.com, Inc. *				33,186,780
	2,630,000		Bed Bath & Beyond Inc. *				73,903,000
	3,631,000		CarMax, Inc. *				51,523,890
	1,732,250		Liberty Media Corp. - Interactive, Series A *				25,550,688
	1,856,000		Lowe's Cos, Inc.				38,512,000
	112,000		Sears Holdings Corp. *				8,249,920
							230,926,278
				TOTAL CONSUMER DISCRETIONARY			1,112,874,160
	CONSUMER STAPLES - (13.96%)
		Food & Staples Retailing – (6.73%)
	7,941,900		Costco Wholesale Corp.				557,362,542
	4,397,945		CVS Caremark Corp.				174,026,683
	778,000		Whole Foods Market, Inc.				18,391,920
							749,781,145
		Food, Beverage & Tobacco – (5.85%)
	5,512,500		Altria Group, Inc.				113,337,000
	7,980,437		Diageo PLC (United Kingdom)				146,877,453
	2,232,650		Heineken Holding NV (Netherlands)				102,432,875

12

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED AMERICAN SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Shares						Security			Value (Note 1)
COMMON STOCK - (CONTINUED)
	CONSUMER STAPLES - (CONTINUED)
		Food, Beverage & Tobacco – (Continued)
	517,300			Hershey Co.			$	16,957,094
	5,512,500			Philip Morris International Inc.				272,262,375
								651,866,797
		Household & Personal Products – (1.38%)
	919,333			Avon Products, Inc.				33,114,375
	1,987,000			Procter & Gamble Co.				120,829,470
								153,943,845
					TOTAL CONSUMER STAPLES			1,555,591,787
	ENERGY - (20.41%)
	2,191,400			Canadian Natural Resources Ltd. (Canada)				219,687,850
	41,208,200			China Coal Energy Co. - H (China)				72,086,934
	5,404,460			ConocoPhillips				510,126,980
	3,720,842			Devon Energy Corp.				447,096,375
	3,176,200			EOG Resources, Inc.				416,717,440
	5,081,600			Occidental Petroleum Corp.				456,632,576
	31,700			OGX Petroleo e Gas Participacoes S.A. * (Brazil)				25,113,218
	831,124			Transocean Inc. *				126,654,986
					TOTAL ENERGY			2,274,116,359
	FINANCIALS - (30.09%)
		Banks – (2.55%)
			Commercial Banks – (2.55%)
	804,583			Toronto-Dominion Bank (Canada)				50,101,384
	3,825,174			Wachovia Corp.				59,404,952
	7,372,120			Wells Fargo & Co.				175,087,850
								284,594,186
		Diversified Financials – (13.55%)
			Capital Markets – (5.93%)
	1,662,707			Ameriprise Financial, Inc.				67,622,294
	3,599,600			Bank of New York Mellon Corp.				136,172,868
	1,796,300			Brookfield Asset Management Inc., Class A (Canada)				58,451,602
	712,500			E*TRADE Financial Corp. *				2,223,000
	1,961,410			Julius Baer Holding, Ltd. AG (Switzerland)				132,482,297
	7,263,200			Merrill Lynch & Co., Inc.				230,316,072
	346,621			Morgan Stanley				12,502,619

13

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED AMERICAN SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Shares					Security			Value (Note 1)
COMMON STOCK - (CONTINUED)
	FINANCIALS - (CONTINUED)
		Diversified Financials – (Continued)
			Capital Markets – (Continued)
	330,000			State Street Corp.		$	21,116,700
							660,887,452
			Consumer Finance – (3.27%)
	9,485,800			American Express Co.			357,330,086
	518,932			Discover Financial Services			6,834,334
							364,164,420
			Diversified Financial Services – (4.35%)
	2,352,095			Citigroup Inc.			39,421,112
	10,010,740			JPMorgan Chase & Co.			343,468,490
	2,265,600			Moody's Corp.			78,027,264
	289,500			Visa Inc., Class A *			23,539,245
							484,456,111
							1,509,507,983
		Insurance – (13.61%)
			Insurance Brokers – (0.71%)
	1,718,700			Aon Corp.			78,957,078
			Life & Health Insurance – (0.39%)
	658,000			Principal Financial Group, Inc.			27,616,260
	400,000			Sun Life Financial Inc. (Canada)			16,380,000
							43,996,260
			Multi-line Insurance – (4.60%)
	8,941,925			American International Group, Inc.			236,603,335
	5,874,000			Loews Corp.			275,490,600
							512,093,935
			Property & Casualty Insurance – (7.04%)
	1,774,669			Ambac Financial Group, Inc.			2,378,057
	3,497			Berkshire Hathaway Inc., Class A *			422,262,750
	6,366			Berkshire Hathaway Inc., Class B *			25,540,392
	21,700			Markel Corp. *			7,963,900
	884,000			MBIA Inc. *			3,880,760
	6,850,800			NIPPONKOA Insurance Co., Ltd. (Japan)			59,420,698
	10,212,800			Progressive Corp. (Ohio)			191,183,616

14

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED AMERICAN SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Shares						Security			Value (Note 1)
COMMON STOCK - (CONTINUED)
	FINANCIALS - (CONTINUED)
		Insurance – (Continued)
			Property & Casualty Insurance – (Continued)
	1,853,000			Tokio Marine Holdings, Inc. (formerly Millea Holdings, Inc.) (Japan)			$	72,245,797
								784,875,970
			Reinsurance – (0.87%)
	1,707,287			Transatlantic Holdings, Inc.				96,410,497
								1,516,333,740
		Real Estate – (0.38%)
	9,546,000			Hang Lung Group Ltd. (Hong Kong)				42,421,225
					TOTAL FINANCIALS			3,352,857,134
	HEALTH CARE - (3.36%)
		Health Care Equipment & Services – (2.92%)
	1,610,000			Cardinal Health, Inc.				83,043,800
	2,027,783			Covidien Ltd.				97,110,528
	1,230,000			Express Scripts, Inc. *				77,157,900
	2,610,000			UnitedHealth Group Inc.				68,512,500
								325,824,728
		Pharmaceuticals, Biotechnology & Life Sciences – (0.44%)
	756,000			Johnson & Johnson				48,641,040
					TOTAL HEALTH CARE			374,465,768
	INDUSTRIALS - (5.71%)
		Capital Goods – (2.33%)
	4,814,500			General Electric Co.				128,499,005
	450,300			Siemens AG, Registered (Germany)				49,996,939
	2,027,783			Tyco International Ltd.				81,192,432
								259,688,376
		Commercial Services & Supplies – (0.98%)
	1,241,000			D&B Corp.				108,761,240
		Transportation – (2.40%)
	1,311,300			Asciano Group (Australia)				4,362,058
	22,173,645			China Merchants Holdings International Co., Ltd. (China)				85,739,895
	16,300,000			China Shipping Development Co. Ltd. - H (China)				48,917,246
	13,859,500			Cosco Pacific Ltd. (China)				22,716,267
	521,910			Kuehne & Nagel International AG, Registered (Switzerland)				49,582,855
	1,821,793			Toll Holdings Ltd. (Australia)				10,513,696

15

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED AMERICAN SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Shares					Security			Value (Note 1)
COMMON STOCK - (CONTINUED)
	INDUSTRIALS - (CONTINUED)
		Transportation – (Continued)
	740,500		United Parcel Service, Inc., Class B			$	45,518,535
							267,350,552
				TOTAL INDUSTRIALS			635,800,168
	INFORMATION TECHNOLOGY - (9.06%)
		Semiconductors & Semiconductor Equipment – (0.95%)
	3,750,300		Texas Instruments Inc.				105,608,448
		Software & Services – (4.27%)
	1,012,000		eBay Inc. *				27,637,720
	125,000		Google Inc., Class A *				65,825,000
	5,363,250		Iron Mountain Inc. *				142,394,287
	8,718,000		Microsoft Corp.				240,006,540
							475,863,547
		Technology Hardware & Equipment – (3.84%)
	3,474,300		Agilent Technologies, Inc. *				123,476,622
	2,491,000		Cisco Systems, Inc. *				57,940,660
	4,205,000		Dell Inc. *				92,047,450
	1,850,000		Hewlett-Packard Co.				81,788,500
	2,027,783		Tyco Electronics Ltd.				72,635,187
							427,888,419
				TOTAL INFORMATION TECHNOLOGY			1,009,360,414
	MATERIALS - (4.07%)
	1,339,500		BHP Billiton PLC (United Kingdom)				51,227,178
	930,600		Martin Marietta Materials, Inc.				96,400,854
	477,500		Rio Tinto PLC (United Kingdom)				57,152,084
	7,883,400		Sealed Air Corp.				149,863,434
	2,510,400		Sino-Forest Corp. * (Canada)				43,969,544
	924,100		Vulcan Materials Co.				55,242,698
				TOTAL MATERIALS			453,855,792
	TELECOMMUNICATION SERVICES - (0.59%)
	6,853,000		Sprint Nextel Corp. *				65,103,500
				TOTAL TELECOMMUNICATION SERVICES			65,103,500
			TOTAL COMMON STOCK – (Identified cost $7,741,587,227)				10,834,025,082

16

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED AMERICAN SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Principal					Security			Value (Note 1)
CONVERTIBLE BONDS - (0.19%)
	TELECOMMUNICATION SERVICES - (0.19%)
$	19,200,000	Level 3 Communications, Inc., Conv. Sr. Notes, 10.00%, 05/01/11				$	20,856,000
		TOTAL CONVERTIBLE BONDS – (Identified cost $19,200,000)					20,856,000
SHORT TERM INVESTMENTS - (2.61%)
	COMMERCIAL PAPER - (0.14%)
	15,500,000	Rabobank USA Financial Corp., 2.29%, 07/01/08					15,500,000
				TOTAL COMMERCIAL PAPER			15,500,000
	REPURCHASE AGREEMENTS - (2.47%)
	94,018,000	ABN AMRO Inc. Joint Repurchase Agreement,
			2.80%, 07/01/08, dated 06/30/08, repurchase value of $94,025,313
			(collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 3.15%-6.00%, 06/12/09-05/01/38, total market value $95,898,360)				94,018,000
	94,018,000	Banc of America Securities LLC Joint Repurchase Agreement,
			2.45%, 07/01/08, dated 06/30/08, repurchase value of $94,024,398
			(collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.50%, 05/01/35-06/01/38, total market value $95,898,360)				94,018,000
	25,072,000	Lehman Brothers Inc. Joint Repurchase Agreement,
			2.20%, 07/01/08, dated 06/30/08, repurchase value of $25,073,532
			(collateralized by: U.S. Government agency mortgages in a pooled cash account, 4.50%-7.00%, 06/01/22-06/01/38, total market value $25,573,440)				25,072,000
	62,333,000	UBS Securities LLC Joint Repurchase Agreement,
			2.60%, 07/01/08, dated 06/30/08, repurchase value of $62,337,502
			(collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%, 02/01/36, total market value $63,579,660)				62,333,000
				TOTAL REPURCHASE AGREEMENTS			275,441,000
		TOTAL SHORT TERM INVESTMENTS – (Identified cost $290,941,000)					290,941,000

17

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED AMERICAN SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

		Total Investments - (100.04%) – (identified cost $8,051,728,227) - (a)		$	11,145,822,082
		Liabilities Less Other Assets - (0.04%)			(4,819,303)
			Net Assets - (100.00%)	$	11,141,002,779
ADR: American Depositary Receipt
*	Non-Income producing security.
(a)	Aggregate cost for Federal Income Tax purposes is $8,055,928,644. At June 30, 2008 unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows:
		Unrealized appreciation		$	3,882,736,716
		Unrealized depreciation			(792,843,278)
			Net unrealized appreciation	$	3,089,893,438

See Notes to Financial Statements

18

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED SPECIAL SHARES, INC.

June 30, 2008 (Unaudited)

Shares					Security			Value (Note 1)
COMMON STOCK - (95.02%)
	CONSUMER DISCRETIONARY - (31.48%)
		Automobiles & Components – (1.17%)
	18,000		Johnson Controls, Inc.			$	516,240
	15,576		WABCO Holdings Inc.				723,661
							1,239,901
		Consumer Durables & Apparel – (7.42%)
	17,200		Compagnie Financiere Richemont S.A., Bearer Shares, Unit A (Switzerland)				958,034
	94,500		Garmin Ltd.				4,047,435
	46,695		Hunter Douglas NV (Netherlands)				2,818,718
							7,824,187
		Consumer Services – (2.36%)
	37,930		H&R Block, Inc.				811,702
	47,800		Yum! Brands, Inc.				1,677,302
							2,489,004
		Media – (12.26%)
	179,100		Comcast Corp., Special Class A				3,359,916
	149,900		Grupo Televisa S.A., ADR (Mexico)				3,540,638
	18,200		Lagardere S.C.A. (France)				1,036,452
	25,500		Liberty Media Corp. - Entertainment, Series A *				617,865
	76,400		News Corp., Class A				1,149,056
	21,402		Virgin Media Inc.				291,495
	35,500		Walt Disney Co.				1,107,600
	38,300		WPP Group PLC, ADR (United Kingdom)				1,831,889
							12,934,911
		Retailing – (8.27%)
	127,460		CarMax, Inc. *				1,808,658
	40,300		Liberty Media Corp. - Interactive, Series A *				594,425
	89,460		Netflix Inc. *				2,327,749
	97,900		Tiffany & Co.				3,989,425
							8,720,257
				TOTAL CONSUMER DISCRETIONARY			33,208,260
	CONSUMER STAPLES - (2.19%)
		Food & Staples Retailing – (1.33%)
	12,700		Costco Wholesale Corp.				891,286

19

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED SPECIAL SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Shares							Security			Value (Note 1)
COMMON STOCK - (CONTINUED)
	CONSUMER STAPLES - (CONTINUED)
		Food & Staples Retailing – (Continued)
	21,700				Whole Foods Market, Inc.			$	512,988
									1,404,274
		Food, Beverage & Tobacco – (0.86%)
	19,665				Heineken Holding NV (Netherlands)				902,220
						TOTAL CONSUMER STAPLES			2,306,494
	ENERGY - (7.22%)
	9,100				Devon Energy Corp.				1,093,456
	9,200				Occidental Petroleum Corp.				826,712
	27,600				Tenaris S.A., ADR (Argentina)				2,056,200
	23,871				Transocean Inc. *				3,637,702
						TOTAL ENERGY			7,614,070
	FINANCIALS - (15.95%)
		Diversified Financials – (6.86%)
			Capital Markets – (2.82%)
	135,272				E*TRADE Financial Corp. *				422,049
	9,730				Julius Baer Holding, Ltd. AG (Switzerland)				657,207
	16,480				Legg Mason, Inc.				718,033
	37,100				Merrill Lynch & Co., Inc.				1,176,441
									2,973,730
			Consumer Finance – (0.89%)
	71,630				Discover Financial Services				943,367
			Diversified Financial Services – (3.15%)
	1,270				Nymex Holdings Inc.				107,290
	30,200				Oaktree Capital Group LLC, Class A (a)				845,600
	21,213				Pargesa Holdings S.A., Bearer Shares (Switzerland)				2,365,191
									3,318,081
									7,235,178
		Insurance – (7.60%)
				Insurance Brokers – (0.58%)
	34,980				Brown & Brown, Inc.				608,302
				Life & Health Insurance – (1.66%)
	12,600				Aflac, Inc.				791,280
	31,400				Power Corp. of Canada (Canada)				961,369
									1,752,649

20

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED SPECIAL SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Shares						Security			Value (Note 1)
COMMON STOCK - (CONTINUED)
	FINANCIALS - (CONTINUED)
		Insurance – (Continued)
			Property & Casualty Insurance – (3.50%)
	121,163			Ambac Financial Group, Inc.			$	162,359
	9,405			Markel Corp. *				3,451,635
	18,800			MBIA Inc. *				82,532
								3,696,526
			Reinsurance – (1.86%)
	6,350			Everest Re Group, Ltd.				506,159
	6,460			RenaissanceRe Holdings Ltd.				288,568
	20,688			Transatlantic Holdings, Inc.				1,168,251
								1,962,978
								8,020,455
		Real Estate – (1.49%)
	68,895			Redwood Trust, Inc.				1,570,117
					TOTAL FINANCIALS			16,825,750
	HEALTH CARE - (7.87%)
		Health Care Equipment & Services – (3.14%)
	12,400			Cardinal Health, Inc.				639,592
	28,100			IDEXX Laboratories, Inc. *				1,369,594
	49,700			UnitedHealth Group Inc.				1,304,625
								3,313,811
		Pharmaceuticals, Biotechnology & Life Sciences – (4.73%)
	59,300			Johnson & Johnson				3,815,362
	59,900			Schering-Plough Corp.				1,179,431
								4,994,793
					TOTAL HEALTH CARE			8,308,604
	INDUSTRIALS - (6.50%)
		Capital Goods – (5.26%)
	180,808			Blount International, Inc. *				2,099,181
	10,502			Franklin Electric Co., Inc.				407,268
	5,347			Ingersoll-Rand Co. Ltd., Class A				200,138
	24,800			Shaw Group Inc. *				1,532,392
	11,800			Siemens AG, Registered (Germany)				1,310,157
								5,549,136

21

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED SPECIAL SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Shares					Security			Value (Note 1)
COMMON STOCK - (CONTINUED)
	INDUSTRIALS - (CONTINUED)
		Commercial Services & Supplies – (0.45%)
	5,400		D&B Corp.			$	473,256
		Transportation – (0.79%)
	118,300		Clark Holdings, Inc. *				289,835
	5,790		Kuehne & Nagel International AG, Registered (Switzerland)				550,065
							839,900
				TOTAL INDUSTRIALS			6,862,292
	INFORMATION TECHNOLOGY - (18.96%)
		Semiconductors & Semiconductor Equipment – (2.59%)
	97,200		Texas Instruments Inc.				2,737,152
		Software & Services – (11.05%)
	160,393		Convera Corp., Class A *				224,550
	11,130		Google Inc., Class A *				5,861,058
	54,500		Iron Mountain Inc. *				1,446,975
	112,650		Microsoft Corp.				3,101,255
	49,300		Yahoo! Inc. *				1,018,538
							11,652,376
		Technology Hardware & Equipment – (5.32%)
	76,300		Agilent Technologies, Inc. *				2,711,702
	35,200		Cisco Systems, Inc. *				818,752
	95,100		Dell Inc. *				2,081,739
							5,612,193
				TOTAL INFORMATION TECHNOLOGY			20,001,721
	MATERIALS - (3.43%)
	12,200		Sealed Air Corp.				231,922
	36,680		Sigma-Aldrich Corp.				1,974,118
	80,600		Sino-Forest Corp. * (Canada)				1,411,705
				TOTAL MATERIALS			3,617,745
	TELECOMMUNICATION SERVICES - (1.42%)
	16,280		American Tower Corp., Class A *				687,830
	85,650		Sprint Nextel Corp. *				813,675
				TOTAL TELECOMMUNICATION SERVICES			1,501,505
			TOTAL COMMON STOCK – (Identified cost $96,032,946)				100,246,441

22

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED SPECIAL SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

Principal				Security			Value (Note 1)
CONVERTIBLE BONDS - (1.13%)
	TELECOMMUNICATION SERVICES - (1.13%)
$	1,100,000	Level 3 Communications, Inc., Conv. Sr. Notes, 10.00%, 05/01/11			$	1,194,875
		TOTAL CONVERTIBLE BONDS – (Identified cost $1,100,000)				1,194,875
SHORT TERM INVESTMENTS – (3.84%)
	1,382,000	ABN AMRO Inc. Joint Repurchase Agreement,
			2.80%, 07/01/08, dated 06/30/08, repurchase value of $1,382,107
			(collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 3.15%-6.00%, 06/12/09-05/01/38, total market value $1,409,640)			1,382,000
	1,382,000	Banc of America Securities LLC Joint Repurchase Agreement,
			2.45%, 07/01/08, dated 06/30/08, repurchase value of $1,382,094
			(collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.50%, 05/01/35-06/01/38, total market value $1,409,640)			1,382,000
	369,000	Lehman Brothers Inc. Joint Repurchase Agreement,
			2.20%, 07/01/08, dated 06/30/08, repurchase value of $369,023
			(collateralized by: U.S. Government agency mortgages in a pooled cash account, 4.50%-7.00%, 06/01/22-06/01/38, total market value $376,380)			369,000
	917,000	UBS Securities LLC Joint Repurchase Agreement,
			2.60%, 07/01/08, dated 06/30/08, repurchase value of $917,066
			(collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%, 02/01/36, total market value $935,340)			917,000
		TOTAL SHORT TERM INVESTMENTS – (Identified cost $4,050,000)				4,050,000

23

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED SPECIAL SHARES, INC. - (Continued)

June 30, 2008 (Unaudited)

		Total Investments - (99.99%) – (identified cost $101,182,946) - (b)		$	105,491,316
		Other Assets Less Liabilities - (0.01%)			13,551
			Net Assets - (100.00%)	$	105,504,867
ADR: American Depositary Receipt
*	Non-Income producing security.
(a)	Illiquid Security - See Note 9 of the Notes to Financial Statements.
(b)	Aggregate cost for Federal Income Tax purposes is $102,437,049. At June 30, 2008 unrealized appreciation (depreciation) of securities for Federal Income Tax purposes is as follows:
		Unrealized appreciation		$	20,011,003
		Unrealized depreciation			(16,956,736)
			Net unrealized appreciation	$	3,054,267

See Notes to Financial Statements

24

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED CAPITAL PRESERVATION TRUST -

Selected Daily Government FUND

June 30, 2008 (Unaudited)

Principal			Security			Value (Note 1)
FANNIE MAE - (11.79%)
$	1,300,000	3.10%, 07/02/08		$	1,300,028
	200,000	3.10%, 07/21/08			199,796
	190,000	3.21%, 07/23/08			189,799
	3,870,000	5.00%, 07/25/08			3,871,889
	225,000	3.30%, 07/29/08			225,180
	2,200,000	5.125%, 09/02/08			2,209,093
	500,000	3.75%, 09/15/08			501,474
	2,000,000	5.00%, 09/15/08			2,009,789
	160,000	4.50%, 10/15/08			160,880
	750,000	3.20%, 11/28/08			751,095
	1,330,000	3.375%, 12/15/08			1,335,517
	500,000	4.00%, 01/26/09			504,344
	600,000	3.85%, 04/14/09			607,076
		TOTAL FANNIE MAE – (Identified cost $13,865,960)			13,865,960
FEDERAL FARM CREDIT BANK - (7.89%)
	700,000	3.50%, 08/25/08			701,138
	100,000	4.25%, 10/10/08			100,448
	1,000,000	3.70%, 12/17/08			1,006,629
	5,000,000	2.71%, 01/02/09 (a)			5,000,000
	500,000	3.875%, 01/12/09			504,352
	2,000,000	2.56%, 04/06/09 (b)			1,960,320
		TOTAL FEDERAL FARM CREDIT BANK – (Identified cost $9,272,887)			9,272,887
FEDERAL HOME LOAN BANK - (43.96%)
	5,000,000	2.11%, 07/02/08 (b)			4,999,707
	2,000,000	2.85%, 07/07/08			2,000,000
	500,000	5.125%, 07/30/08			500,324
	1,000,000	5.125%, 07/30/08			1,000,289
	695,000	5.125%, 08/08/08			696,776
	500,000	3.35%, 08/12/08			500,536
	2,000,000	5.25%, 08/14/08			2,002,391
	1,025,000	4.885%, 08/20/08			1,028,679
	160,000	4.50%, 09/08/08			160,720
	390,000	5.70%, 09/10/08			392,697
	1,000,000	2.45%, 09/11/08			1,000,567
	2,095,000	4.625%, 09/12/08			2,102,288

25

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED CAPITAL PRESERVATION TRUST -

Selected Daily Government FUND - (Continued)

June 30, 2008 (Unaudited)

Principal			Security			Value (Note 1)
FEDERAL HOME LOAN BANK - (CONTINUED)
$	605,000	5.00%, 09/12/08		$	608,369
	150,000	5.42%, 09/23/08			151,137
	525,000	4.25%, 09/26/08			527,425
	250,000	5.085%, 10/07/08			251,565
	1,425,000	4.50%, 10/14/08			1,426,094
	2,000,000	2.559%, 10/16/08 (a)			2,000,048
	300,000	3.25%, 10/21/08			300,631
	2,000,000	4.625%, 10/24/08			2,012,524
	2,000,000	4.75%, 10/27/08			2,014,132
	2,000,000	2.565%, 11/07/08			2,002,853
	500,000	4.00%, 11/12/08			503,432
	1,550,000	3.625%, 11/14/08			1,555,876
	740,000	5.25%, 11/14/08			745,205
	400,000	4.35%, 11/19/08			403,266
	100,000	4.875%, 11/19/08			100,572
	700,000	5.545%, 11/25/08			707,546
	1,500,000	2.452%, 12/01/08 (a)			1,499,972
	500,000	3.01%, 12/11/08			501,693
	970,000	4.75%, 12/12/08			980,434
	500,000	4.00%, 12/16/08			504,005
	150,000	4.375%, 12/19/08			151,487
	1,750,000	4.05%, 12/23/08			1,764,748
	45,000	4.27%, 12/23/08			45,365
	5,000,000	2.75%, 01/23/09 (a)			5,004,339
	1,000,000	2.60%, 01/28/09			1,000,000
	1,000,000	2.76%, 02/12/09			1,000,000
	900,000	5.75%, 02/13/09			918,590
	3,000,000	2.68%, 03/20/09 (a)			3,000,000
	1,000,000	2.27%, 04/03/09 (a)			1,000,000
	1,000,000	2.76%, 04/08/09 (a)			1,000,000
	600,000	3.75%, 04/27/09			605,230
	1,000,000	4.25%, 05/15/09			1,015,035
		TOTAL FEDERAL HOME LOAN BANK – (Identified cost $51,686,547)			51,686,547
FREDDIE MAC - (6.07%)
	241,000	5.00%, 07/23/08			241,393
	1,200,000	3.15%, 07/29/08			1,200,532
	1,020,000	4.50%, 08/04/08			1,021,877

26

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED CAPITAL PRESERVATION TRUST -

Selected Daily Government FUND - (Continued)

June 30, 2008 (Unaudited)

Principal				Security			Value (Note 1)
FREDDIE MAC - (Continued)
$	1,003,000	3.64%, 08/12/08			$	1,004,471
	180,000	3.625%, 09/15/08				180,423
	430,000	4.70%, 10/06/08				432,797
	120,000	5.125%, 10/15/08				120,874
	500,000	3.94%, 11/20/08				503,250
	1,400,000	4.10%, 01/14/09				1,404,562
	100,000	5.75%, 03/15/09				102,187
	250,000	3.50%, 04/06/09				252,146
	675,000	3.375%, 04/15/09				677,552
		TOTAL FREDDIE MAC – (Identified cost $7,142,064)				7,142,064
MORTGAGES - (1.97%)
	COLLATERALIZED MORTGAGE OBLIGATIONS - (0.05%)
	20,945	Fannie Mae 6.50%, 10/25/08				20,944
	44,094	Fannie Mae 6.00%, 11/25/08				44,134
			TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS			65,078
	FREDDIE MAC POOLS - (1.92%)
	68,113	4.00%, 07/01/08, Pool No. M90826				68,113
	134,755	4.00%, 08/01/08, Pool No. M90831				134,608
	448,319	6.00%, 09/01/08, Pool No. M80700				450,257
	291,110	3.50%, 10/01/08, Pool No. M90850				290,876
	303,691	3.50%, 12/01/08, Pool No. M90866				303,912
	312,024	4.50%, 01/01/09, Pool No. M90893				313,504
	185,288	5.00%, 01/01/09, Pool No. M80718				186,466
	195,450	5.50%, 02/01/09, Pool No. M80720				197,253
	306,053	4.00%, 06/01/09, Pool No. M90924				307,799
			TOTAL FREDDIE MAC POOLS			2,252,788
		TOTAL MORTGAGES – (Identified cost $2,317,866)				2,317,866

27

SELECTED FUNDS

SCHEDULE OF INVESTMENTS

SELECTED CAPITAL PRESERVATION TRUST -

Selected Daily Government FUND - (Continued)

June 30, 2008 (Unaudited)

Principal							Security			Value (Note 1)
REPURCHASE AGREEMENTS – (27.99%)
$	11,235,000			ABN AMRO Inc. Joint Repurchase Agreement,
					2.80%, 07/01/08, dated 06/30/08, repurchase value of $11,235,874
					(collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 3.15%-6.00%, 06/12/09-05/01/38, total market value $11,459,700)			$	11,235,000
	11,235,000			Banc of America Securities LLC Joint Repurchase Agreement,
					2.45%, 07/01/08, dated 06/30/08, repurchase value of $11,235,765
					(collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.50%, 05/01/35-06/01/38, total market value $11,459,700)				11,235,000
	2,996,000			Lehman Brothers Inc. Joint Repurchase Agreement,
					2.20%, 07/01/08, dated 06/30/08, repurchase value of $2,996,183
					(collateralized by: U.S. Government agency mortgages in a pooled cash account, 4.50%-7.00%, 06/01/22-06/01/38, total market value $3,055,920)				2,996,000
	7,448,000			UBS Securities LLC Joint Repurchase Agreement,
					2.60%, 07/01/08, dated 06/30/08, repurchase value of $7,448,538
					(collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%, 02/01/36, total market value $7,596,960)				7,448,000
				TOTAL REPURCHASE AGREEMENTS – (Identified cost $32,914,000)					32,914,000
			Total Investments - (99.67%) – (identified cost $117,199,324) (c)						117,199,324
			Other Assets Less Liabilities - (0.33%)						384,528
						Net Assets - (100.00%)		$	117,583,852
	(a)	The interest rates on floating rate securities, shown as of June 30, 2008, may change daily or less frequently and are based on indices of market interest rates. For purposes of amortized cost valuation, the maturity dates of these securities are considered to be the effective maturities, based on the reset dates of the securities' variable rates.
	(b)	Zero coupon bonds reflect effective yield on the date of purchase.
	(c)	Aggregate cost for Federal Income Tax purposes is $117,199,324.

See Notes to Financial Statements

28

SELECTED FUNDS

STATEMENTS OF ASSETS AND LIABILITIES

At June 30, 2008 (Unaudited)

				Selected American Shares		Selected Special Shares		Selected Daily Government Fund
ASSETS:
Investments in securities at value* (see accompanying Schedules of Investments)			$	11,145,822,082	$	105,491,316	$	117,199,324
Cash				4,094,219		2,465		4,726
Cash - foreign currencies**				450,010		18,516		–
Receivables:
	Capital stock sold			12,700,077		26,511		16,637
	Dividends and interest			12,334,039		188,712		761,357
	Investment securities sold			414,621		805,116		–
Prepaid expenses				179,439		2,989		2,333
Due from advisor				–		–		1,100
		Total assets		11,175,994,487		106,535,625		117,985,477
LIABILITIES:
Payables:
	Investment securities purchased			16,682,616		852,943		202,911
	Capital stock redeemed			9,685,144		66,597		26,560
	Distributions payable			–		–		106,692
Accrued management fees				5,431,894		69,618		30,717
Accrued distribution service fees (Note 3)				1,557,868		7,571		1,069
Other accrued expenses				1,634,186		34,029		33,676
		Total liabilities		34,991,708		1,030,758		401,625
NET ASSETS			$	11,141,002,779	$	105,504,867	$	117,583,852
NET ASSETS CONSIST OF:
Par value of shares of capital stock			$	328,094,314	$	2,578,400	$	11,758,385
Additional paid-in capital				7,705,365,099		100,183,527		105,825,467
Undistributed net investment income (loss)				50,966,089		(627,557)		–
Accumulated net realized losses from investments and foreign currency transactions				(37,538,315)		(941,438)		–
Net unrealized appreciation on investments and foreign currency transactions				3,094,115,592		4,311,935		–
		Net Assets	$	11,141,002,779	$	105,504,867	$	117,583,852
*Including:
	Cost of investments		$	8,051,728,227	$	101,182,946	$	117,199,324
	Cost and market value of repurchase agreements (if greater than 10% of assets)			–		–		32,914,000
**Cost of cash - foreign currencies				447,859		18,535		–

29

SELECTED FUNDS

STATEMENTS OF ASSETS AND LIABILITIES - (CONTINUED)

At June 30, 2008 (Unaudited)

			Selected American Shares		Selected Special Shares		Selected Daily Government Fund
CLASS S SHARES:
	Net assets	$	6,714,340,566	$	29,648,486	$	4,898,870
	Shares outstanding		158,295,314		2,902,120		4,898,870
	Net asset value, offering, and redemption price per share (Net Assets ÷ Shares Outstanding)	$	42.42	$	10.22	$	1.00
CLASS D SHARES:
	Net assets	$	4,426,662,213	$	75,856,381	$	112,684,982
	Shares outstanding		104,180,137		7,411,478		112,684,982
	Net asset value, offering, and redemption price per share (Net Assets ÷ Shares Outstanding)	$	42.49	$	10.23	$	1.00

See Notes to Financial Statements

30

SELECTED FUNDS

STATEMENTS OF OPERATIONS

For the six months ended June 30, 2008 (Unaudited)

			Selected American Shares		Selected Special Shares		Selected Daily Government Fund
INVESTMENT INCOME:
Income:
	Dividends*	$	95,743,856	$	812,232	$	–
	Interest		3,025,844		105,875		1,905,744
	Net lending fees		17,184		–		–
	Total income		98,786,884		918,107		1,905,744
Expenses:
	Management fees (Note 2)		30,752,990		402,888		174,070
	Custodian fees		627,670		17,891		10,199
	Transfer agent fees:
	Class S		3,240,613		25,216		7,112
	Class D		474,219		13,950		4,450
	Audit fees		30,600		10,200		8,400
	Legal fees		57,346		3,600		3,628
	Reports to shareholders		494,992		5,000		3,011
	Directors’ fees and expenses		298,942		3,138		2,880
	Registration and filing fees		65,222		16,500		16,552
	Miscellaneous		141,138		7,495		4,378
	Payments under distribution plan (Note 3):
	Class S		8,806,166		43,467		6,115
	Total expenses		44,989,898		549,345		240,795
	Expenses paid indirectly (Note 6)		(2,185)		(479)		(14)
	Reimbursement of expenses by adviser (Note 2)		–		–		(4,250)
	Net expenses		44,987,713		548,866		236,531
	Net investment income		53,799,171		369,241		1,669,213
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
	Investment transactions		66,177,475		326,889		–
	Foreign currency transactions		(489,632)		(1,716)		–
Net decrease in unrealized appreciation			(1,536,127,854)		(23,150,657)		–
Net realized and unrealized loss on investments and foreign currency			(1,470,440,011)		(22,825,484)		–
	Net increase (decrease) in net assets resulting from operations	$	(1,416,640,840)	$	(22,456,243)	$	1,669,213
*Net of foreign taxes withheld as follows		$	1,480,837	$	50,227	$	–

See Notes to Financial Statements

31

SELECTED FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

For the six months ended June 30, 2008 (Unaudited)

			Selected American Shares		Selected Special Shares		Selected Daily Government Fund
OPERATIONS:
	Net investment income	$	53,799,171	$	369,241	$	1,669,213
	Net realized gain from investments and foreign currency transactions		65,687,843		325,173		–
	Net decrease in unrealized appreciation on investments and foreign currency transactions		(1,536,127,854)		(23,150,657)		–
	Net increase (decrease) in net assets resulting from operations		(1,416,640,840)		(22,456,243)		1,669,213
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
	Net investment income:
	Class S		–		–		(62,111)
	Class D		–		–		(1,607,102)
CAPITAL SHARE TRANSACTIONS:
	Net increase (decrease) in net assets resulting from capital share transactions (Note 5):
	Class S		(29,435,302)		(5,782,401)		22,960
	Class D		(34,584,907)		(2,915,029)		2,498,649
Total increase (decrease) in net assets			(1,480,661,049)		(31,153,673)		2,521,609
NET ASSETS:
	Beginning of period		12,621,663,828		136,658,540		115,062,243
	End of period*	$	11,141,002,779	$	105,504,867	$	117,583,852
*Including undistributed net investment income (loss) of		$	50,966,089	$	(627,557)	$	–

See Notes to Financial Statements

32

SELECTED FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

For the year ended December 31, 2007

			Selected American Shares		Selected Special Shares		Selected Daily Government Fund
OPERATIONS:
	Net investment income	$	142,810,592	$	307,497	$	5,317,055
	Net realized gain from investments and foreign currency transactions		344,081,842		12,698,029		–
	Net increase (decrease) in unrealized appreciation on investments and foreign currency transactions		114,688,416		(13,973,179)		–
	Net increase (decrease) in net assets resulting from operations		601,580,850		(967,653)		5,317,055
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
	Net investment income:
	Class S		(77,900,811)		(31,093)		(232,293)
	Class D		(65,056,495)		(429,931)		(5,084,762)
	Realized gains from investment transactions:
	Class S		–		(4,661,736)		–
	Class D		–		(10,363,282)		–
CAPITAL SHARE TRANSACTIONS:
	Net increase (decrease) in net assets resulting from capital share transactions (Note 5):
	Class S		(195,201,856)		(7,953,039)		(1,040,098)
	Class D		442,005,167		11,397,530		6,533,082
Total increase (decrease) in net assets			705,426,855		(13,009,204)		5,492,984
NET ASSETS:
	Beginning of year		11,916,236,973		149,667,744		109,569,259
	End of year*	$	12,621,663,828	$	136,658,540	$	115,062,243
*Including overdistributed net investment income of		$	(2,833,082)	$	(996,798)	$	–

See Notes to Financial Statements

33

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS

June 30, 2008 (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Selected Funds (“Funds”) consist of Selected American Shares, Inc. (a Maryland corporation) (“Selected American Shares”), Selected Special Shares, Inc. (a Maryland corporation) (“Selected Special Shares”), and the Selected Capital Preservation Trust (an Ohio corporation) (“Trust”). The Trust consists of the Selected Daily Government Fund. The Funds and Trust are registered under the Investment Company Act of 1940, as amended, as diversified, open-end management investment companies. The following is a summary of significant accounting policies followed by the Funds in the preparation of financial statements.

Selected American Shares and Selected Special Shares are diversified, professionally managed stock-oriented funds.

Selected Daily Government Fund seeks to provide a high level of current income from short-term money market securities consistent with prudent investment management, preservation of capital and maintenance of liquidity. It invests in U.S. Government Securities and repurchase agreements in respect thereto.

An investment in any of the Funds, as with any mutual fund, includes risks that vary depending upon the fund's investment objectives and policies. There is no assurance that the investment objective of any fund will be achieved. A fund's return and net asset value will fluctuate, although Selected Daily Government Fund seeks to maintain a net asset value of $1.00 per share.

The Class S and Class D shares are sold at net asset value. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based on the relative proportion of net assets represented by each class. Operating expenses directly attributable to a specific class are charged against the operations of that class. All classes have identical rights with respect to voting (exclusive of each Class’ distribution arrangement), liquidation and distributions.

A. VALUATION OF SECURITIES – The Funds calculate the net asset value of their shares as of the close of the New York Stock Exchange (“Exchange”), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities listed on the Exchange (and other national exchanges) are valued at the last reported sales price on the day of valuation. Securities traded in the over-the-counter market (e.g. NASDAQ) and listed securities for which no sale was reported on that date are stated at the last quoted bid price. Securities traded on foreign exchanges are valued based upon the last sales price on the principal exchange on which the security is traded prior to the time when the Funds’ assets are valued. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Securities whose values have been materially affected by what Davis Selected Advisers, L.P. (“Adviser”), the Funds’ investment adviser, identifies as a significant event occurring before the Funds’ assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Directors/Trustees. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. For Selected Daily Government Fund, in compliance with Rule 2a-7 of the Investment Company Act of 1940, securities are valued at amortized cost, which approximates market value. These valuation procedures are reviewed and subject to approval by the Board of Directors/Trustees.

34

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS – (CONTINUED)

June 30, 2008 (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)

A. VALUATION OF SECURITIES – (CONTINUED)

Fair Value Measurements – The Funds adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”), effective January 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. FAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

§ Level 1 – quoted prices in active markets for identical securities

§ Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

§ Level 3 – significant unobservable inputs (including Fund’s own assumptions in determining the fair value of investments

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Money market securities are valued using amortized cost, in accordance with rules under the Investment Company Act of 1940. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2.

The following is a summary of the inputs used as of June 30, 2008 in valuing each Fund’s investments carried at value:

	Investments in Securities at Value
	Selected American Shares		Selected Special Shares		Selected Daily Government Fund
Valuation inputs
Level 1 – Quoted prices	$	10,834,025,082	$	99,400,841	$	–
Level 2 – Other Significant Observable Inputs		311,797,000		6,090,475		117,199,324
Level 3 – Significant Unobservable Inputs		–		–		–
Total	$	11,145,822,082	$	105,491,316	$	117,199,324

35

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS – (CONTINUED)

June 30, 2008 (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)

B. MASTER REPURCHASE AGREEMENTS– The Funds, along with other affiliated funds, may transfer uninvested cash balances into one or more master repurchase agreement accounts. These balances are invested in one or more repurchase agreements, secured by U.S. Government securities. A custodian bank holds securities pledged as collateral for repurchase agreements until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings.

C.CURRENCY TRANSLATION – The market values of all assets and liabilities denominated in foreign currencies are recorded in the financial statements after translation to the U.S. Dollar based upon the mean between the bid and offered quotations of the currencies against U.S. Dollars on the date of valuation. The cost basis of such assets and liabilities is determined based upon historical exchange rates. Income and expenses are translated at average exchange rates in effect as accrued or incurred.

D.FOREIGN CURRENCY – The Funds may enter into forward purchases or sales of foreign currencies to hedge certain foreign currency denominated assets and liabilities against declines in market value relative to the U.S. Dollar. Forward currency contracts are marked-to-market daily and the change in market value is recorded by the Funds as an unrealized gain or loss. When the forward currency contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the forward currency contract at the time it was opened and value at the time it was closed. Investments in forward currency contracts may expose the Funds to risks resulting from unanticipated movements in foreign currency exchange rates or failure of the counter-party to the agreement to perform in accordance with the terms of the contract.

Reported net realized foreign exchange gains or losses arise from the sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Funds’ books, and the U.S. Dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate. The Funds include foreign currency gains and losses realized on the sale of investments together with market gains and losses on such investments in the statement of operations.

36

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS – (CONTINUED)

June 30, 2008 (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)

E. FEDERAL INCOME TAXES – It is each Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income, including any net realized gains on investments not offset by loss carryovers, to shareholders. Therefore, no provision for federal income or excise tax is required. The Adviser has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years and has concluded that as of June 30, 2008, no provision for income tax would be required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue. At June 30, 2008, Selected American Shares had approximately $79,000 of post October 2007 foreign currency losses which were deferred. At June 30, 2008, Selected Special Shares had post October 2007 losses of approximately $807,000 available to offset future capital gains, if any, which expire in 2016. At June 30, 2008, Selected American Shares had available for federal income tax purposes unused capital loss carryforwards as follows:

	SELECTED AMERICAN SHARES
Expiring:
12/31/2012	$	29,605,000
12/31/2013		69,420,000
Total	$	99,025,000

F.USE OF ESTIMATES IN FINANCIAL STATEMENTS – In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

G.INDEMNIFICATION – Under the Funds’ organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, some of the Funds’ contracts with its service providers contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against the Funds cannot be determined and the Funds have no historical basis for predicting the likelihood of any such claims.

H.SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME - Securities transactions are accounted for on the trade date (date the order to buy or sell is executed) with realized gain or loss on the sale of securities being determined based upon identified cost. Dividend income is recorded on the ex-dividend date. Dividend income from REIT securities may include return of capital. Upon notification from the issuer, the amount of the return of capital is reclassified to adjust dividend income, reduce the cost basis, and/or adjust realized gain/loss. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned.

37

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS – (CONTINUED)

June 30, 2008 (Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)

I.DIRECTORS/TRUSTEES FEES AND EXPENSES - The Funds set up a Rabbi Trust to provide for the deferred compensation plan for independent Directors/Trustees that enables them to elect to defer receipt of all or a portion of annual fees they are entitled to receive. The value of an eligible Director’s/Trustee’s account is based upon years of service and fees paid to each Director/Trustee during the years of service. The amount paid to the Director/Trustee under the plan will be determined based upon the performance of the Selected Funds.

J. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to shareholders are recorded on the ex-dividend date. Net investment income (loss), net realized gains (losses), and net unrealized appreciation (depreciation) of investments may differ for financial statement and tax purposes primarily due to differing treatments of wash sales, foreign currency transactions, passive foreign investment company shares and redesignation of distributions. The character of dividends and distributions made during the fiscal year from net investment income and net realized securities gains may differ from their ultimate characterization for Federal Income Tax purposes. Also, due to the timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which income or realized gain was recorded by the Funds. The Funds adjust the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations.

NOTE 2 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES

Advisory fees are paid monthly to the Adviser. The annual rate for Selected American Shares is 0.65% on the first $500 million of average net assets, 0.60% on the next $500 million, 0.55% on the next $2 billion, 0.54% on the next $1 billion, 0.53% on the next $1 billion, 0.52% on the next $1 billion, 0.51% on the next $1 billion, 0.50% on the next $3 billion, and 0.485% of the average net assets in excess of $10 billion. The annual rate for Selected Special Shares is 0.70% on the first $50 million, 0.675% on the next $100 million, 0.65% on the next $100 million, and 0.60% of average net assets in excess of $250 million. Advisory fees paid during the six months ended June 30, 2008, approximated 0.53% and 0.69% of average net assets for Selected American Shares and Selected Special Shares, respectively. The annual rate for the Selected Daily Government Fund is 0.30% of average net assets.

Boston Financial Data Services, Inc. ("BFDS") is the Funds’ primary transfer agent. The Adviser is also paid for certain transfer agent services. The fee paid to the Adviser for the six months ended June 30, 2008 was $88,623, $3,992 and $1,058 for Selected American Shares, Selected Special Shares, and Selected Daily Government Fund, respectively. State Street Bank and Trust Company (“State Street Bank”) is the Funds’ primary accounting provider. Fees for such services are included in the custodian fee as State Street Bank also serves as the Funds’ custodian. Certain Directors/Trustees and Officers of the Funds are also Directors/Trustees and Officers of the general partner of the Adviser. The Adviser is contractually committed to waive fees and/or reimburse Selected Daily Government Fund’s expenses to the extent necessary to cap total annual operating expenses at 0.75% for Class S shares. During the six months ended June 30, 2008, such reimbursements amounted to $4,250. Certain Directors/Trustees and Officers of the Funds are also Directors/Trustees and Officers of the general partner of the Adviser.

Davis Selected Advisers – NY, Inc. (“DSA-NY”), a wholly-owned subsidiary of the Adviser, acts as sub-adviser to the Funds. The Funds pay no fees directly to DSA-NY.

38

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS – (CONTINUED)

June 30, 2008 (Unaudited)

NOTE 3 - DISTRIBUTION SERVICE FEES

For services under the distribution agreement, the Funds’ Class S shares pay an annual fee of 0.25% of average daily net assets. For the six months ended June 30, 2008, Selected American Shares, Selected Special Shares, and Selected Daily Government Fund incurred distribution services fees totaling $8,806,166, $43,467, and $6,115, respectively.

There are no distribution service fees for the Funds’ Class D shares.

NOTE 4 - PURCHASES AND SALES OF SECURITIES

Purchases and sales of investment securities (excluding short-term securities) during the six months ended June 30, 2008 were as follows:

	SELECTED AMERICAN SHARES		SELECTED SPECIAL SHARES
Cost of purchases	$	1,014,019,386	$	17,279,097
Proceeds of sales	$	1,175,826,572	$	29,797,774

39

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS – (CONTINUED)

June 30, 2008 (Unaudited)

NOTE 5 - CAPITAL STOCK

At June 30, 2008, there were 600 million shares of capital stock of Selected American Shares ($1.25 par value per share) authorized. At June 30, 2008, there were 50 million shares of capital stock of Selected Special Shares ($0.25 par value per share) authorized. At June 30, 2008, there were unlimited shares of capital stock of Selected Capital Preservation Trust ($0.10 par value per share) authorized. Transactions in capital stock were as follows:

CLASS S	Six months ended June 30, 2008 (Unaudited)
	SELECTED AMERICAN SHARES		SELECTED SPECIAL SHARES		SELECTED DAILY GOVERNMENT FUND
Shares sold		17,566,028		87,188		1,288,389
Shares issued in reinvestment of distributions		–		–		60,379
		17,566,028		87,188		1,348,768
Shares redeemed		(18,367,687)		(613,466)		(1,325,808)
Net increase (decrease)		(801,659)		(526,278)		22,960
Proceeds from shares sold	$	792,155,634	$	956,602	$	1,288,389
Proceeds from shares issued in reinvestment of distributions		–		–		60,379
		792,155,634		956,602		1,348,768
Cost of shares redeemed		(821,590,936)		(6,739,003)		(1,325,808)
Net increase (decrease)	$	(29,435,302)	$	(5,782,401)	$	22,960

CLASS S	Year ended December 31, 2007
	SELECTED			SELECTED			SELECTED DAILY
	AMERICAN			SPECIAL			GOVERNMENT
	SHARES			SHARES			FUND
Shares sold		33,124,919			582,123			2,085,184
Shares issued in reinvestment of distributions		1,568,572			361,672			213,751
		34,693,491			943,795			2,298,935
Shares redeemed		(38,625,009	)		(1,451,787	)		(3,339,033	)
Net decrease		(3,931,518	)		(507,992	)		(1,040,098	)
Proceeds from shares sold	$	1,581,496,343		$	8,295,415		$	2,085,184
Proceeds from shares issued in reinvestment of distributions		75,291,387			4,470,268			213,751
		1,656,787,730			12,765,683			2,298,935
Cost of shares redeemed		(1,851,989,586	)		(20,718,722	)		(3,339,033	)
Net decrease	$	(195,201,856	)	$	(7,953,039	)	$	(1,040,098	)

40

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS – (CONTINUED)

June 30, 2008 (Unaudited)

NOTE 5 - CAPITAL STOCK - (CONTINUED)

CLASS D	Six months ended June 30, 2008 (Unaudited)
	SELECTED AMERICAN SHARES		SELECTED SPECIAL SHARES		SELECTED DAILY GOVERNMENT FUND
Shares sold		7,630,464		116,058		3,967,788
Shares issued in reinvestment of distributions		–		–		1,693,418
		7,630,464		116,058		5,661,206
Shares redeemed		(8,496,529)		(382,857)		(3,162,557)
Net increase (decrease)		(866,065)		(266,799)		2,498,649
Proceeds from shares sold	$	343,901,319	$	1,278,001	$	3,967,788
Proceeds from shares issued in reinvestment of distributions		–		–		1,693,418
		343,901,319		1,278,001		5,661,206
Cost of shares redeemed		(378,486,226)		(4,193,030)		(3,162,557)
Net increase (decrease)	$	(34,584,907)	$	(2,915,029)	$	2,498,649

CLASS D	Year ended December 31, 2007
	SELECTED			SELECTED			SELECTED DAILY
	AMERICAN			SPECIAL			GOVERNMENT
	SHARES			SHARES			FUND
Shares sold		17,162,498			607,975			8,024,258
Shares issued in reinvestment of distributions		1,198,605			839,842			5,084,102
		18,361,103			1,447,817			13,108,360
Shares redeemed		(8,979,476	)		(541,032	)		(6,575,278	)
Net increase		9,381,627			906,785			6,533,082
Proceeds from shares sold	$	817,082,583		$	8,644,057		$	8,024,258
Proceeds from shares issued in reinvestment of distributions		57,533,014			10,372,055			5,084,102
		874,615,597			19,016,112			13,108,360
Cost of shares redeemed		(432,610,430	)		(7,618,582	)		(6,575,278	)
Net increase	$	442,005,167		$	11,397,530		$	6,533,082

NOTE 6 - EXPENSES PAID INDIRECTLY

Under an agreement with the custodian bank, each Fund’s custodian fees are reduced for earnings on cash balances maintained at the custodian by the Funds. During the six months ended June 30, 2008, such reductions amounted to $2,185,$479, and $14 for Selected American Shares, Selected Special Shares, and Selected Daily Government Fund, respectively.

41

SELECTED FUNDS

NOTES TO FINANCIAL STATEMENTS – (CONTINUED)

June 30, 2008 (Unaudited)

NOTE 7 - SECURITIES LOANED

Selected American Shares (the “Fund”) has entered into a securities lending arrangement with UBS Securities LLC. Under the terms of the agreement, the Fund receives fee income from lending transactions; in exchange for such fees, UBS Securities LLC is authorized to loan securities on behalf of the Fund, against receipt of collateral at least equal to the value of the securities loaned. As of June 30, 2008, the Fund did not have any securities on loan. The Fund bears the risk of any deficiency in the amount of the collateral available for return to a borrower due to a loss in an approved investment.

NOTE 8 – BANK BORROWINGS

Each Fund may borrow up to 5% of its assets from a bank to purchase portfolio securities, or for temporary and emergency purposes. The purchase of securities with borrowed funds creates leverage in the Fund. Each Fund has entered into an agreement, which enables it to participate with certain other funds managed by the Adviser in an unsecured line of credit with a bank, which permits borrowings up to $50 million, collectively. Interest is charged based on its borrowings, at a rate equal to the overnight Federal Funds Rate plus 0.75%. The Funds had no borrowings outstanding for the six months ended June 30, 2008.

NOTE 9 - ILLIQUID SECURITIES

Securities may be considered illiquid if they lack a readily available market or if valuation has not changed for a certain period of time. The aggregate value of illiquid securities in Selected Special Shares amounted to $845,600 or 0.80% of the Fund’s net assets as of June 30, 2008. Securities are as follows:

						Valuation per
		Acquisition		Cost per		Share as of
Fund	Security	Date	Shares	Share		June 30, 2008
Selected Special	Oaktree Capital Group LLC,
Shares	Class A	05/21/07	30,200	$	42.10	$	28.00

42

SELECTED FUNDS

FINANCIAL HIGHLIGHTS

The following financial information represents selected data for each share of capital stock outstanding throughout each period:

				Income (Loss) from Investment Operations
		Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gains (Losses)		Total from Investment Operations
Selected American Shares Class S:
	Six months ended 06/30/20088	$	47.78		0.18	3	$	(5.54)	$	(5.36)
	Year ended 12/31/2007		46.06		0.49	3		1.72		2.21
	Year ended 12/31/2006		40.24		0.30	3		5.81		6.11
	Year ended 12/31/2005		36.87		0.31			3.34		3.65
	Year ended 12/31/2004		33.17		0.26			3.71		3.97
	Year ended 12/31/2003		25.51		0.22			7.65		7.87
Selected American Shares Class D:
	Six months ended 06/30/20088		47.79		0.25	3		(5.55)		(5.30)
	Year ended 12/31/2007		46.07		0.63	3		1.73		2.36
	Year ended 12/31/2006		40.23		0.45	3		5.81		6.26
	Year ended 12/31/2005		36.86		0.41	3		3.35		3.76
	Period from 05/03/20046 to 12/31/2004		34.12		0.18			2.91		3.09
Selected Special Shares Class S:
	Six months ended 06/30/20088		12.30		0.02	3		(2.10)		(2.08)
	Year ended 12/31/2007		13.98		–	3,5		(0.17)		(0.17)
	Year ended 12/31/2006		12.47		(0.03)	3		2.22		2.19
	Year ended 12/31/2005		12.44		0.02			1.03		1.05
	Year ended 12/31/2004		11.70		0.05			1.26		1.31
	Year ended 12/31/2003		8.61		(0.04	)		3.60		3.56
Selected Special Shares Class D:
	Six months ended 06/30/20088		12.30		0.04	3		(2.11)		(2.07)
	Year ended 12/31/2007		13.98		0.05	3		(0.17)		(0.12)
	Year ended 12/31/2006		12.46		0.02	3		2.23		2.25
	Year ended 12/31/2005		12.42		0.05	3		1.04		1.09
	Period from 05/03/20046 to 12/31/2004		11.97		0.05			1.00		1.05

43

Dividends and Distributions
Dividends from Net Investment Income		Distributions from Realized Gains		Distributions in Excess of Net Investment Income		Distributions in Excess of Net Realized Gains		Return of Capital		Total Distributions		Net Asset Value, End of Period		Total Return1		Net Assets, End of Period (000,000 omitted)		Ratio of Expenses To Average Net Assets				Ratio of Net Investment Income (Loss) to Average Net Assets
																		Gross		Net4
$	–	$	–	$	–	$	–	$	–	$	–	$	42.42	(11.22)	%	$	6,714	0.90	%7	0.90	%7	0.79	%7
	(0.49)		–		–		–		–		(0.49)		47.78	4.79			7,602	0.90		0.88		1.01
	(0.29)		–		–		–		–		(0.29)		46.06	15.19			7,509	0.90		0.90		0.72
	(0.28)		–		–		–		–		(0.28)		40.24	9.90			7,978	0.90		0.90		0.81
	(0.26)		–		–		–		(0.01)		(0.27)		36.87	11.97			6,660	0.92		0.92		0.76
	(0.20)		–		–		–		(0.01)		(0.21)		33.17	30.90			5,978	0.94		0.93		0.80
	–		–		–		–		–		–		42.49	(11.09)			4,427	0.58	7	0.57	7	1.12	7
	(0.64)		–		–		–		–		(0.64)		47.79	5.11			5,020	0.57		0.57		1.32
	(0.42)		–		–		–		–		(0.42)		46.07	15.59			4,407	0.58		0.58		1.04
	(0.39)		–		–		–		–		(0.39)		40.23	10.19			1,675	0.61		0.60		1.11
	(0.34)		–		–		–		(0.01)		(0.35)		36.86	9.08			681	0.65	7	0.65	7	1.10	7
	–		–		–		–		–		–		10.22	(16.91)			30	1.19	7	1.19	7	0.37	7
	(0.01)		(1.50)		–		–		–		(1.51)		12.30	(1.27)			42	1.17		1.17		(0.03)
	(0.11)		(0.57)		–		–		–		(0.68)		13.98	17.74			55	1.16		1.16		(0.20)
	(0.13)		(0.89)		–		–		–		(1.02)		12.47	8.45			68	1.16		1.12		0.11
	(0.04)		(0.53)		–		–		–		(0.57)		12.44	11.34			91	1.17		1.17		0.37
	–		(0.47)		–		–		–		(0.47)		11.70	41.40			96	1.21		1.21		(0.39)
	–		–		–		–		–		–		10.23	(16.83)			76	0.83	7	0.83	7	0.73	7
	(0.06)		(1.50)		–		–		–		(1.56)		12.30	(0.89)			94	0.81		0.81		0.33
	(0.16)		(0.57)		–		–		–		(0.73)		13.98	18.19			95	0.83		0.83		0.13
	(0.16)		(0.89)		–		–		–		(1.05)		12.46	8.83			55	0.87		0.86		0.37
	(0.07)		(0.53)		–		–		–		(0.60)		12.42	8.91			20	0.91	7	0.91	7	0.86	7

44

SELECTED FUNDS

FINANCIAL HIGHLIGHTS – (CONTINUED)

				Income (Loss) from Investment Operations
		Net Asset Value, Beginning of Period		Net Investment Income (Loss)		Net Realized and Unrealized Gains (Losses)		Total from Investment Operations
Selected Daily Government Fund Class S:
	Six months ended 06/30/20088	$	1.000	$	0.013	$	–	$	0.013
	Year ended 12/31/2007		1.000		0.044		–		0.044
	Year ended 12/31/2006		1.000		0.043		–		0.043
	Year ended 12/31/2005		1.000		0.025		–		0.025
	Year ended 12/31/2004		1.000		0.007		–		0.007
	Year ended 12/31/2003		1.000		0.005		–		0.005
Selected Daily Government Fund Class D:
	Six months ended 06/30/20088		1.000		0.014		–		0.014
	Year ended 12/31/2007		1.000		0.048		–		0.048
	Year ended 12/31/2006		1.000		0.045		–		0.045
	Year ended 12/31/2005		1.000		0.027		–		0.027
	Period from 05/03/20046 to 12/31/2004		1.000		0.007		–		0.007

Portfolio Turnover2 (for all classes of shares)	Six months ended June 30,		Year ended December 31,
	20088		2007		2006		2005		2004		2003
Selected American Shares	9	%	8	%	9	%	4	%	3	%	8	%
Selected Special Shares	15	%	36	%	41	%	53	%	30	%	46	%

45

Dividends and Distributions
Dividends from Net Investment Income		Distributions from Realized Gains		Distributions in Excess of Net Investment Income		Distributions in Excess of Net Realized Gains		Return of Capital		Total Distributions		Net Asset Value, End of Period		Total Return1		Net Assets, End of Period (000,000 omitted)		Ratio of Expenses To Average Net Assets				Ratio of Net Investment Income (Loss) to Average Net Assets
																		Gross		Net4
$	(0.013)	$	–	$	–	$	–	$	–	$	(0.013)	$	1.000	1.27	%	$	5	0.93	%7	0.75	%7	2.53	%7
	(0.044)		–		–		–		–		(0.044)		1.000	4.50			5	0.97		0.75		4.41
	(0.043)		–		–		–		–		(0.043)		1.000	4.33			6	0.67		0.67		4.28
	(0.025)		–		–		–		–		(0.025)		1.000	2.57			100	0.68		0.67		2.54
	(0.007)		–		–		–		–		(0.007)		1.000	0.73			107	0.68		0.68		0.72
	(0.005)		–		–		–		–		(0.005)		1.000	0.54			113	0.67		0.67		0.54
	(0.014)		–		–		–		–		(0.014)		1.000	1.45			113	0.39	7	0.39	7	2.89	7
	(0.048)		–		–		–		–		(0.048)		1.000	4.85			110	0.41		0.41		4.75
	(0.045)		–		–		–		–		(0.045)		1.000	4.61			104	0.40		0.40		4.55
	(0.027)		–		–		–		–		(0.027)		1.000	2.75			11	0.50		0.50		2.71
	(0.007)		–		–		–		–		(0.007)		1.000	0.74			5	0.44	7	0.44	7	1.21	7

¹  Assumes hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns for periods of less than one full year are not annualized.

²  The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation.

 

³ Per share calculations were based on average shares outstanding for the period.

⁴  The ratios in this column reflect the impact, if any, of the reduction of expenses paid indirectly and of certain reimbursements from the Adviser.

 

⁵ Less than $0.005 per share.

 

⁶ Inception date of class.

 

⁷ Annualized.

 

⁸ Unaudited.

See Notes to Financial Statements

46

SELECTED FUNDS

FUND INFORMATION

Portfolio Proxy Voting Policies and Procedures

The Funds have adopted Portfolio Proxy Voting Policies and Procedures under which the Funds vote proxies relating to securities held by the Funds. A description of the Funds’ Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Funds toll-free at 1-800-243-1575, (ii) on the Funds’ website at www.selectedfunds.com, and (iii) on the SEC’s website at www.sec.gov.

In addition, the Funds are required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30^th, no later than August 31^st of each year. The Funds’ Form N-PX filing is available (i) without charge, upon request, by calling the Funds toll-free at 1-800-243-1575, (ii) on the Funds’ website at www.selectedfunds.com, and (iii) on the SEC’s website at www.sec.gov.

Form N-Q

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available without charge, upon request, by calling 1-800-243-1575 or on the Funds’ website at www.selectedfunds.com or on the SEC’s website at www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

47

SELECTED FUNDS

DIRECTOR APPROVAL OF ADVISORY AGREEMENTS

Process of Annual Review

The Board of Directors of the Selected Funds oversees the management of each Selected Fund and, as required by law, determines annually whether to approve the continuance of each Selected Fund's advisory agreement with Davis Selected Advisers, L.P. and sub-advisory agreement with Davis Selected Advisers-NY, Inc. (jointly “Davis Selected Advisers” and “Advisory Agreements”).

As a part of this process the Independent Directors, with the assistance of counsel for the Independent Directors, prepared questions submitted to Davis Selected Advisers in anticipation of the annual contract review. The Independent Directors were provided with responsive background material (including the most recent investment performance data available), and their counsel provided guidance, prior to a separate contract review meeting held in April 2008 where the Independent Directors reviewed and evaluated all information which they deemed reasonably necessary in the circumstances. Upon completion of this review, the Independent Directors found that the terms of the Advisory Agreements are fair and reasonable and that continuation of the Advisory Agreements was in the best interests of each of the Funds and their shareholders.

Reasons the Independent Directors Approved Continuation of the Advisory Agreements

The Independent Directors’ determinations were based upon a comprehensive consideration of all information provided to the Independent Directors and were not the result of any single factor. The following facts and conclusions were important, but not exclusive, in the Independent Directors’ recommendation to renew the Advisory Agreements.

The Independent Directors considered not only the investment performance of each Fund, but also the full range and quality of services provided by Davis Selected Advisers to each Fund and their shareholders, including whether it:

1. Achieves satisfactory investment results over the long-term after all costs;

2. Handles shareholder transactions, inquiries, requests, and records efficiently and effectively, and provides quality accounting, legal, and compliance services, and oversight of third party service providers; and

3. Fosters healthy investor behavior.

Davis Selected Advisers is reimbursed a portion of its costs in providing some, but not all, of these services.

A shareholder’s ultimate return is the product of a fund’s results, as well as the shareholder’s behavior, specifically in selecting when to invest and which fund to invest in. The Independent Directors concluded that, through its actions and communications, Davis Selected Advisers has attempted to have a meaningful, positive impact on investor behavior.

Davis Selected Advisers and members of the Davis family are some of the largest shareholders in the Selected Funds. The Independent Directors concluded that this investment tends to align Davis Selected Advisers’ and the Davis family’s interests with other shareholders, as they face the same risks, pay the same fees, and are highly motivated to achieve satisfactory long-term returns. In addition, the Independent Directors concluded that significant investments by Davis Selected Advisers and the Davis family have contributed to the economies of scale, which have lowered fees and expenses for Selected Funds’ shareholders over time.

48

SELECTED FUNDS

DIRECTOR APPROVAL OF ADVISORY AGREEMENTS – (CONTINUED)

Reasons the Independent Directors Approved Continuation of the Advisory Agreements – (Continued)

The Independent Directors observed that Davis Selected Advisers has consistently demonstrated an orientation in line with shareholders. Davis Selected Advisers and the Selected Funds have continued to receive recognition in the press, and among industry observers and participants, for the quality of its investment process, its shareholder orientation, and integrity.

The Independent Directors noted the importance of reviewing quantitative measures, but also recognized that qualitative factors could be equally, or more important, in assessing whether Selected Fund shareholders are likely to be well served by the renewal of the Advisory Agreements. They noted both the value and shortcomings of purely quantitative measures, including the data provided by independent service providers, and concluded that while such measures and data can inform, they should not supersede the judgment of the Independent Directors who take many factors, including those listed below, into consideration in representing the shareholders of Selected Funds. In connection with reviewing comparative performance information, the Independent Directors generally give weight to longer-term measurements.

The Independent Directors expect Davis Selected Advisers to employ a disciplined, company-specific, research driven, businesslike, long-term investment philosophy.

The Independent Directors recognized Davis Selected Advisers’ (a) efforts to minimize transaction costs by generally having a long-term time horizon and low portfolio turnover; (b) focus on tax efficiency; (c) record of generally producing satisfactory after tax results over longer-term periods; (d) efforts towards fostering healthy investor behavior by, among other things, providing informative and substantial educational material; and (e) efforts to promote shareholder interests by actively speaking out on corporate governance issues.

The Independent Directors reviewed (a) comparative fee and expense information for other funds, as selected and analyzed by a nationally recognized independent service provider; (b) information regarding fees charged by Davis Selected Advisers to other advisory clients, including funds which it sub-advises and private accounts, as well as the differences in the services provided to such other clients; and (c) the fee schedules of each of the Funds, including an assessment of competitive fee schedules, and review of breakpoints, if applicable.

The Independent Directors reviewed the management fee schedule for each of the Funds, profitability of the Funds to Davis Selected Advisers, the extent to which economies of scale might be realized if a Fund’s net assets increase, and whether the fee level reflects those potential economies of scale. The Independent Directors considered the nature, quality and extent of the services being provided to the Funds and the costs incurred by Davis Selected Advisers in providing such services. The Independent Directors considered various potential benefits that Davis Selected Advisers may receive in connection with the services it provides under the Advisory Agreements with the Funds, including a review of portfolio brokerage practices. The Independent Directors noted that Davis Selected Advisers does not use client commissions to pay for publications that are available to the general public or for third-party research services.

49

SELECTED FUNDS

DIRECTOR APPROVAL OF ADVISORY AGREEMENTS – (CONTINUED)

Selected American Shares

The Independent Directors noted that longer-term performance is the most relevant. Selected American Shares Class S out-performed its benchmark, the Standard & Poor’s 500^® Index, and exceeded the average performance of its peer group for the 1-year, 3-year, 5-year, and 10-year periods. Class D shares have been in existence for a shorter time period and out-performed its benchmark and exceeded the average performance of its peer group for the 1-year and 3-year periods.

The Independent Directors reviewed the rolling 5-year performance of Selected American Shares. Since 1993, when Davis Selected Advisers began managing the Fund, the Fund has beaten the Index in 8 out of 10 rolling 5-year periods ending in December of each year. The first rolling 5-year period began December 31, 1993 and ended December 31, 1998.

The Independent Directors considered the total expense ratio for Selected American Shares, noting that it is reasonable and lower than the expense ratios of its peer group. The Independent Directors considered the advisory fee schedule for Selected American Shares and noted that it is within the range and below the average of its peer group.

The Independent Directors concluded that the advisory fee schedule represents an appropriate sharing between Selected American Shares shareholders and Davis Selected Advisers of such economies of scale as may exist in the management of the Fund at current asset levels.

Selected Special Shares

The Independent Directors noted that longer-term performance is the most relevant. Selected Special Shares Class S out-performed its benchmark, the Russell 3000^® Index, over the 5-year and 10-year periods but under-performed the Index over the 1-year and 3-year periods. Selected Special Shares Class S exceeded the average performance of its peer group over the 5-year period and trailed over the 1-year, 3-year, and 10-year periods. Class D shares have been in existence for a shorter-time period and under-performed both its benchmark and the average performance of its peer group for the 1-year and 3-year periods.

Since 2001, when Davis Selected Advisers began actively managing Selected Special Shares, the Fund has beaten the Index in both of the rolling 5-year periods ending in December of each year. Davis Selected Advisers began managing Selected Special Shares on a daily basis on June 1, 2001. The first rolling 5-year period began December 31, 2001 and ended December 31, 2006.

The Independent Directors considered the total expense ratio for Selected Special Shares, noting that it is reasonable and lower than the expense ratios of its peer group. The Independent Directors considered the advisory fee schedule for Selected Special Shares and noted that it is within the range and below the average of its peer group.

The Independent Directors concluded that the advisory fee schedule represents an appropriate sharing between Selected Special Shares shareholders and Davis Selected Advisers of such economies of scale as may exist in the management of the Fund at current asset levels.

50

SELECTED FUNDS

DIRECTOR APPROVAL OF ADVISORY AGREEMENTS – (CONTINUED)

Selected Daily Government Fund

Selected Daily Government Fund Class S exceeded the average performance of its peer group for the 1-year, 3-year, and 5-year periods and matched the performance for the 10-year period. Class D have been in existence for a shorter-time period and exceeded the average performance of its peer group for the 1-year and 3-year periods.

The Independent Directors considered the total expense ratio for Selected Daily Government Fund, noting that it is reasonable and lower than the expense ratios of its peer group. The Independent Directors considered the advisory fee schedule for Selected Daily Government Fund and noted that it is within the range and below the average of its peer group.

The Independent Directors concluded that the fixed advisory fee schedule represents an appropriate sharing between Selected Daily Government Fund’s shareholders and Davis Selected Advisers of such economies of scale as may exist in the management of the Fund at current asset levels.

Approval of Advisory Arrangements

The Independent Directors concluded that Davis Selected Advisers had provided Selected American Shares, Selected Special Shares, and Selected Daily Government Fund and their shareholders a reasonable level of both investment and non-investment services. The Independent Directors further concluded that shareholders have received a significant benefit from Davis Selected Advisers’ shareholder oriented approach, as well as the execution of its investment discipline.

The Independent Directors determined that the advisory fees for Selected American Shares, Selected Special Shares, and Selected Daily Government Fund were reasonable in light of the nature, quality and extent of the services being provided to the Funds, the costs incurred by Davis Selected Advisers in providing such service, and in comparison to the range of the average advisory fees of its peer group, as determined by an independent service provider. The Independent Directors found that the terms of the Advisory Agreements are fair and reasonable and that continuation of the Advisory Agreements is in the best interests of each Fund and its shareholders. The Independent Directors and the full Board of Directors therefore voted to continue the Advisory Agreements.

51

SELECTED FUNDS

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

DIRECTORS

For the purposes of their service as directors to the Selected Funds, the business address for each of the directors is 2949 E. Elvira Road, Suite 101, Tucson, AZ 85756. Each Director serves until retirement, resignation, death, or removal. Directors must retire from the Board of Directors and cease being a Director at the close of business on the last day of the calendar year in which the Director attains age 75.

Name (birthdate) Position(s) Held With Fund Term of Office and Length of Time Served Principal Occupation(s) During Past Five Years Number of Portfolios in Fund Complex Overseen by Director Other Directorships Held by Director

Independent Directors

William P. Barr (5/23/50)	Director	Director since 1994	Executive Vice President and General Counsel, Verizon (formerly GTE Corporation before it merged with Bell Atlantic) since July 1994.	3	Director, Holcim (U.S.) Inc. (supplier of Portland and blended cements).
Francisco L. Borges (11/17/51)	Director	Director since 2006	Chairman and Managing Partner, Landmark Partners, Inc. (private equity and real estate investment management) since March 1999; former Managing Director, Financial Guaranty Insurance Company; former Treasurer, State of Connecticut.	3	Director, Hartford Foundation for Public Giving; Director, University of Connecticut Foundation, Inc.
Jerome E. Hass (6/1/40)	Director	Director since 1997	Professor of Finance and Business Strategy, Johnson Graduate School of Management, Cornell University; Consultant, National Economic Research Associates; Chief Financial Officer and Co-Owner of B&H Enterprises of Ithaca (hardware store).	3	None
Katherine L. MacWilliams (1/19/56)	Director	Director since 1997	Chief Financial Officer, Gambro BCT, Inc. (a medical device company); former Chief Financial Officer, Coors Brewers Limited, a division of Molson Coors Brewing Company.	3	None
James J. McMonagle (10/1/44)	Director/ Chairman	Director since 1990	Chairman of the Selected Funds Board of Directors since 1997; of Counsel to Vorys, Sater, Seymour and Pease LLP (law firm) since 2002.	3	Director of Owens Corning (producer of residential and commercial building materials).
Richard O'Brien (9/12/45)	Director	Director since 1996	Retired Corporate Economist for Hewlett-Packard Company.	3	None

52

SELECTED FUNDS

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

DIRECTORS - (CONTINUED)

Name (birthdate) Position(s) Held With Fund Term of Office and Length of Time Served Principal Occupation(s) During Past Five Years Number of Portfolios in Fund Complex Overseen by Director Other Directorships Held by Director

Independent Directors – (Continued)

Marsha Williams (3/28/51) Director Director since 1996 Senior Vice President and Chief Financial Officer, Orbitz Worldwide, Inc. (travel-services provider); former Executive Vice President and Chief Financial Officer, Equity Office Properties Trust (a real estate investment trust). 16 Director of the Davis Funds (consisting of 13 portfolios); Director, Modine Manufacturing, Inc. (heat transfer technology); Director, Chicago Bridge & Iron Company, N.V. (industrial construction and engineering).

Inside Directors*

Andrew A. Davis (6/25/63)	Director	Director since 1998	President or Vice President of each Selected Fund and Davis Fund; President, Davis Selected Advisers, L.P., and also serves as an executive officer in certain companies affiliated with the Adviser.	16	Director of the Davis Funds (consisting of 13 portfolios).
Christopher C. Davis (7/13/65)	Director	Director since 1998	President or Vice President of each Selected Fund, Davis Fund and the Clipper Fund; Chairman, Davis Selected Advisers, L.P., and also serves as an executive officer in certain companies affiliated with the Adviser, including sole member of the Adviser’s general partner, Davis Investments, LLC; Employee of Shelby Cullom Davis & Co., a registered broker/dealer.	16	Director of the Davis Funds (consisting of 13 portfolios); Director, Washington Post Co. (newspaper publisher).

* Andrew A. Davis and Christopher C. Davis own partnership units (directly, indirectly, or both) of the Adviser and are considered to be “interested persons” of the Funds as defined in the Investment Company Act of 1940. Andrew A. Davis and Christopher C. Davis are brothers.

53

SELECTED FUNDS

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

OFFICERS

Christopher C. Davis (born 7/13/65, Selected Funds officer since 1998). See description in the section on Inside Directors.

Andrew A. Davis (born 6/25/63, Selected Funds officer since 1998). See description in the section on Inside Directors.

Kenneth C. Eich (born 8/14/53, Selected Funds officer since 1997). Executive Vice President and Principal Executive Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Chief Operating Officer, Davis Selected Advisers, L.P., and also serves as an executive officer in certain companies affiliated with the Adviser.

Douglas A. Haines (born 3/4/71, Selected Funds officer since 2004). Vice President, Treasurer, Chief Financial Officer, Principal Financial Officer, and Principal Accounting Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Vice president and Director of Fund Accounting, Davis Selected Advisers, L.P.

Sharra L. Haynes (born 9/25/66, Selected Funds officer since 1997). Vice President, Chief Compliance Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Vice President and Chief Compliance Officer, Davis Selected Advisers, L.P., and also serves as an executive officer in certain companies affiliated with the Adviser.

Thomas D. Tays (born 3/7/57, Selected Funds officer since 1997). Vice President and Secretary of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Vice President, Chief Legal Officer and Secretary, Davis Selected Advisers, L.P., and also serves as an executive officer in certain companies affiliated with the Adviser.

Arthur Don (born 9/24/53, Selected Funds officer since 1991). Assistant Secretary (for clerical purposes only) of each of the Davis Funds and Selected Funds; Partner, Seyfarth Shaw LLP (a law firm); counsel to the Independent Directors and the Davis Funds.

54

SELECTED FUNDS

2949 East Elvira Road, Tucson, Arizona 85756

Investment Adviser

Davis Selected Advisers, L.P.

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

Distributor

Davis Distributors, LLC

2949 East Elvira Road, Suite 101

Tucson, Arizona 85756

Custodian

State Street Bank and Trust Company

c/o The Selected Funds

One Lincoln Street

Boston, Massachusetts 02111

Transfer Agent

Boston Financial Data Services, Inc.

c/o The Selected Funds

P.O. Box 8243

Boston, Massachusetts 02266-8243

Overnight Address:

30 Dan Road

Canton, Massachusetts 02021-2809

Counsel

Seyfarth Shaw LLP

131 South Dearborn Street, Suite 2400

Chicago, Illinois 60603-5577

Independent Registered Public Accounting Firm

KPMG LLP

707 Seventeenth Street, Suite 2700

Denver, Colorado 80202

For more information about the Selected Funds including management fee, charges and expenses, see the current prospectus, which must precede or accompany this report. The Funds’ Statement of Additional Information contains additional information about the Funds’ Directors and is available without charge upon request by calling 1-800-243-1575 or on the Funds’ website at www.selectedfunds.com. Quarterly Fact sheets are available on the Funds’ website at www.selectedfunds.com.

55

ITEM 2. CODE OF ETHICS

Not Applicable

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

The registrant’s board of directors has determined that independent trustee Katherine MacWilliams qualifies as the “audit committee financial expert”, as defined in Item 3 of form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not Applicable

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS

Not Applicable

ITEM 6. SCHEDULE OF INVESTMENTS

Not Applicable. The complete Schedule of Investments is included in Item 1 of this for N-CSR

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not Applicable

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not Applicable

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES AND AFFILIATED PURCHASERS

Not Applicable

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no changes to the procedure by which shareholders may recommend nominees to the registrant’s Board of Trustees.

ITEM 11. CONTROLS AND PROCUDURES

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3 (c) under the Investment Company Act of 1940, as amended) are effective as of a date within 90 days of the filing date of this report.

(b) There have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls.

ITEM 12. EXHIBITS

(a)(1) Not Applicable

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached.

(a)(3) Not Applicable

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SELECTED AMERICAN SHARES, INC.

By	/s/ Kenneth C. Eich
	Kenneth C. Eich
	Principal Executive Officer

Date: September 5, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/s/ Kenneth C. Eich
	Kenneth C. Eich
	Principal Executive Officer

Date: September 5, 2008

By	/s/ Douglas A. Haines
	Douglas A. Haines
	Principal Financial Officer

Date: September 5, 2008