ON MIKE’S MIND
The G.O.A.T. is leaving the stage.
Warren Buffett. My inspiration and teacher.
An American legend, as you no doubt know.
For the record…
Exceptional Investment Track Record: Under Warren Buffett, Berkshire Hathaway’s compounded annual growth rate of its stock was about 20% from 1965 to 2022, far outperforming the S&P 500.
Massive Growth in Book Value: The per-share book value of Berkshire Hathaway grew from $19 in 1965 to over $470,992 for Class A shares by the end of 2022, reflecting Buffett's effective value investing philosophy.
Significant Acquisitions: Buffett led Berkshire Hathaway in multiple high-profile acquisitions including Clayton Homes, Precision Castparts, and massive stakes in blue-chip companies such as Apple, Coca-Cola, and American Express.
Philanthropic Commitment: Warren Buffett pledged to donate over 99% of his wealth to philanthropic causes. He is a primary figure in the Giving Pledge, urging billionaires to donate at least half of their wealth to charity.
Diversified Portfolio Management: Under his leadership, Berkshire Hathaway owns a variety of businesses across different sectors, including insurance (GEICO), rail transport (BNSF), utilities, manufacturing, and services, showcasing strategic diversification.
Consistent Shareholder Communication: Buffett is renowned for his straightforward and insightful annual shareholder letters, where he distills complex financial insights into comprehensible advice useful for investors at all levels.
Resilience Through Market Fluctuations: Buffett’s leadership has steered Berkshire Hathaway through numerous economic downturns, including the 2008 financial crisis, with strategic investments that capitalized on market fear, like his timely investments in Goldman Sachs and Bank of America.
Cultural Impact and Influence: Known as the "Oracle of Omaha," Buffett's investment strategies and business philosophies have influenced generations of investors and business leaders globally, making him one of the most respected and studied figures in business.
I bow to this man - his integrity, his grit, his investing principles and his consistency through the rough winds of navigating the markets.
I have long been a solid value investor and The Co/Investor Club will continue to keep value investing at the core of what we do.
Let us all offer thanks for Mr. Buffett for his example and let us all profit together.
The smart way.
To Our Co/Success,
Mike
THE MARKETS
No news is good news; no major changes in tariffs or downside surprises aided markets across the spectrum this week
S&P 500: +3.74%, DJI: +2.99%, NASDAQ Composite: +5.01%
A strong jobs report this week kept yields up on the tail end of this week
The 2-year rose 6 basis points to 3.82, while the 10-year fell 5 basis points to 4.31
The Fear and Greed Index is encroaching on Neutral territory once more as volatility continues to cool
A fairly calm week in crypto as BTC holds steady in the mid-90s
BTC: +1.72%, ETH: +1.37%, XRP: +1.16%
WISE WORDS
“The rich invest in time, the poor invest in money.”
-Warren Buffett
In Case You Missed It…
59 Years… 59 years ago, Warren Buffett acquired Berkshire Hathaway. In his career, they transformed a failing textile company into a financial giant. They purchased Coke, GEICO, Apple, Duracell, and Dairy Queen, all at valuable prices. Their work helped inspire me, my colleagues, and an uncountable number of investors worldwide to pursue valuable companies at a reasonable price.
In November 2023, legendary investor Charlie Munger passed away. And in the subsequent annual meeting, his presence was dearly missed. Yesterday, it may have been the final shareholder meeting with Warren Buffett. He announced his retirement at yesterday’s meeting, and I wish Greb Abel the best of luck; he might possibly have the biggest shoes to fill.
In case you missed it… this is likely the final shareholder’s meeting for Warren Buffett, and we hope you enjoy.
Reflections on the Week…
With a week of relative calm in markets, the absence of noise offered a rare gift: space to think.
Markets didn’t crash, yields didn’t spike, and for once, central bankers seemed content to let the data speak. After the first 100 days of Trump’s presidency, it felt like the first moment I could breathe.
With that space came the opportunity to explore ideas typically drowned out by noise. That’s when I came across an intriguing video on a new and controversial life investing theory.
This paper posits two key details: the merits of fixed income investing have been greatly exaggerated, and a greater focus on international exposure significantly de-risks a portfolio from unforeseen turbulence in its domestic economy.
To be clear, this isn’t the first time that 100% equity portfolios have been pitched to me, nor is it the first time that international exposure has been hyped for its diversification merits. Still, it is one of the first times I have seen a strong analytical approach to the theory.
It’s a bold claim that fixed income’s role in portfolio construction may be more psychological than practical, especially over multi-decade horizons. Interestingly, this idea made me think of Buffett and the criticism he has received regarding his portfolio.
Berkshire is now 5% of the U.S. Treasuries market, a staggering figure that reflects confidence in U.S. credit quality and a reluctance to deploy capital hastily.
“The stock market is a device for transferring money from the impatient to the patient.” - Warren Buffett
Watch this video from the most recent shareholders’ meeting. As Buffett explains, their balance sheet isn’t a retreat; it’s positioning. Holding that much in Treasuries isn’t an endgame — it’s dry powder.
And we’re already seeing where it might flow. While U.S. valuations have grown increasingly stretched, Berkshire has quietly accumulated sizable stakes in Japanese trading houses, doubling down on companies like Itochu, Mitsubishi, and Mitsui.
Buffett has called it a “treasure hunt,” and it’s a telling move.
This shift toward international opportunity isn’t unique to Berkshire, it's a pattern we’ve been tracking closely. In our recent piece, Off the Radar, we briefly discussed how international microcaps remain overlooked, inefficient, and often structurally mispriced. These aren’t lottery tickets — they’re businesses with real cash flow, growing addressable markets, and limited institutional ownership.
And yet, they trade at fractions of their intrinsic value simply because the world isn’t watching. As we put it: “Internationally, there’s no shortage of value—only a shortage of comfort.”
Weeks like this don’t come around often — quiet, steady, with just enough breathing room to think a little more clearly. As Munger said, “Take a simple idea, and take it seriously.”
And whether or not you’re sold on this new controversial life investing theory, it’s not a bad gut check. Sometimes the most useful thing we can do is sit and question our core investing philosophy, and maybe, just maybe, we find a way to generate just a tad bit more alpha than we did before.
The Savvy Investor…
Massif Capital’s Q1 Letter to Shareholders
Kohl’s and Incredibrew’s CEOs are a new Romeo and Juliet
Hedge Funds betting against American Exceptionalism
A Big Earnings Week brings Big Lessons
Publisher’s Note: On Virtue
How much do you believe in America?
I’ve been thinking about that a lot recently.
I profoundly love this country, despite its historical shadows.
And by the freakin’ way, name one country that has no historical shadows.
For that matter, name one PERSON who has no historical shadows!
You?
Me?
Nope.
My great-grandparents escaped the pogroms of Ukraine and Russia in the 1890s with nothing.
Zero.
My grandfather rose to become the EVP of a MAJOR American corporation and eventually lived on Central Park West in a three bedroom palatial apartment with a sunken living room overlooking Tavern on the Green. I would watch the Thanksgiving Day balloons pass right by our window. Yes- the Ghostbuster building on 62nd St.
He was the very picture of properness, elegance and success.
And - here’s the shadow part - he had to hide his Jewish identity his entire professional life or he never would have been promoted from the floor.
My father and grandfather fought in both world wars, proudly, for the United States. My dad was an avid historical reader and huge civil war buff and gave me “Grant” as a middle name after his hero - U.S. Grant. (My mother says, in her mind, it was secretly for Cary Grant, though. I’ll take either).
But I grew up in the 70s and from TV, absorbed so much negativity about “the man.” I watched the fading, awful Viet Nam war on the nightly news, the protests. Riots. Our President resigning in humiliation. I learned about injustice. Somehow I learned that the rich are greedy and unkind.
Too much Dickens, maybe?
70’s Hippie hangover?
But you know what?
The negativity I absorbed was NOTHING compared to the crap I see on campuses and social media today.
I spent the late 80s and early 90s doing graduate work at Stanford and I saw the tsunami coming then. I remember a spoiled co-PhD student railing that “this institution is nothing but another oppressive institution!”
I snapped back - “don’t you realize you have the FREEDOM to say it’s an oppressive instiution. You don’t know what real oppression is!”
There, like everybody, I did a deep study of cultural Marxism - Adorno, Benjamin, Horkheimer, Marcuse - the Frankfurt school that has defined the University world’s cultural criticism of the last 40 years.
And while they had valuable critiques of the human cost of industry, I remember losing friends by calling their only permissible critical lens - race, class, gender - “the new Holy Trinity.”
Purism.
It is an ever-present temptation - and fanaticism is the inevtiable result.
Me?
I prefer good ol’ American practicalism.
Give me Madison. Twain. Dewey. Eisenhower…. and Buffett.
These days, so many Americans, coddled in decades of grand entrepreneurial wins don’t know what real oppression is. They don’t know what real tyranny is. They don’t know what real evil is. They definitely don’t know the definition of “genocide.”
They are rife with performative empathy.
By contrast, Warren Buffett, to me, exemplifies many of the virtues of America. Sobriety. Patience. Intelligence cultivated and applied. Generosity. Transparency. Honesty. Not to mention, wit and humor.
It is possible to be a man of mostly virtue.
Ain’t nobody perfect.
Ain’t no country perfect.
Ain’t no culture perfect.
But if, as a nation, we can live the virtues of folks like Warren Buffett, we will continue to be a powerful positive force in the world.
Not perfect.
Maybe not good enough for myopic TikTok self-appointed pundits.
But positive.
I sure hope so.
Because the alternatives out there? China? Iran? Hamas? Russia?
There, the shadow is the very thing.
And they are dark, foreboding shadows indeed.
Adam
Publisher
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