ON MIKE’S MIND
Value First.
Value always
I was first introduced to Warren Buffett when I was a finance student by my professor Gerry Boyles who became one of my most important friends and mentors.
Years later, golfing with Coach Lou Holtz, Mr. Buffett’s name came up again and he challenged me to read his work more deeply.
I did.
That’s when I made the good decision to buy my first share of Berkshire Hathaway.
I recently reread “The Essays of Warren Buffett” by Lawrence Cunningham (who has been known to read our CoInvestor Newsletter) which only reinforced my long-held appreciation of value investing.
Today, as we look to both grow he Co/Investor Club into new asset classes, I want to assure you of our continued commitment to the principles of value investing.
As a mark of that commitment, I’m going to send a copy of this book to the first 25 that email me at mp@coinvestorclub.com
There are great opportunities awaiting us all as an investing community and I look forward to our growth together.
— Mike
THE MARKETS
After last weekend’s dramatic tariff standoff, equity markets took a hard dive on Friday. Here is the week…
S&P 500: +1.31%, DJIA: +0.48%, NASDAQ Composite: +1.45%
After an initial spike, the VIX gradually fell throughout the week, settling at 16.48
The 10-year yield fell 2.4 basis points this week to 4.489
Treasury Secretary Bessent cleared the air that Trump is concerned with the 10-year and not the Fed Funds rate
Cryptocurrencies were also battered this week in the face of uncertainty
BTC: -5.54%, ETH: -21.23%, XRP: -21.67%
Stories The Club is Watching
WISE WORDS
"Surround yourself with people who are smarter than you."
- Charlie Munger, “Poor Charlie’s Almanac”
Reflections on the Week…
Ah, another week, another cycle of Elon Musk headlines. Love him or hate him, the self-styled Tech Czar turned Special Government Employee has once again ignited both financial and political realms. True to its name, DOGE has been operating lean and fast, supported by a small team of ambitious young professionals and driven by Musk’s signature firebrand energy. It leaves us wondering—how much short-term pain is worth the long-term vision?
Musk has used the same strategy before. When he took over the social media platform, he slashed headcount and rescinded policies built up over the years. Many critics called this reckless. Either way, the result was a drastic transformation—one that seemed chaotic at the time, but just recently, we were given our first glimpse into X's new financial position.
Banks are looking to sell off $5.5 billion in X-related debt at 90 to 95 cents on the dollar, compared to 2022’s valuation of 60 cents on the dollar. Three years ago, the company was losing money at an unsustainable rate. While far from perfect, X is no longer the financial black hole it once was, going from an EBITDA of $184.92 million in 2021 to $1.2 billion last year. Furthermore, xAI’s Grok provides investors with a bullish view of the future of AI, something to latch onto.
The federal government, unlike X, isn’t subject to market forces in the same way. Bureaucracy is designed to resist rapid disruption, favoring stability and continuity over efficiency. Employees can’t simply be let go en masse, policies can’t be scrapped overnight, and political considerations rather than market forces bind public service. Musk’s aggressive tactics at X may have produced financial improvements, but applying the same philosophy to governance is like expecting a battleship to maneuver like a speedboat—one is built for rapid pivots, the other for resilience in rough waters.
So, what should investors take away from this? Let me introduce you to this quote from one of the founders of the great Scout Capital:
“Process shouldn’t mean just doing the same thing over and over again because that’s how we’ve always done it. What it means is that we’ve collectively agreed as a research team on a way to proceed, including what we need to know and how we’re going to communicate. You need process to engage collectively in any complex project – done right, it fosters learning and collaboration that results in better decisions.” - Adam Weiss
Right now, Musk and Trump are still in the "data collection" phase of their efficiency experiment—the read-only mode of their larger ambitions. Whether their findings will lead to real structural improvements or just more turbulence remains to be seen. However, for investors worried about macroeconomic stability, one thing is clear: the U.S. government isn’t X, and the Treasury isn’t running on a startup budget. The full faith and credit of the United States remains intact, and the Treasury will continue to serve as the foundation of the global financial system.
The Savvy Investor…
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Publisher’s Note:
Musk and Trump are whipsawing our attention, which seems to be a strategy more than happenstance.
Markets don’t love uncertainty, as the indexes show.
Behind the scenes, though, at the Co/Investor Club, we have been speaking with CEOs and Lead Investors about opportunities in the private markets.
And we confident that the opportunities are many.
Midweek, Mike gave a brief overview of where the Co/Investor Club is going. He reiterated that the Club is - as it always has been - committed to helping our members make better investment decisions.
He reviewed how he was able to acquire the Hooters with co-investors and discussed his role on the Finance Committee of the Coastal Carolina University endowment fund.
He welcomed you to upgrade to Premium Membership - which you can do here. And he reminded you of the NEW benefits of Premium Membership, including:
the EXCLUSIVE ability to invest in upcoming fund opportunties
the ability to participate in co/investment rights in syndicated deals
access to Lunch at the Club Zoom meetings with leading investors
the advantage of leveraging our broad relationships in the industry, getting you access to investments most others will never see
He also invited you to write him directly with any questions about the benefits of becoming a Premium Member at mp@coinvestorclub.com
Please go here to learn more about the many benefits of becoming a Premium Member of the Club now - while we still have our 83% discount for current subscribers.
Have a great weekend!
— Adam
If you have not already upgraded your membership…
Chat with Mike
Whether you’re an executive with investment opportunities or a college student looking to network, we would love to chat with you! Email our Founder, Mike Pruitt, at mp@coinvestorclub.com with questions and ideas or schedule a meeting.
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