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Conversion, self-to-adversion, 7.0

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Looking at life through the eyes of a tire hoe

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Eating seeds is a test time activity

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The toxicity of our city, of our city

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No!

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Body on the world!

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Body on the solar!

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Disorder, disorder.

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Now somewhere between the sacred silence, sacred silence and sleep.

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Somewhere between the sacred silence and sleep.

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Disorder, disorder, disorder.

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Woo!

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We are back.

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True North, episode 37.

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and navigating the storm. Here we go. We're going to get into it. We're going to have some fun

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tonight. We've got a bunch of people on the stream and let's let them on and we will start.

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Stop sharing my screen here. We've got grain. Okay. Tonight we've got myself, Soleil, Dan Hillary,

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Mason, Ben Workman, and Grain of Salt. We are going to get into it and we are going to get

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after it. Obviously a lot going on in the market, a ton of noise, and this is the exact reason why

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True North exists. True North exists. What is true north? If this is your first time watching

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because you're concerned or talking about the markets, true north is the goal is to be the

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investment grade Bitcoin podcast, talking about Bitcoin backed securities, Bitcoin backed credit,

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their view in the market, experiences operating in capital markets. We'll talk about risk. We'll

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talk about volatility. We'll talk about interest rates, macro environment, all those things,

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and also market sentiment, which is becoming more and more important within today's trading

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environment. So typically we start with leverage. We're going to start with a bit of housekeeping.

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And so the first thing I want to bring up here is actually we're going to start with Tim.

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Ladies and gentlemen, what you're about to hear may be amazing, but it is not financial advice.

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It's for informational and educational purposes only.

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Jeff?

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Thank you, Tim.

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None of this is financial advice.

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And the next part I wanted to talk about is that we do not force anybody to watch this show.

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We are here sharing information and our perspectives on the market, the marketplace, and we've got people monitoring the chat.

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If you are disrespectful in the chat, you will be removed.

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Additionally, the people that are here are operating in the capital markets and working

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in the Bitcoin space and also retail investors and have backgrounds that are very broad.

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The goal of bringing this group together that has very broad backgrounds and perspectives

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is to communicate, effectively provide education of what's actually happening in the market.

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So it's like a master's in corporate finance without actually having to work in corporate

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finance or get educated in corporate finance and the information that we share and the perspective

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perspectives that we share are very unique in that you can only get them you can only get these

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perspectives having worked in these individual capital markets and have worked with bankers and

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worked with different people so it's uh it's separate from or it's different than getting a

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like a true traditional education is one of the things that i had a problem with in the getting

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educated in finance in college, all of my teachers, none of them actually ever worked for finance

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companies. They're all academics and academics don't take on risk. And when you actually work

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in risk markets, you learn a lot more about the marketplace in general than you would without it.

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So that's what we're going to start with and the agenda today. So we're going to go through

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MNAV guidance. We're going to talk about leverage, go into statistics like we do every week.

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We're going to talk about the recent noise with the MNAV guidance and walk through it

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and just talk about some perspectives there.

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Risk and Bitcoin backed credit and the concept of refinancing risk in today's environment.

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The market landscape, capital markets and scale, and then just a general broad discussion.

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We'll see where we go.

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I've been trying to keep these a little bit shorter, but I suspect we're probably going

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to go the full two hours because there's a lot of noise around these topics.

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So first thing I'm going to jump into is the leverage update. And here back to sharing my

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screen. So why do we show this? We show this to give some perspective on what strategy's actual

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balance sheet looks like. You can see this information. Oh, let me fix that. You can see

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this information summarized effectively on strategy's website, but I like to keep track

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of it for my own personal purposes. And as of today, strategy holds 629,376 Bitcoin at a price

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of 114,150. So there's $71 billion, $71.8 billion of assets on the balance sheet. The debt that

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they have on the balance sheet is 8.2 billion. Of that debt, 3 billion of it is trading in the money.

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So it's effectively equity. And they've got 6.3 billion of preferred stock that's got dividends

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associated with it. That's where a lot of this noise recently is coming from. So net capital

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held on balance sheet, if you just back out the debt, they've had $63 billion of net capital on

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their balance sheet. And another way that I'm starting to look at strategy is to look at the

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assets minus the debt minus four years of the preferred dividend, just to think about,

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just start thinking about leverage from a interest coverage ratio perspective.

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So when you're looking at this, the balance sheet, if you are just taking assets minus the debt and

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the preferred stock, you're looking at effectively a 20.4% leverage ratio and an 8.7x debt coverage

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multiple on the entire balance sheet. The reason we point this out is because most balance sheets

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in the market are incredibly levered, 40, 50, 60, 70, 80%, and some even higher. And so when you look

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at just a pure balance sheet perspective, it's incredibly healthy. I also like to have this

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perspective of a 50% drop. What would the balance sheet look like if the assets on the balance sheet

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dropped 50% and the assets go from $71 billion down to $35.9 billion and still would have less

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than a 50% leverage ratio, 40.7% leverage ratio. So they can withstand significant volatility on

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the balance sheet and still be totally fine. Another interesting perspective to look at the

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health of the balance sheet is look at what would the Bitcoin price need to be for the assets to be

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worth less than the debt plus four years of the dividend. So the price of Bitcoin would need to

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go down to $23,236. So basically got to go down 80%, or if there's a 50% drop, it's got to go down

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another 59%. So you guys have anything to add here? Yeah, I have a quick comment. So your

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liability, and let me go back to the regular size screen here. So your 20.4% is you call that

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liability to asset ratio. So what I would do is your calculation is correct. I would say it's five

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to one. And because if you multiply 20 times five, you get a hundred. So anybody that goes to buy a

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house in America and they don't want to pay PMI, you have to put down 20%, which is five to one

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leverage. So that's the normal way to do it. But this is flipped the reverse way. One to five

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leverage. It's one to five. This is flipped the other way. So the leverage is only 20%.

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Whereas when you buy a house, you're five to one leverage. So that's where when you show the 20%,

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percent. Maybe it's better if you show it as a multiple.

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Yeah. Yeah. That's this bottom one, the debt coverage multiple. It's 8.7.

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So this is- It's 8.7. Okay.

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Well, it's only taking the debt component. So it's taking the assets divided by the debt,

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just excluding the preferred stock because it doesn't have a maturity.

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Got it.

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Okay. Got it.

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The coverage multiple is 8.7, which is significantly higher than-

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then it's not incredibly healthy.

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It's not a lot of leverage.

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It's the reverse.

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And that's where I think that sometimes people just don't get it

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because it's backwards from what it is typically when you take out leverage.

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Right.

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Exactly.

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Exactly.

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And I think that's a unique perspective, right?

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It's crazy.

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You see in the market that there's a lot of people yelling,

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oh, this is a Ponzi or there's so much leverage on the balance sheet.

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And you go, you look at the actual numbers and as a shareholder, I'm looking at this balance sheet saying, I wish they would, I wish they were able to get more leverage.

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I want them to get more leverage.

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And it's, it's interesting seeing the dichotomy of people that have no idea what they're talking about.

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And the people that actually know are like, have looked at the numbers and looked at what these, what these products are, which kind of gets this risk component too.

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So Jeff, I'll chime in here on this part. So I think one of the things that you're trying to

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point out here is that MSDR True North, specifically for doing this, we look at these

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ratios and understand them. When you say the term bewilderment, what happens is they look

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at the total debt numbers in nominal terms. They say, oh, he's levering way up in nominal terms,

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and that's your A plus six, that's your $14 billion in debt, correct?

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Yeah. Yeah. Yeah. And like, oh my God, he's got $14 billion in debt. But based upon the equity

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that he has, that's not a lot of debt at all. And it's the inverse of what it should be.

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And so when these people talk about this, they just talk about it as being a big number.

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And it's not a big number in comparison to the equity that he has that he's holding. And I think

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that's the part that people, that's why they're bewilderment because these numbers make no sense

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because this is a very simple concept, but incredibly hard to understand.

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Right, exactly. And if you look at the preferred equity, and a lot of people are,

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and I like to continue to hit on this, and we'll hit on it a little bit more later, but

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the estimated annual dividend from the preferred equity is around $607 million. That's the estimated

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annual dividend. If you just take that times four, it's $2.4 billion. So four years of the dividend

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is $2.4 billion. That equals what? Oh, that's not quite right. It's a fraction, right? It's a

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fraction of the total assets held on the balance sheet. So you could think about this as they're

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effectively refinancing. By having the ATM instruments on the ATM, the shelf ATM registration

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on all of the preferred equity instruments allows them to refinance 24-7, 365 by issuing

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those securities. They can access debt capital very quickly. Typically, if you were to go refinance

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your debt, it's a whole process. You got to go out to the market, you do a presentation,

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here's what I'm doing, here's my credit quality, here's what my business looks like in the future,

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blah, blah, blah, blah, blah. And you got to go spend a lot of human capital, you got to put a

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bunch of resource together, you got to go find the capital markets, you got to go do it,

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and it takes a whole bunch of time. And when you do get refinanced, you get the capital on the door,

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you go pay off the old debt and then you get the new debt, et cetera, et cetera.

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And you keep doing this into perpetuity. This has been done in real estate for 100 years.

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Like refinancing your debt has been done in real estate for 100 plus years.

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Yeah. And I know I keep on jumping in here because this is an important concept to understand.

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In the 2009 financial crisis that hit with the housing market, provided that you had a fixed

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rate loan, let's say you put down 20% of your house, your house shoots up in value,

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and then it drops down. And that 20% that you put down, your house is trading below what you bought

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it. And it takes out that 20% because that loan is not callable, just like in this case,

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these are not callable instruments that he has, and they're not collateralized by the Bitcoin

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that's there. But as long as you're able to make principal and interest payments on your house,

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you would not lose your house. The reason why the financial crisis took this out,

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and the reason why this is not a problem for strategy was because those loans reset, they were

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adjustable rate loans. And in this case, this is not what's going on. These are all fixed rate

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PREFs, right? That the yield drops as the price of the underlying instrument goes up,

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which is the exact opposite of what happened during the financial crisis. And so this is a

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very simple concept that people just can't understand. And so is that fair the way that

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I said that, Jeff? Jeff Lerner

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Yeah, yeah, no, no.

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Jeff Lerner

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very fair.

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Grant, you've been studying prefs all weekend?

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No, you know, I want to tell you something.

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I watched-

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He's back from the track and he's deep in the prefs again.

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Yeah, you're in the books, Grant.

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I'm not a bond trader.

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I'm a stock guy.

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So, I watched your videos.

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Okay, somebody wants to know, who do I listen to?

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I listen to Dan Hillary.

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I listen to Jeff Wall.

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I listen to Ben Workman.

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But Dan's been killing it with these videos recently and I watch them.

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If I don't understand something, I watch it a second time.

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And so Dan has been putting out this great information and then it sinks into my head.

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But I want I want the people on this call to be able to understand if you cannot if you don't understand it, where you can explain it to somebody else in simple terms in two minutes, then you don't understand it.

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And so that's why I see this. And Jeff, you use the term bewilderment.

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I can't watch CNBC because these people, they're like, oh, he's got $14 billion of debt.

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For fuck's sake, as a percentage of what is going out there, it's only 20%.

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And they cannot understand simple terms.

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I don't know how much easier I can make this.

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Yeah.

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Yeah, exactly.

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I think somebody brought this up here.

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And so somebody asked, it's a fraction of the net capital, but strategy is never selling the Bitcoin to pay for dividends.

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That is correct. So the balance sheet leverage, despite it being healthy, isn't relevant.

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I think that's incorrect. And I'll tell you why. I think that is incorrect. Because if you look at

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this, right, you've got two point, if you take four years of the dividends on the preface, you've

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got $2.4 billion of dividend payment, which represents 3.4% of the value of the assets.

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if the assets didn't move at all, the assets move 0%, you would theoretically only have to sell off

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3.4% of the assets in order to pay that dividend liability. What is that number? That number is a

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representation of financial strength. You can go out, what I'm trying to emphasize here is they're

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able to go back out to the market and raise more capital in perpetuity to pay off this

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based on their financial strength. But the position that they have on the balance sheet,

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the assets that they have on the balance sheet and the relative compound annual growth rate of the

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assets on the balance sheet This is like the whole concept When somebody underwriting your loan like a loan for a house they look at all your assets they look at all your debt and they tell you whether or not you can afford more debt And as Graeme aptly pointed out you can take five to one leverage to go buy a house

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Now you look at the opposite, one to five leverage on a corporate balance sheet holding $71 billion of capital.

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Anybody, anybody is going to give them more capital.

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The debt markets are going to give them more capital if they provide instruments that the market can digest.

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anybody is going to give them more capital if they can understand the risk they could understand

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the risk profile and that is what this entire strategy team is doing is they're going to talk

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about what is the risk profile here if the risk of bitcoin going to zero is is dropped off the table

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like if if you don't think bitcoin's going to zero the there's such a fat positive tail here on

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Bitcoin, the asset itself. And you've got that, you know, generating more returns on your balance

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sheet in perpetuity. So like, that's the concept. They're like refinancing 24 seven, 365 at speed,

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which is an innovation that's never existed before.

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So that $2.4 billion, right? So four years of the PREF dividends. What's your guess

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at what that is as a percentage of daily trading volume?

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$2.4 billion as a percentage of daily trading volume. That's probably 20% of daily trading

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volume. It's higher than that. It's 50%. So it's 50% of one day's trading volume if I average the

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last 30 days of trading. So it just tells you, yes, there's the security of the assets that are

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over collateralizing all this, but you've still also, and I know we'll get to the common ATM

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because that's certainly going to be a topic for a while here. But when you've got that type of

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liquidity in your common equity, where you're talking about half of the volume of one trading

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day of the year, resulting in four years of estimated annual dividend payment cash.

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So now you combine those two. Not only are you wildly over collateralized with the Bitcoin,

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you've also got another asset, which is the common equity that you can utilize

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and pretty easily given how liquid it is to raise that capital to fund these.

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So now you shrink that risk even further.

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So I think when people look at this, yeah, the narrative out there that happens a lot

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is about how highly leveraged this is and he's playing a dangerous game of chicken with leverage.

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But the leverage right now is so low and they have so many tools at their disposal

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to cover these obligations right now.

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And because these are perpetuals, there's no principal repayment on these.

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So what they're managing for is the annual dividend obligation.

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So that's what they're starting to manage now,

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particularly as converts roll off over time and they clear that off the balance sheet.

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Guys, I'm curious.

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So you guys are in the market more than me.

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You're talking with the big bankers, the highfalutin individuals.

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Does this objection come up a lot that they're over leveraged?

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uh yeah it's what it's what they see in news sources like every conversation well not every

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conversation a lot of the conversations I've had thus far most people just don't even know what's

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going on in this space they haven't even heard of it I haven't even heard of MSTR like let alone

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leverage, leverage on MSTR. So we got to start at square one of a Bitcoin, you know, a Bitcoin

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treasury company. So that's been one of the biggest surprises to me. And then we talk about leverage,

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and you talk about balance sheet, then you talk about strength, then you talk about securitization,

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you talk about risk profile, then talk about volatility. It's like the education curve here is

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so big. It's so big. Everybody that's been here watching this stock for the last eight months,

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You have eight months of education moat.

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When you go to the banks in particular, and when you look at a lot of these transactions

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that are getting closed, you're going to start seeing a lot of repeat banks showing up.

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So there's a few bankers out there that have taken the time to start getting educated in this space.

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And because of that, they're the ones that are able to push these transactions.

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I would tell you it's becoming less where I'm hearing the concerns about the leverage from the banking community.

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But when you go and do media and they start talking to you about the questions that they want to talk about,

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it almost always goes back and you almost always see the phrase dangerous leverage almost every time you go there.

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So that's the narrative most people are seeing is what comes out through the media.

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and you know there's still definitely a learning curve in the banks i've been very surprised

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by how slow they've been to pick up in this space particularly because of the incentive structure

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for them right i mean these companies are a home run as an investment banker if you're one of these

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investment bankers that really starts to understand this space and you know how to structure the

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products and you know the right timing to structure the products and how to price them to move them

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within the institutional investor community. These are career maker companies. If you become

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the preferred banker for, say, the three to five largest of these that are going to be issuing

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securities regularly, you've got a continuous pipeline of bonuses effectively coming in for

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closing these transactions. So this is massive in that community. So I've been very surprised

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by how little engagement there's been. And I think a lot of that was because

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for the longest time, it was really one company. And that company already had bankers and they

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were already getting moved into the bulge bracket by the time that they'd scaled.

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And once you're in the bulge bracket, all the mid-tier banks, they know, right? A lot of them

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will always tell you, we want to be your banker until Goldman Sachs comes and takes over. And

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then they're just happy to let you go work with Goldman Sachs or Marcus Stanley or one of these

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really big banks. So it has been really enlightening to have those conversations,

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to hear it. It's evolved, but not as quickly as I thought it would, given the insight to that group.

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Yeah. And another interesting thing I hear a lot, I hear it from specifically my friends at,

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my friends of friends at JP Morgan and Goldman Sachs, and they say, but these are analysts,

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you know, young guys, whatever. Why does MSTR trade a premium? A lot of these guys are on the

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deal teams of the, you know, convertible pricing, convertible notes. They're just,

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you know, they're trying to figure it out. Why does MSTR trade a premium? I mean,

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should we start to square one? Like, I think that's a really good,

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that's the only objection I hear prior to their over leverage.

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And I would say they go hand in hand. When someone asks me,

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why is MSDR traded premium? I say, you know, from square one, I go, well,

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they have leverage in capital structure. If you think Bitcoin's going up,

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that awards a premium, that warrants a premium.

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So I think those two things are kind of interesting to talk about together.

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Yeah. And they control the leverage. So Ben,

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your point about the liquidity and Jeff,

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your point about the ease at which they can just go out and raise capital with the preferreds.

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They don't have that hurdle of convertible bond deals anymore. They're completely vertically

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integrated. They don't depend on anyone. If they want more leverage, they have more leverage on

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demand. If they want to delever, they can delever on demand. And it's kind of like Elon says the

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best part is no part, the best process is no process. And they're just eliminating all of

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these external dependencies and they basically just control their own destiny at this point.

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Yeah, I would say that's the state they're trying to get to. Right now, I think you've been seeing

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that the ramp up in some of the prefs has been probably a little slower than a lot of people

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would have expected. And because that ATM was getting used and the liquidity was so good that

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even if they were taking a small percentage of the daily volume, it was delevering them really,

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really quickly. And so now, you know, now they're getting all the tools out in market and they have

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them now. Now they just need to scale them. And I think that was, you know, part of what originally

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brought them to create the guidance that they did was an acknowledgement that they got 2D levered,

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right? I mean, they were down, I don't know if they got to sub 10, but they were at like 11%

293
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at one point or something. It was really low. And, you know, so they were getting 2D levered

294
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And they needed to find a way to ease off that because the more and more that they were using the common stock ATM, yes, they were acquiring a ton of Bitcoin.

295
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And that's going to result in a ton of Bitcoin dollar gains here down the road with everything that they accumulated.

296
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But it was dragging that leverage down and they couldn't put the leverage on quick enough to be able to sustain that.

297
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So that was why in the past I always thought that we would start to see a convert pop in periodically to kind of inject that leverage as they were getting to delevered.

298
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But then these prefs came out and they launched way more of these prefs than I thought they would.

299
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You know, you see the first one come out, you think maybe there will be two or three.

300
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And, you know, within a few months, we've already got four.

301
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So, you know, they got these into the market.

302
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They got the ATMs open and they're moving towards the point where they're now going to control their own destiny.

303
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And to your point, be able to build leverage on demand.

304
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So as these scale, I think that'll be helpful.

305
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But it seems, you know, the market gave them a little slap on the wrist here this week.

306
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And so we'll see what that means in terms of any announcements that they put out next week with Bitcoin purchases and where that capital came from.

307
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Yeah. So I want to talk about leverage ratio for a second.

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So and we talk about banks for basically deposits.

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It's according to ChatGPT real quickly.

310
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You only need to have 4% tier capital.

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So if you only have 4% in tier one capital in your bank and you're loaning out, that means your ratio is 25 to 1.

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And this is, you know, 1 to 5.

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And so what happens is in order to understand a Bitcoin treasury, you need to understand Bitcoin.

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And if you think it's some magical Internet money invented by a fictitious person that nobody knows who it is and you've got this code and you're like, and who sets the price of it?

315
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I get that question all the time.

316
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It's consensus driven just like gold.

317
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So if they don't understand Bitcoin, then we apply it to a Bitcoin treasury company like Strategy.

318
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Next thing is, Saylor petitioned the Financial Accounting Standards Board,

319
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changed the way that accounting was done for this for indefinite lived intangible assets.

320
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That was approved in August of 23.

321
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You could have implemented it early in 24 and you had to do it in 2025.

322
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So if there's a chief financial officer that doesn't know what Bitcoin is, doesn't get it,

323
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right, and goes through all these things, doesn't get that a bank is 25 to 1 leverage

324
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because they're only holding 4% in assets.

325
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And then you want them to understand Bitcoin on a balance sheet.

326
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We talk about MNAV, all the KPIs that came out with Bitcoin Torque, Bitcoin Dollar Gain.

327
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And so we have all these new metrics, but they don't even understand the way the system

328
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works today.

329
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And then you got to say, oh, and by the way, accounting laws changed or ruling by FASB.

330
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They're unaware of this.

331
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And you're like, it's not even bewilderment.

332
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They're not able to process what I just said.

333
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And they could be a CFO for 20 years.

334
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And it's like, and so Jeff, you keep on saying, let's educate these people.

335
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They just want to keep their jobs so they could pay their bills and retire in 10 to 15 years.

336
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and they just don't have the mental flexibility

337
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or intellectual curiosity.

338
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And that's why I have a catchphrase,

339
00:27:43,158 --> 00:27:44,398
I'm going to grab a Diet Coke

340
00:27:44,398 --> 00:27:46,918
because I'd rather talk to the younger people

341
00:27:46,918 --> 00:27:47,918
on the call to say,

342
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if you're going to get ahead,

343
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you better understand how Bitcoin works.

344
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You better understand everything we just said

345
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about the macroeconomics.

346
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And then from there,

347
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you can understand a Bitcoin treasury company

348
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because you're not ingrained with the traditional thought

349
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that, oh, it only has to work this way.

350
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And when the ratios are flipped,

351
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and I say it to somebody, they look at me and I have a choice right then and there.

352
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And I keep this inside my head. I cannot say this to somebody that's a CFO of a publicly traded

353
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company that you're the, you might be the dumbest person I've met in the past six months. I just

354
00:28:19,718 --> 00:28:23,998
can't say that out loud. And that's why I have that catchphrase. And I just walk away from them

355
00:28:23,998 --> 00:28:30,958
because there's so much, yeah, there's so much of an intellectual gap here that I cannot bother to

356
00:28:30,958 --> 00:28:36,318
explain this and then when they say what do you mean it's this simple sometimes the hardest thing

357
00:28:36,318 --> 00:28:41,278
to understand is the simplest concept it's it's it's it's going to get wider you're right i mean

358
00:28:41,278 --> 00:28:45,358
this this education's gap is going to get wider it's going to get greater with ai it's going to

359
00:28:45,358 --> 00:28:51,278
get even worse um and so it's like that's why everybody is preaching even sailors like use the

360
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use the ai tools last night i was building a project in ai i was you know dumping files in

361
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there so it could read the files and think like me and i like put some things in there so it's all

362
00:29:00,958 --> 00:29:07,518
um completely agree and one other point i wanted to hit on is that you know again more ponzi comments

363
00:29:07,518 --> 00:29:13,998
in the uh in the thread here this isn't a ponzi because they're buying an asset that's globally

364
00:29:13,998 --> 00:29:20,878
liquid 24 7 365 on an exchange nakamoto went and bought 750 million dollars of bitcoin they just

365
00:29:20,878 --> 00:29:27,998
bought one million dollars per minute and the market ate it up this is this is a huge marketplace

366
00:29:27,998 --> 00:29:34,398
it's not like uh you know one one equity that's trading on one exchange this is otc markets that

367
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are spread broadly and there are many people that are buying this asset this isn't like hot air

368
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of holding some some promise of um an asset that doesn't exist so it's very different um shall we

369
00:29:49,518 --> 00:29:57,198
talk about the elephant in the room mnav guidance sure should we get there mason mason you had a uh

370
00:29:57,198 --> 00:30:07,518
a really good uh explanation of it uh i think so basically in the q2 earnings call which happened

371
00:30:07,518 --> 00:30:17,598
what was it four weeks ago yeah 20 20 days ago july 31st july 31st july 31st 20 days ago

372
00:30:18,238 --> 00:30:25,598
we got some explicit guidance from mstr that they were changing their or they were altering their

373
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ATM strategy to not use the ATM to raise capital between one MNAV and two and a half MNAV. And then

374
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above between two and a half and four, it was strategically use it. And then above four, it was

375
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like, we will, we will use the MSTR ATM. And then it had prices associated with it.

376
00:30:43,438 --> 00:30:44,958
Should we pull up the slide?

377
00:30:44,958 --> 00:30:45,838
Exactly.

378
00:30:45,838 --> 00:30:48,158
Yeah, go for it. If you got it, let's go, let's go for it.

379
00:30:48,158 --> 00:30:54,558
I've got the original one and the revision together. Here we go.

380
00:30:55,598 --> 00:31:02,038
can you guys see this

381
00:31:02,038 --> 00:31:10,258
nope i see everybody else it's our meeting oh god one second guys

382
00:31:10,258 --> 00:31:18,418
i did like that people were calling out that dan put his rally cap on though

383
00:31:18,418 --> 00:31:21,138
he's ready to turn these markets himself if he has to

384
00:31:21,138 --> 00:31:24,798
you guys see this this is the original weird if it works

385
00:31:24,798 --> 00:31:27,638
It's weird if it doesn't work.

386
00:31:27,638 --> 00:31:29,298
The updated guidance.

387
00:31:29,298 --> 00:31:30,138
Yep.

388
00:31:30,138 --> 00:31:42,076
Yep Below the 2 FNAF strategy will not issue on MSTR except for one except to one pay interest on debt obligations and two fund preferred equity dividends the updated guidance was strategy this

389
00:31:42,076 --> 00:31:47,036
was eight it was 16 days later 18 days later guys i think it was august 18th this monday

390
00:31:48,316 --> 00:31:53,116
so that would be august 18th yeah 18 days later strategy will technically issue msdr to pay interest

391
00:31:53,116 --> 00:31:57,436
on debt obligations fund preferred equity dividends and three otherwise deemed advantage

392
00:31:57,436 --> 00:32:04,476
to the company so there are seven words there that changed a lot of people's fates let's uh

393
00:32:05,516 --> 00:32:15,516
take a moment and understand the anxiety that they probably had when they issued that

394
00:32:17,836 --> 00:32:22,796
like what do you think they were thinking about i'll tell you what they weren't thinking about

395
00:32:22,796 --> 00:32:31,176
What they weren't thinking about was a troll like Jim Chanos posting this with Andy Constant, and I'll call him out, doesn't understand anything.

396
00:32:31,436 --> 00:32:37,816
How that guy got where he did, he was very good at what he did to make the money that he did, but Lynn Alden was very nice to him.

397
00:32:38,176 --> 00:32:44,816
And so what happened was Jim Chanos then posted these two things that you just showed, Dan, and said, what's the difference?

398
00:32:44,916 --> 00:32:50,356
And then Andy Constant chimes in on this, and it was the FUD, fear, uncertainty, and doubt.

399
00:32:50,356 --> 00:32:59,576
And I think sometimes, I think they probably thought about it, but they didn't think about what happens when a naysayer like Jim Chanos just says, oh, well, this is it.

400
00:32:59,696 --> 00:33:04,816
And it started a FUD machine that went unstoppable for three days.

401
00:33:05,296 --> 00:33:10,636
And I think that's what people need to think about is that that guy just wants to be short MSTR long Bitcoin.

402
00:33:11,076 --> 00:33:12,736
And you guys fed right into it.

403
00:33:12,956 --> 00:33:18,496
He played the social media really well for a freaking boomer.

404
00:33:20,356 --> 00:33:24,376
So, yeah, go ahead. Go ahead, Ben. You got something there.

405
00:33:24,976 --> 00:33:32,116
I was just going to say, I think one thing you have to consider when you look at any new guidance

406
00:33:32,116 --> 00:33:39,716
is what investor group are you looking at? So, for instance, what you just said right now,

407
00:33:39,716 --> 00:33:45,996
about Chanos and these other guys being on social media, you look at which group are they playing to,

408
00:33:45,996 --> 00:33:50,956
right where are they breaking sentiment and they're breaking sentiment in the retail communities

409
00:33:50,956 --> 00:33:58,096
right you spin up all this energy you tell everyone how wrong they've been you start getting

410
00:33:58,096 --> 00:34:05,636
people panicking what i think people are are overlooking is who are the actual primary

411
00:34:05,636 --> 00:34:13,036
shareholders of this company both the common stock equity the preferred equities the convertible bonds

412
00:34:13,756 --> 00:34:18,476
it's major institutions so i i think the lens you probably have to put this through

413
00:34:19,276 --> 00:34:24,476
is what were they thinking when they saw that guidance right these are the people that are

414
00:34:24,476 --> 00:34:29,356
actually bringing the real capital in and when you see more than four billion dollars a day

415
00:34:29,356 --> 00:34:36,396
trading hands and micro strategy that's not retail right retail not moving this thing around i know

416
00:34:36,396 --> 00:34:43,276
that it's the loudest in retail. And that's because that's the echo chamber that we've

417
00:34:43,276 --> 00:34:48,476
all gotten ourselves into here. We're in that community. But I like to look at it through

418
00:34:49,596 --> 00:34:55,196
what's the lens of their largest partners. So what does a capital group think about this?

419
00:34:55,756 --> 00:34:56,796
This is exactly what I'm talking about.

420
00:34:56,796 --> 00:35:02,876
That guidance, right? I'm not so sure. I think we kind of came into this two wrongs scenario.

421
00:35:02,876 --> 00:35:10,136
right i i think that the first mistake was issuing that guidance to begin with i don't think agreed

422
00:35:10,136 --> 00:35:17,516
very yeah i think that it seemed like a no-brainer to put that out there because people had been

423
00:35:17,516 --> 00:35:22,656
calling for it they started to want some certainty around the way that they were going to treat the

424
00:35:22,656 --> 00:35:30,356
atm and for them they looked at it and said this is pretty you know low risk for us because the

425
00:35:30,356 --> 00:35:34,856
name of the game for us right now is going to be to put the leverage back on right we're trying to

426
00:35:34,856 --> 00:35:39,036
lever back up now so if we're not going to be using the tool to deliver ourselves and it's going to

427
00:35:39,036 --> 00:35:45,856
take us a very long time to issue these prefs to get into the 30 40 leverage range based on the

428
00:35:45,856 --> 00:35:53,656
presentation that they had i think it seemed like an easy handoff win to the community that had been

429
00:35:53,656 --> 00:36:01,056
calling for it. So I think that might have been mistake number one, was actually giving that

430
00:36:01,056 --> 00:36:06,936
guidance. I don't think it was necessary. Things had been performing fine. And then that causes the

431
00:36:06,936 --> 00:36:13,836
second one, which is if you're dealing with these large institutions and they don't like what you're

432
00:36:13,836 --> 00:36:20,816
doing, when you see a sell-off happen, you know, to me, I look at that and go, that's not just a

433
00:36:20,816 --> 00:36:25,976
retail sell-off. That's not people out on X getting upset and selling their shares that's

434
00:36:25,976 --> 00:36:32,076
causing that type of a drawdown. You might be getting your wrist slapped by a large institution

435
00:36:32,076 --> 00:36:37,456
saying they don't appreciate that guidance. And then you've got to reverse and go, well,

436
00:36:37,476 --> 00:36:41,936
it's not exactly what we meant. You know, like kind of walk it back. So you're almost in like

437
00:36:41,936 --> 00:36:46,636
the two wrongs and you've got to learn as you go. And I don't think that there was anything

438
00:36:46,636 --> 00:36:53,396
malicious about this whole transaction. I think people are trying to make this a very

439
00:36:53,396 --> 00:37:00,256
malicious endeavor that happened where people were deeply wronged. I'm not so sure that's how

440
00:37:00,256 --> 00:37:05,796
it played out. I think that they did what they thought was right. They got the feedback that

441
00:37:05,796 --> 00:37:11,776
perhaps it wasn't, and then they had to correct it. And now, I don't know what you do. Do you

442
00:37:11,776 --> 00:37:17,216
correct the correction? I don't know. I don't know what you do from here yet. I think it's a tricky

443
00:37:17,216 --> 00:37:24,056
situation that's going to navigate. But when you see the amount of correction in that market,

444
00:37:24,836 --> 00:37:28,556
to me, that feels like bigger selling than what retail is going to cause.

445
00:37:29,936 --> 00:37:37,216
Thank you, Ben. I want to chime in. So I think this is okay to say. We have a prep call on

446
00:37:37,216 --> 00:37:42,156
Monday nights, always before the Wednesday call. And we talk about what topics we're going to talk

447
00:37:42,156 --> 00:37:47,376
about, who's going to join the call and so forth. And I believe on the call, Jeff, you were talking

448
00:37:47,376 --> 00:37:53,096
about this, is that what Saylor is doing, specifically him and coming up with this,

449
00:37:53,176 --> 00:37:59,376
having a founder-led company, there is no playbook for a Bitcoin treasury company.

450
00:37:59,816 --> 00:38:04,496
They had to build this and they're charting new territory. And I don't remember, was it Ben,

451
00:38:04,496 --> 00:38:09,556
you said or Jeff, one of you two guys said that on the call on Monday. And so what's happening

452
00:38:09,556 --> 00:38:18,076
here is that they're charting new territory. They didn't invent perpetuals, these preferreds,

453
00:38:18,236 --> 00:38:22,176
and they're sorry, the perpetual payments. And so what's happened here is that they're giving

454
00:38:22,176 --> 00:38:28,276
the guidance for something that they built. And from that perspective, just because you can build

455
00:38:28,276 --> 00:38:31,716
something, you don't know what happens when you put it out in the wild. And going back to what you

456
00:38:31,716 --> 00:38:37,376
said about the announcement about the guidance, you take it through legal, you talk to some,

457
00:38:37,456 --> 00:38:41,736
maybe some outside companies, if you can, banks. If you're not allowed to do that,

458
00:38:41,856 --> 00:38:46,416
you put it out there and then you have to pivot. And what we didn't like was this pivot happening

459
00:38:46,416 --> 00:38:53,836
in a short period of time. But realistically, the concept of MNAV, I believe it's either Jeff,

460
00:38:54,016 --> 00:38:59,156
you or Ryan came up with this a year and a half ago, right? The whole concept of multiple net

461
00:38:59,156 --> 00:39:04,036
asset value. And so from that perspective is we have brand new metrics that we talk about.

462
00:39:04,576 --> 00:39:10,696
And then what should that number be? Like PE. We all know that a PE of sub 10 is probably

463
00:39:10,696 --> 00:39:18,476
a pretty low volatility company and not going anywhere. But a PE of 300 is absurd. Or a PE of

464
00:39:18,476 --> 00:39:24,496
zero is crazy. It means there's no earnings per share. But for MNAV, it's all over the range of

465
00:39:24,496 --> 00:39:28,736
where it should be. And I think this is where we're trying to figure out what is the range that

466
00:39:28,736 --> 00:39:33,656
these metrics should play in. And if you give guidance on it, can we hit those objectives?

467
00:39:34,076 --> 00:39:37,996
So I think what I'm trying to say here is that it's kind of hard to figure this out until you

468
00:39:37,996 --> 00:39:44,356
do it. And this is the first company to do it. I think you've also got to, I always try to give

469
00:39:44,356 --> 00:39:50,316
people in this position the benefit of the doubt where I can, because anybody who's in these

470
00:39:50,316 --> 00:39:56,016
positions making decisions this quickly, you're going to have some missteps. Not everything's

471
00:39:56,016 --> 00:40:01,876
going to be perfect. And I do think that they're trying to do this, you know, the right way.

472
00:40:02,836 --> 00:40:06,916
And they thought that putting out that guidance was the right way. And then you also get to the

473
00:40:06,916 --> 00:40:12,096
question, because I've heard people say, well, all they needed to do was wait for a couple of months

474
00:40:12,096 --> 00:40:17,696
before they changed the guidance. And, you know, I'd ask you which one would be more disingenuous

475
00:40:17,696 --> 00:40:23,176
if they knew they were going to change the guidance and didn't do it. Exactly. So they sat on it and

476
00:40:23,176 --> 00:40:28,316
They gave you a couple of months and then they changed it, but they knew months before that,

477
00:40:28,556 --> 00:40:30,356
that they were already going to make that change.

478
00:40:30,536 --> 00:40:31,916
I think that's consideration.

479
00:40:32,216 --> 00:40:35,896
I think they did it as soon as they realized it was a mistake.

480
00:40:36,136 --> 00:40:38,436
Now, clearly timing, not great.

481
00:40:39,436 --> 00:40:41,276
I mean, I would acknowledge that.

482
00:40:42,176 --> 00:40:43,936
That's a tough look.

483
00:40:44,236 --> 00:40:45,416
It's a really tough look.

484
00:40:45,896 --> 00:40:51,896
But I do think that there is a component of this where you're learning on the fly and you put things out

485
00:40:51,896 --> 00:40:57,036
and you run through a presentation and then all of a sudden you get overwhelming feedback on that,

486
00:40:57,476 --> 00:41:03,016
you know, probably behind closed doors and publicly out on the internet. And sometimes

487
00:41:03,016 --> 00:41:09,336
you'll learn that you may have made a mistake there. I don't even think it's verbal feedback.

488
00:41:09,336 --> 00:41:14,716
If you just look at MST or IBIT, we kind of puked after their earnings there.

489
00:41:14,956 --> 00:41:20,296
That's the ultimate feedback, right? Capital gives the feedback, right? Capital is going to move.

490
00:41:20,296 --> 00:41:23,156
And if the capital is upset with something, it's going to move somewhere else.

491
00:41:23,936 --> 00:41:24,016
Yeah.

492
00:41:24,256 --> 00:41:25,296
Yeah, exactly.

493
00:41:25,776 --> 00:41:33,076
At first, I was really pro equity guidance because I thought it was a good idea.

494
00:41:33,116 --> 00:41:37,296
And I think they kind of went through in the earnings call of why it was a good idea.

495
00:41:38,056 --> 00:41:39,836
And it's exactly what Graeme said.

496
00:41:39,956 --> 00:41:43,956
They're flying this ship or flying this plane in the air.

497
00:41:44,256 --> 00:41:48,896
And they're trying to figure out how this works in real time.

498
00:41:48,896 --> 00:41:55,716
And I think what they couldn't account for was the second and third order effects of putting out that equity guidance.

499
00:41:56,036 --> 00:41:59,476
And you don't know how the market's going to respond until you do it.

500
00:41:59,636 --> 00:42:08,216
And I think they are a fairly agile team and they're receptive to all different types of players.

501
00:42:08,316 --> 00:42:12,996
And I think they're just trying to do what they think is best for common shareholders.

502
00:42:13,356 --> 00:42:17,636
So I think at first I was kind of like, you know, what the hell?

503
00:42:17,636 --> 00:42:24,656
but but the more i thought about it the more i looked into what the actual price was doing

504
00:42:24,656 --> 00:42:33,176
what the what the preferreds were doing it made sense to me that the the the pivot was not for

505
00:42:33,176 --> 00:42:42,256
nothing yeah it's it's also entirely possible that that's still their intent but they just needed to

506
00:42:42,256 --> 00:42:49,476
provide themselves with that flexibility to be able to operate and just to keep that as an option.

507
00:42:49,776 --> 00:42:54,576
And maybe that appeases some investors that are upset by the original guidance saying,

508
00:42:54,656 --> 00:42:58,256
you're giving up this tool. This is one of your most powerful tools that you're holding and you're

509
00:42:58,256 --> 00:43:02,956
giving it up. And there's no guarantee that the market's ever going to reward you at a 2.5,

510
00:43:02,956 --> 00:43:08,636
right? That's not necessarily up to you. And so I could see where there would be a reaction

511
00:43:08,636 --> 00:43:12,616
against that type of a move happening.

512
00:43:13,696 --> 00:43:16,216
And you're getting that feedback in real time

513
00:43:16,216 --> 00:43:18,156
and you're trying to make the changes

514
00:43:18,156 --> 00:43:19,976
and capital starts leaving, right?

515
00:43:20,016 --> 00:43:21,896
It started leaving the common stock equity.

516
00:43:22,036 --> 00:43:23,636
It started leaving the preferreds.

517
00:43:23,736 --> 00:43:25,636
I think Dan called out a few times,

518
00:43:25,716 --> 00:43:28,216
it was a little surprising to see

519
00:43:28,216 --> 00:43:30,336
how much capital left the preferreds.

520
00:43:30,336 --> 00:43:31,876
And I think what's going to be really interesting

521
00:43:31,876 --> 00:43:37,016
is when you see new 13Fs start to roll out in the future

522
00:43:37,016 --> 00:43:43,176
and you can start comparing holdings of these institutions over time to see who moved, right?

523
00:43:43,336 --> 00:43:47,316
Who might have been upset by this? Because if you're moving, I think a lot of the, if you

524
00:43:47,316 --> 00:43:51,796
would go look at the prefs, I think a lot of those are going to be held by institutions. Now,

525
00:43:51,856 --> 00:43:55,436
we might not be able to see the moves in some of those because I think some of them haven't had a

526
00:43:55,436 --> 00:44:01,536
reporting cycle yet to be able to measure against. But like Strike, I know that information's out

527
00:44:01,536 --> 00:44:06,896
there. So you'll be able to watch that one and see which capital moved. So, you know, this is

528
00:44:06,896 --> 00:44:14,096
going to be a major, major learning event here for strategy and for everyone else that's watching.

529
00:44:14,816 --> 00:44:19,896
Being the biggest and tripping up gets all the headlines. And the problem with that

530
00:44:19,896 --> 00:44:26,796
is it has ripple effects through the entire ecosystem, right? It wasn't just strategy that

531
00:44:26,796 --> 00:44:31,796
got hit. I mean, it was every Bitcoin treasury company and that Bitcoin started. I mean, it was

532
00:44:31,796 --> 00:44:37,836
just a confluence of red. And so, you know, in August, on top of that, in the middle of August

533
00:44:37,836 --> 00:44:44,956
summer, while the S&P is puking and everybody's like awaiting guidance from the Fed and speculation

534
00:44:44,956 --> 00:44:50,516
everywhere. It was just like horrible timing, like just absolutely horrible timing all around.

535
00:44:50,516 --> 00:44:57,296
Dan, I want to ask you a question and I want you to put your strife hat on.

536
00:44:58,856 --> 00:45:00,196
Let's say you're a strife holder.

537
00:45:00,816 --> 00:45:01,436
I'm all ears.

538
00:45:01,916 --> 00:45:04,836
And you don't believe in MSTR at all.

539
00:45:05,156 --> 00:45:06,656
You're like, this is some bullshit.

540
00:45:07,856 --> 00:45:11,596
But you're a strife holder and you don't believe in MSTR.

541
00:45:11,596 --> 00:45:14,076
But you're like, they've got so much money.

542
00:45:14,156 --> 00:45:15,896
This thing can puke so hard.

543
00:45:16,116 --> 00:45:20,316
And I'm safe because I'm most senior in the capital stack, aside from the converts.

544
00:45:20,516 --> 00:45:22,336
I think if MSDR trades at a premium-

545
00:45:22,336 --> 00:45:22,576
Hold on.

546
00:45:22,936 --> 00:45:23,336
Hold on.

547
00:45:24,496 --> 00:45:27,596
How do you feel about the guidance that they came out with?

548
00:45:29,616 --> 00:45:33,116
I see exactly the question you're trying to ask me, and I know the proper answer.

549
00:45:33,736 --> 00:45:43,416
But I think as a common shareholder myself, I totally understand the reason for which they issued the guidance and took it back,

550
00:45:43,416 --> 00:45:50,416
especially considering that equity issuance creates a larger capital base, a larger collateral base for the preferreds.

551
00:45:50,516 --> 00:45:53,636
That's a huge part of kind of the overall capital structure.

552
00:45:54,076 --> 00:45:57,316
But that's not to say it should affect the price of the preferreds.

553
00:45:57,516 --> 00:46:00,436
If the preferreds are forward looking in their expectations.

554
00:46:00,436 --> 00:46:01,596
What if they just sell, though?

555
00:46:03,236 --> 00:46:03,436
No.

556
00:46:03,436 --> 00:46:05,276
What if they're like, I don't want to be a part of it?

557
00:46:05,276 --> 00:46:06,236
My point's a value point.

558
00:46:06,476 --> 00:46:10,476
If 10x over collateralized isn't enough for Strife to be a creditworthy instrument.

559
00:46:11,996 --> 00:46:13,436
Like, you can't.

560
00:46:13,716 --> 00:46:14,236
What do you want?

561
00:46:14,316 --> 00:46:16,816
You want 20x over collateralized, 30x over collateralized?

562
00:46:17,116 --> 00:46:19,836
You want to ATM it to fucking all hell?

563
00:46:19,836 --> 00:46:26,636
like i'm not saying whatever but my point is is like i think there is a a manage it's balancing

564
00:46:26,636 --> 00:46:32,076
those expectations strife is credit worthy strife is credit it is credit right now as it stands

565
00:46:32,076 --> 00:46:35,196
actually with the converts out of the picture with the converts out of the picture that is the most

566
00:46:35,196 --> 00:46:39,516
credit worthy instrument in the entire market i just looked through the entire was on my interactive

567
00:46:39,516 --> 00:46:45,116
brokers bond screener looking at all the high yield bonds all freaking day and what and what i

568
00:46:45,116 --> 00:46:49,196
was doing i was looking oh okay let's look at jet blues bond they're you know they're 20 31 bonds

569
00:46:49,196 --> 00:46:54,796
yielding 10% between now and 2031. Okay, cool. That's the same as Strife, give or take. What's

570
00:46:54,796 --> 00:46:59,756
their overall capital structure? Well, they have 16 billion worth of assets and 12 billion worth of

571
00:46:59,756 --> 00:47:04,236
debt. It's all short-term debt, but the principal do. Oh, good Lord. And they're a dying business,

572
00:47:04,236 --> 00:47:08,796
and the cash flow doesn't even cover the obligations. So it's a complete disaster,

573
00:47:08,796 --> 00:47:12,396
right? Okay, so Strife is a much more credit-worthy instrument. And then you go out and think, okay,

574
00:47:12,396 --> 00:47:16,556
well, if the common equity trades at a premium, then you know the dividend payments of Strife

575
00:47:16,556 --> 00:47:33,234
are guaranteed They 100 guaranteed If MSDR traded at a discount the coupon payments of Strife are still guaranteed because there would be four sellers of BTC to cover the Strife coupon payments But the fact that MSDR trades at a premium is literally it almost an implicit guarantee

576
00:47:33,234 --> 00:47:35,454
that the Strife coupons will be paid.

577
00:47:35,754 --> 00:47:37,014
So that's the thing I don't understand.

578
00:47:37,334 --> 00:47:41,234
Like there are mispricings between these two securities because they represent a claim

579
00:47:41,234 --> 00:47:41,974
over the same collateral.

580
00:47:42,794 --> 00:47:42,874
Right.

581
00:47:42,974 --> 00:47:44,594
So risk is mispriced globally.

582
00:47:44,974 --> 00:47:46,474
There's $300 trillion of that stuff.

583
00:47:47,214 --> 00:47:47,614
Right.

584
00:47:47,614 --> 00:47:54,874
Right. So Dan, I'm going to reframe what you just said. And that's the video I watched right before this, right? I listened to you.

585
00:47:55,014 --> 00:47:55,494
Go watch it.

586
00:47:55,874 --> 00:48:08,714
Yeah, go. It's awesome. This guy, Dan Hillary, is great. So the point here is, first of all, with JetBlue, if the price of fuel goes up, then they're like screwed or God forbid there's another global COVID thing.

587
00:48:08,714 --> 00:48:11,214
You know, it's like, how do they even pay that?

588
00:48:11,334 --> 00:48:17,694
And so for this perspective, the Bitcoin has the whole monetary network behind of the community of it.

589
00:48:17,974 --> 00:48:19,674
So from that perspective, we don't have to worry about it.

590
00:48:19,954 --> 00:48:21,354
But this is the problem, Dan.

591
00:48:21,814 --> 00:48:29,974
You implicitly understand this at a 25-year veteran level of what you just said.

592
00:48:29,974 --> 00:48:38,794
But the 25-year veteran of existing bond pricing is like 25 years below.

593
00:48:39,154 --> 00:48:49,914
There's like a 50-year spread between the common understanding of bonds, right, the way that they've been functioning for the past 100 years, and what you just described right now.

594
00:48:50,054 --> 00:48:56,714
And the problem is compressing or bringing those people up through education is largely impossible.

595
00:48:56,714 --> 00:49:07,414
So what we have to do is switch to the entities that could buy strife instead of trying to convince these other bondholders to do it.

596
00:49:07,494 --> 00:49:11,474
And the way they do that is by offering this yield and the coupon payment.

597
00:49:11,934 --> 00:49:13,234
So I totally get it.

598
00:49:13,254 --> 00:49:15,614
And by understanding the leverage ratio.

599
00:49:16,254 --> 00:49:20,414
So the takeaway for this is, Dan, you totally get this.

600
00:49:20,534 --> 00:49:21,214
Jeff, you get this.

601
00:49:21,334 --> 00:49:22,014
Ben, you get this.

602
00:49:22,174 --> 00:49:25,714
The problem is, is that they're not even bewildered, Jeff.

603
00:49:25,714 --> 00:49:28,734
They just don't get it.

604
00:49:28,874 --> 00:49:30,054
I don't know how else to say that.

605
00:49:30,054 --> 00:49:33,314
They think that Bitcoin has a probability of going to zero.

606
00:49:33,974 --> 00:49:37,694
And everybody on the screen thinks Bitcoin does not have a probability of going to zero.

607
00:49:38,494 --> 00:49:38,954
That's it.

608
00:49:39,814 --> 00:49:40,374
That's it.

609
00:49:40,834 --> 00:49:41,114
Right.

610
00:49:41,554 --> 00:49:42,834
That's a really good point.

611
00:49:43,434 --> 00:49:50,794
If you take that probability off, the skew of returns for Bitcoin are fat.

612
00:49:51,194 --> 00:49:52,254
Like they break models.

613
00:49:52,374 --> 00:49:53,294
They break risk models.

614
00:49:53,294 --> 00:49:57,694
You can't even, it doesn't fit into anything else.

615
00:49:57,694 --> 00:50:02,334
So what's, but I feel like they issued, so this comes back to the idea of guidance of

616
00:50:02,334 --> 00:50:08,574
BTC over collateralization. They had a little pyramid of strife, strike, stretch, stride,

617
00:50:08,574 --> 00:50:13,774
and the BTC rating on each of those, the target BTC rating, which I think was both an underappreciated

618
00:50:13,774 --> 00:50:20,094
and highly relevant slide in the Q2 earnings report. And we saw that both strife and strike,

619
00:50:20,094 --> 00:50:24,734
or sorry, stretch, have a targeted 10x over collateralization rating of BTC. I think strike

620
00:50:24,734 --> 00:50:29,374
may have been eight and then stride was three or strike was five and then stride was three,

621
00:50:29,374 --> 00:50:33,694
something along those lines. I feel like why wouldn't they, shouldn't common equity issuance

622
00:50:34,574 --> 00:50:39,214
guidance be essentially, we will expand our collateral base to support the given guidance

623
00:50:39,214 --> 00:50:44,574
on BTC credit ratings across all our different securities, right? That would be number one

624
00:50:45,134 --> 00:50:50,574
in changing marketing conditions following bitcoin environment we will bolster the credit worthiness

625
00:50:50,574 --> 00:50:55,934
of the company by issuing common equity to to reinforce these credit ratings which we have

626
00:50:55,934 --> 00:50:59,694
put forth for each of our securities and that's how you know you're buying a different tronch of

627
00:50:59,694 --> 00:51:04,734
risk along the capital stack i think that's kind of how you you you break it up i think you've got

628
00:51:04,734 --> 00:51:08,974
multiple things there i think you're i think you're right and i directionally i think this is moving

629
00:51:08,974 --> 00:51:14,894
that way. I've got a couple perspectives that I would challenge and I think this is an evolution

630
00:51:14,894 --> 00:51:23,294
of how this market moves. BTC rating is great. I think the market will start to move as they

631
00:51:23,294 --> 00:51:28,174
remove converts from their balance sheet, the market will start to move to interest coverage

632
00:51:28,174 --> 00:51:35,534
ratio. How many years of interest do you cover? Not necessarily the debt, the BTC rating itself.

633
00:51:35,534 --> 00:51:39,614
so i think that is a future evolution of like what a future credit rating here looks like

634
00:51:39,614 --> 00:51:46,974
because the number it can non-existent right now it's basically zero they can pay 120 years

635
00:51:47,534 --> 00:51:52,814
they can lever up the capital stack with like 100 liquidation preference over the btc that would be

636
00:51:52,814 --> 00:51:56,734
a game changer for the common equity it would be really scary but it could be highly successful

637
00:51:56,734 --> 00:52:01,534
it would be scary now now here's here's the two here's two elements uh that i think apply to this

638
00:52:01,534 --> 00:52:08,334
mnav situation and kind of your conversation here when anybody buys an equity you have to trust the

639
00:52:08,334 --> 00:52:14,734
company like there is a just general there's an element of trust if you do not want to buy a trust

640
00:52:14,734 --> 00:52:19,134
a product where you have to have trust go buy bitcoin that's something we've talked about from

641
00:52:19,134 --> 00:52:25,774
the very beginning like if you want a trustless asset go buy bitcoin hold it in cold storage i i

642
00:52:25,774 --> 00:52:30,414
think everybody is not financial advice should go through that process in order to have conviction

643
00:52:30,414 --> 00:52:36,014
and what you're holding here, you should understand how Bitcoin works and you should have done a cold

644
00:52:36,014 --> 00:52:40,734
storage Bitcoin transaction. And if you want a no trust system, you could do that. Now, anybody that's

645
00:52:40,734 --> 00:52:49,054
here, if you hold any equity, you have to trust that the team is aligned with you and is going to

646
00:52:49,054 --> 00:52:54,974
operate in best interest of the equity holder. And so there's this trust element. And if you buy

647
00:52:54,974 --> 00:53:01,294
the securities, the credit backed securities, you also have to have another level of trust that

648
00:53:01,294 --> 00:53:07,374
they're going to manage the capital and the collateral ratio, particularly because of the small

649
00:53:09,214 --> 00:53:14,734
component of profitability of their software business. So you've got just multiple layers

650
00:53:14,734 --> 00:53:19,134
and elements of trust that I think can evolve. That's why I'm working in this space. I think

651
00:53:19,134 --> 00:53:24,654
this trust space can evolve drastically. And you think about the, to Ben's point earlier,

652
00:53:24,974 --> 00:53:26,714
how people are involved.

653
00:53:27,394 --> 00:53:29,494
Sailor owns 7.1%.

654
00:53:29,494 --> 00:53:30,534
You know, I'm going to share my screen

655
00:53:30,534 --> 00:53:31,654
because I looked this up

656
00:53:31,654 --> 00:53:33,774
because I was curious too on 13Fs.

657
00:53:34,234 --> 00:53:35,414
And maybe I'll make this a little bigger

658
00:53:35,414 --> 00:53:36,354
so people can see here.

659
00:53:36,734 --> 00:53:40,614
So this is the institutional holders.

660
00:53:41,114 --> 00:53:43,694
This is the top 100 I've got listed in this list here.

661
00:53:44,694 --> 00:53:47,934
The top 10 institutional holders of MSTR

662
00:53:47,934 --> 00:53:51,334
hold $27.6 billion.

663
00:53:53,494 --> 00:53:54,314
That's a lot.

664
00:53:54,314 --> 00:53:55,574
That's a lot of capital.

665
00:53:55,934 --> 00:54:01,674
If any of these guys call you at any point in time and they tell you to jump, the only

666
00:54:01,674 --> 00:54:03,094
response is how high?

667
00:54:04,074 --> 00:54:05,234
How high do you jump?

668
00:54:06,174 --> 00:54:11,774
And that is, I think we've got to take that into consideration.

669
00:54:13,394 --> 00:54:16,014
Again, do I think anything that happened was ideal?

670
00:54:16,014 --> 00:54:23,994
No, but this is like, you think about the scale of Twitter.

671
00:54:24,314 --> 00:54:30,074
and all the people that hold capital on twitter you know i i um i'm not even a blip on this radar

672
00:54:30,874 --> 00:54:35,674
josh and all of his followers a lot of respect to josh but josh and all of his followers like

673
00:54:36,714 --> 00:54:41,034
are not a blip on this radar you go down to the hundredth largest holder here

674
00:54:41,034 --> 00:54:47,434
100th largest holder has 32 million dollars of this stuff and this is what's publicly filed this

675
00:54:47,434 --> 00:54:53,194
is not this is what's publicly filed in the us that doesn't take into consideration um international

676
00:54:53,194 --> 00:54:59,274
sovereign wealth funds or anything anybody that doesn't report in the us so if you just take

677
00:55:00,474 --> 00:55:05,034
sailor and fong which this is actually an interesting data point fong has 1.3 million

678
00:55:05,034 --> 00:55:10,794
shares which about 477 million dollars another interesting data point if you take all of the

679
00:55:10,794 --> 00:55:18,954
institutions and that that file in the us plus sailor and fong you've got 56 of the ownership

680
00:55:18,954 --> 00:55:26,414
there. And you got to trust that they're operating in best interest of the common equity shareholder

681
00:55:26,414 --> 00:55:31,534
and everybody's aligned. So, I mean, we're probably going to get roasted for saying that, but

682
00:55:31,534 --> 00:55:38,134
it is what it is. All equities have a trust element. If you buy Tesla, you got to go trust

683
00:55:38,134 --> 00:55:46,054
that Elon Musk isn't going to start getting into hentai anime porn, which I think is a pretty big

684
00:55:46,054 --> 00:55:51,754
risk right these days. So, you know, that's just that's like, that's where we're at. And

685
00:55:51,754 --> 00:55:56,234
it's just kind of how I see the world. It's like, it's rational. Like you,

686
00:55:56,374 --> 00:55:59,834
you start to take a rational perspective here. And I think the,

687
00:56:00,174 --> 00:56:03,814
they're kind of screwed either way to your point, Ben, you had like,

688
00:56:04,954 --> 00:56:09,614
you like two mistakes. And then how do you, how do you fix it? They're probably just frozen.

689
00:56:09,614 --> 00:56:13,014
And they see everything that's happening in the marketplace right now. They know,

690
00:56:13,014 --> 00:56:15,914
So like Sailor watches this stuff.

691
00:56:16,314 --> 00:56:17,614
You know, everybody sees this stuff.

692
00:56:18,254 --> 00:56:19,374
Yeah, if you're trying to build trust,

693
00:56:19,714 --> 00:56:23,374
like are you going to wait two months to fix a mistake for better optics?

694
00:56:23,874 --> 00:56:25,474
That's not the way to go.

695
00:56:25,734 --> 00:56:27,354
And I didn't like the original guidance.

696
00:56:27,774 --> 00:56:29,914
I actually prefer the revised guidance.

697
00:56:30,274 --> 00:56:32,654
So I'm glad they did it sooner than later.

698
00:56:33,654 --> 00:56:35,034
When I saw the original guidance,

699
00:56:35,374 --> 00:56:37,754
I started feeling real good about my covered calls.

700
00:56:37,854 --> 00:56:38,974
I was like, oh, okay, cool.

701
00:56:39,094 --> 00:56:39,854
I got a framework.

702
00:56:40,094 --> 00:56:42,094
I can just plug it in.

703
00:56:42,094 --> 00:56:47,434
And if I'm feeling good about my covered calls, that means I'm worried about my long calls.

704
00:56:47,434 --> 00:56:50,174
And I know that that was something that they wanted to solve.

705
00:56:50,174 --> 00:56:53,214
Like that was something that they thought they were solving with the guidance.

706
00:56:53,214 --> 00:56:57,274
And I was like, oh no, this was like right up my alley.

707
00:56:57,274 --> 00:57:02,014
And I don't want to feel confident in the covered calls.

708
00:57:02,014 --> 00:57:03,274
Like that's not how you should feel.

709
00:57:03,274 --> 00:57:04,274
You want that uncertainty.

710
00:57:04,274 --> 00:57:17,134
And so the revised one built in that uncertainty of giving the company the ability to do what they need to do for the company without it being too obvious.

711
00:57:17,274 --> 00:57:20,394
So I would have preferred that the whole guidance was proprietary.

712
00:57:20,714 --> 00:57:23,674
Like I don't mind them having guidance and thinking about it.

713
00:57:24,494 --> 00:57:32,594
But it kind of just reminds me of one of my favorite lines from Office Space when they just stopped paying that guy that they had fired a long time ago.

714
00:57:32,654 --> 00:57:33,974
And they said, we fixed the glitch.

715
00:57:34,274 --> 00:57:39,514
So, you know, there was a glitch in the guidance and they fixed the glitch and, you know, better sooner than later.

716
00:57:40,674 --> 00:57:52,434
Yeah, I think the table you were showing, Jeff, it does just put numbers to that point where we have to regularly remind ourselves who's actually in control here.

717
00:57:52,954 --> 00:57:56,554
And it is none of us on Twitter. None of us. Right.

718
00:57:56,554 --> 00:58:14,554
I mean, those are huge numbers. And if you're getting that call through your IR, you're taking it and you're listening very closely. Because if capital comes out and says, we don't like it, we're out and they're offloading, what do they have? $5 billion worth of MSDR stock? You're going to feel that.

719
00:58:14,554 --> 00:58:24,074
right those are partner level investments in these companies and so you have to be cognizant of who

720
00:58:24,074 --> 00:58:29,194
are the true partners here right we look at it through the investing lens of a retail audience

721
00:58:29,194 --> 00:58:35,114
because that's what most of us have spent most of our time around right we invest like retail

722
00:58:35,114 --> 00:58:41,194
investors do that's our view of things we get the information we get it's a different ball game for

723
00:58:41,194 --> 00:58:45,194
these companies that are investing you know four or five six billion dollars into one of these

724
00:58:45,194 --> 00:58:50,474
companies that's a very different type of relationship that you form with these companies

725
00:58:50,474 --> 00:58:54,874
and you're going to be in regular communication with them and they're going to be the ones that

726
00:58:54,874 --> 00:59:01,834
give you feedback really really quickly but you know putting out a blueprint like that to what

727
00:59:01,834 --> 00:59:07,514
saleh just said that's something that they may not appreciate at that level having a blueprint

728
00:59:07,514 --> 00:59:13,594
that's that spelled out for that reason. You know, there's some questions that came in,

729
00:59:14,194 --> 00:59:19,214
you know, what do we do about financial education? Really, Saylor has to educate the top 10 here.

730
00:59:19,674 --> 00:59:24,294
That's it. That's the key institutions that need to understand. It's not an insurmountable task.

731
00:59:24,294 --> 00:59:31,254
So if these 10 are all on board, which I believe they probably are, that there's really only maybe

732
00:59:31,254 --> 00:59:38,294
10 or 20 other large institutions that he has to basically onboard in order to understand what a

733
00:59:38,294 --> 00:59:42,594
Bitcoin treasury's company and what he's specifically doing. The other question I saw that came up is,

734
00:59:43,194 --> 00:59:47,734
what about the prefs? If we're not going to use a common stock ATM and you're not going to do the

735
00:59:47,734 --> 00:59:53,014
converts, do more prefs. Well, the catch of the prefs is that the maximum it pays is 10%.

736
00:59:53,634 --> 01:00:00,014
And so what happened is that if you have a straight MSTR stock and when they did the converts,

737
01:00:00,014 --> 01:00:06,174
and let's assume that they were 40% convert with no coupon, that 40% got achieved very quickly.

738
01:00:06,954 --> 01:00:12,274
And so what happened was the class of investor that did the converts that then Delta hedged it,

739
01:00:12,514 --> 01:00:18,434
so they protect their downside, right, is that all of a sudden those went into the money very

740
01:00:18,434 --> 01:00:25,694
quickly. So that was like, oh, that was like a really good play or instrument. On the prefs,

741
01:00:25,694 --> 01:00:32,974
given a 10% coupon and the yield goes down as the price goes up, it's like, oh, interesting,

742
01:00:33,254 --> 01:00:38,974
kind of cool. Will it take the bond market? Probably when, take some more time. But that

743
01:00:38,974 --> 01:00:46,194
volatility leads to slower adoption in my view. And so educating those bond buyers that would buy

744
01:00:46,194 --> 01:00:52,954
that instrument is a slower cohort of individuals or institutions. Whereas the ones that are used to

745
01:00:52,954 --> 01:01:01,714
the converts or as dan said is buying the the dog crap jet blue what was it 16 billion dollars in

746
01:01:01,714 --> 01:01:08,314
assets 14 billion dollars in liability i mean it's a turd right it's a turd and and what's the coupon

747
01:01:08,314 --> 01:01:17,834
on it same as the same 10 10 and it's a turd and they've been able to people buy this oh it's jet

748
01:01:17,834 --> 01:01:23,134
Louis because it's like, oh, it's an airline. It moves a person from point A to point B through

749
01:01:23,134 --> 01:01:27,394
the air on a Boeing airplane. Oh, I understand that. I'm like, yeah, you're real smart.

750
01:01:27,914 --> 01:01:34,254
So I think my point about this is that it's like if they think they, because they go on an airplane,

751
01:01:34,394 --> 01:01:39,174
they get it. But because Bitcoin, you can't touch it. They're like, oh, and I don't know who invented

752
01:01:39,174 --> 01:01:44,514
it. And it's only used for money laundering and drug deals. Therefore, I'm not going to even give

753
01:01:44,514 --> 01:01:50,674
a second thought. And so I think that that's hopefully not your target audience, but that's

754
01:01:50,674 --> 01:01:56,994
where we are with this. So I think that the prefs will move as they become more comfortable with it.

755
01:01:56,994 --> 01:02:01,554
And because they're relatively new, they don't have a five-year history. Now, MSTR stock has

756
01:02:01,554 --> 01:02:08,914
been around for whatever, 27 years, but the converts and MSTR on a Bitcoin treasury have

757
01:02:08,914 --> 01:02:14,434
been around now for half a decade. So that's a much different timeframe to understand what the

758
01:02:14,434 --> 01:02:19,954
behavior of these instruments are in the real world and that's why it could be more comfortable

759
01:02:19,954 --> 01:02:24,274
because you could look at the value of this how it moved through crypto winters

760
01:02:24,274 --> 01:02:32,114
and i think that comfort factor just comes with time yeah and uh this risk element which

761
01:02:32,114 --> 01:02:36,594
dan i i love that you're leaning into this uh the fixed income space because this is uh

762
01:02:36,594 --> 01:02:41,634
it's super fascinating but but like that jet blue bomb the jet blue prep it's probably got zero

763
01:02:41,634 --> 01:02:48,594
liquidity right like if if you held it if you wanted to get rid of it it's probably so hard

764
01:02:48,594 --> 01:02:56,674
to get rid of like off if you tried to offload it and there's probably just not a lot of buyers there

765
01:02:56,674 --> 01:03:02,354
and this um this element of liquidity and these new instruments uh they're coming out which are

766
01:03:02,354 --> 01:03:09,314
hyper liquid and well i guess we're we're seeing how liquid and how transactional they are now but

767
01:03:09,314 --> 01:03:12,034
there is a market there.

768
01:03:12,072 --> 01:03:17,512
interesting to see how this whole thing evolves and um i started thinking back to this uh

769
01:03:18,472 --> 01:03:26,152
this book uh against the gods uh it's called the remarkable story of risk and i i need to go back

770
01:03:26,152 --> 01:03:33,832
and reread this but like this whole concept of probability and risk is only like 600 years old

771
01:03:33,832 --> 01:03:40,792
maybe 700 years old um and it's continuously evolving and like we're literally at the forefront

772
01:03:40,792 --> 01:03:44,092
of a new evolution of risk framework

773
01:03:44,092 --> 01:03:47,432
that doesn't fit within like traditional models.

774
01:03:47,792 --> 01:03:49,952
And we are literally building it

775
01:03:49,952 --> 01:03:51,112
and designing it as we go.

776
01:03:52,192 --> 01:03:53,972
And that's pretty cool.

777
01:03:54,712 --> 01:03:56,032
It's a neat place to be.

778
01:03:56,512 --> 01:03:59,432
Like this whole concept of this equity

779
01:03:59,432 --> 01:04:01,312
and how it works is,

780
01:04:01,912 --> 01:04:04,792
if you think Bitcoin is directionally going one way

781
01:04:04,792 --> 01:04:06,152
for every four years,

782
01:04:06,912 --> 01:04:08,112
if you look back and you look at four year

783
01:04:08,112 --> 01:04:10,032
compound annual growth rate of Bitcoin

784
01:04:10,032 --> 01:04:15,632
and it's going one direction and you understand the architecture of the equity market and you

785
01:04:15,632 --> 01:04:20,752
know that if my market cap is a function of my underlying Bitcoin holdings and I know that's

786
01:04:20,752 --> 01:04:26,672
going up and I know that 60% of the equity market is passive index funds, I know I'm going to have

787
01:04:26,672 --> 01:04:32,912
liquidity on my stock. It's a directional bet on Bitcoin knowing that you're going to have liquidity

788
01:04:32,912 --> 01:04:38,832
on your stock because of how the architecture of the system is designed and you've got capital

789
01:04:38,832 --> 01:04:44,992
coming in from passive funds consistently. Now you can also take, you can start to issue Bitcoin

790
01:04:44,992 --> 01:04:53,712
backed credit and, you know, use it all together. So yeah, it's neat. Keep leaning into this risk

791
01:04:53,712 --> 01:04:59,192
framework because I think you should probably start going to sell these instruments to big capital,

792
01:04:59,612 --> 01:05:05,812
get paid, get paid a fee to do that. I'm just running a hedge fund, just making my lawn for

793
01:05:05,812 --> 01:05:11,412
trades yeah but i mean what if you went and sold five ten fifteen billion dollars of this stuff

794
01:05:11,412 --> 01:05:15,332
because you knew how crappy everything else was in the market and you're able to communicate it

795
01:05:17,252 --> 01:05:21,732
it's possible dan's the one leaning on micro strategy right now he was upset with the

796
01:05:21,732 --> 01:05:28,452
guidance he took his hedge fund he's leaning on him make the point with the institutional guys

797
01:05:28,452 --> 01:05:33,972
just one last time and then i'll let it go here but if you look at a pref like strike

798
01:05:34,852 --> 01:05:41,172
the same number two holder of msdr common right capital international is also the second largest

799
01:05:41,172 --> 01:05:47,492
holder of strike so when everyone's surprised when you're seeing mstr going down and then you're

800
01:05:47,492 --> 01:05:52,612
seeing the prefs going down as well if you're a big guy and you want to lean on one of these companies

801
01:05:53,572 --> 01:05:59,812
you just turn on a t-wop and start selling until they say mercy you know it's a possibility i don't

802
01:05:59,812 --> 01:06:04,372
know that that's what's happening but when you look at how interconnected the holdings from these

803
01:06:04,372 --> 01:06:10,692
institutions are across this entire portfolio and you're seeing you know this activity in prefs that

804
01:06:10,692 --> 01:06:14,692
you wouldn't expect you know necessarily just because the common stock is going down or at

805
01:06:14,692 --> 01:06:21,252
least to the extent you know you start to look for how are all of these connected and if i was a big

806
01:06:21,252 --> 01:06:26,932
investor and i got upset what would i do to make my point and the only way to make your point is to

807
01:06:26,932 --> 01:06:31,412
use your capital right you can call if you don't get the right answer you start using your capital

808
01:06:31,412 --> 01:06:37,172
so just a theory i don't know but you know you do start to shift up to that level and try to put

809
01:06:37,172 --> 01:06:43,892
yourself in that mindset of who's actually running the show here and how intertwined are they in the

810
01:06:43,892 --> 01:06:48,932
entire ecosystem and when you start looking at that you realize there's a lot of familiar names

811
01:06:48,932 --> 01:06:55,412
that show up across the board for all of this yeah because they don't care you if you if you've got

812
01:06:55,412 --> 01:07:00,132
you know hundreds of billions of dollars you don't care you can use your power however you want you

813
01:07:00,132 --> 01:07:05,812
can you can wield it however you want and like that's i mean look at politics and politics is all

814
01:07:05,812 --> 01:07:11,892
money all this it's the same thing um it also means they could be back quicker than people think

815
01:07:12,612 --> 01:07:17,092
right true they like the change in the guidance and the changes have been made that makes them

816
01:07:17,092 --> 01:07:21,812
back into a comfortable position they could come back right that'll be my my hopium pitch here for

817
01:07:21,812 --> 01:07:26,852
a minute but you know if someone big did start exiting you know because they didn't like that

818
01:07:26,852 --> 01:07:30,532
guidance and the guidance has changed and now they're comfortable again you can see that capital

819
01:07:30,532 --> 01:07:38,292
come right back into the ecosystem so we'll see what happens you know i i want to say that this

820
01:07:38,292 --> 01:07:44,532
also this is i don't think we've mentioned this before um the other thing is that um because the

821
01:07:44,532 --> 01:07:51,732
the bitcoin uh treasury playbook was published in what 2022 sailor published it and then when

822
01:07:51,732 --> 01:07:56,352
And what happened is, and I believe Semler was the first company to adopt it, maybe the

823
01:07:56,352 --> 01:07:57,512
second company to adopt it.

824
01:07:57,612 --> 01:07:58,192
I'm guessing.

825
01:07:58,432 --> 01:07:59,312
I mean, I'm correct.

826
01:07:59,712 --> 01:08:00,192
Semler was, yeah.

827
01:08:00,372 --> 01:08:01,632
It was just number two.

828
01:08:01,932 --> 01:08:06,332
So now what's happened is that you have over 100 publicly traded companies that are all

829
01:08:06,332 --> 01:08:06,832
doing this.

830
01:08:07,332 --> 01:08:12,012
So when MSTR was the only instrument, because you really couldn't buy the converts unless

831
01:08:12,012 --> 01:08:14,492
you were, there's a way to do it now as a retail.

832
01:08:14,492 --> 01:08:18,872
But the only way that you could get access to a leveraged Bitcoin equity, which we didn't

833
01:08:18,872 --> 01:08:24,212
even have the term back then, was just the MSTR as that only instrument that you could buy.

834
01:08:24,712 --> 01:08:29,292
Now, what's happened is, is that because the ecosystem has gotten bigger, there's now other

835
01:08:29,292 --> 01:08:34,952
alternatives to buy, which then that capital moves to other instruments, which may have different

836
01:08:34,952 --> 01:08:40,652
multiples or metrics that they could judge by this. And so that takes some of the buying pressure

837
01:08:40,652 --> 01:08:46,752
off from retail on MSTR. Now that's, you know, there's an old saying, the victim of your success.

838
01:08:46,752 --> 01:08:50,872
And this is the thing where he built this ecosystem and he always planned to do it.

839
01:08:51,272 --> 01:08:57,412
He published these guidance to give to your CFO years ago, three years ago to say, this

840
01:08:57,412 --> 01:08:58,352
is how you do this.

841
01:08:58,712 --> 01:09:05,512
And so what he's done is not only blaze the trail for strategy, is that he's also built

842
01:09:05,512 --> 01:09:08,432
this ecosystem of other companies to copy what he's doing.

843
01:09:08,652 --> 01:09:14,412
And from that perspective, I think that that also happened about the same time from November

844
01:09:14,412 --> 01:09:20,812
of last year to now that you had that took some of the buying pressure off on on strategy and so

845
01:09:20,812 --> 01:09:29,292
i think that all of this came together i think that uh um time and price solves all problems

846
01:09:29,292 --> 01:09:34,652
provided that you don't rent your conviction jeff you said this at the beginning ben oh sorry ben

847
01:09:34,652 --> 01:09:41,532
yeah yeah if you have conviction in bitcoin and you believe in that and that if you had everybody

848
01:09:41,532 --> 01:09:48,172
that's on this call right now listening we have what 5 000 people 7 800 8 500 8 500 people okay

849
01:09:48,172 --> 01:09:53,692
8 500 people on this if somebody came to you and said hey we're gonna let you borrow 50 of whatever

850
01:09:53,692 --> 01:09:59,612
you let's say you have 100 grand and we have one bitcoin we'll let you borrow 100 grand so you're

851
01:09:59,612 --> 01:10:05,852
50 lever to go buy another bitcoin and you got to pay us back in five years and it's 40 you got to

852
01:10:05,852 --> 01:10:11,132
pay back in five years i think everybody listening would be like oh i'll take that deal now that's a

853
01:10:11,132 --> 01:10:17,532
convert that's what it would be we would all take that leverage right there no margin call feature

854
01:10:17,532 --> 01:10:24,252
it goes five years and i only have to pay you 40 of what it is at the initial purchase price on an

855
01:10:24,252 --> 01:10:28,972
agreed amount that it goes to and if it goes way beyond that in five years you don't get the other

856
01:10:28,972 --> 01:10:35,052
side doesn't get the upside you keep this of course you would take that deal so so can we talk about

857
01:10:35,052 --> 01:10:40,572
how freaking cool it is that strategy started talking about this they laid the framework and

858
01:10:40,572 --> 01:10:45,652
And then he goes on just a podcast journey and says, here's what I'm going to do.

859
01:10:45,732 --> 01:10:47,012
I'm going to add Bitcoin to my balance sheet.

860
01:10:47,052 --> 01:10:47,592
I'm going to leverage it.

861
01:10:47,592 --> 01:10:48,732
I'm going to start doing all this other stuff.

862
01:10:49,852 --> 01:10:52,032
And he convinced other people to do it.

863
01:10:52,712 --> 01:10:58,732
Like he imagined like that feeling like as I'm now working for a company that's looking

864
01:10:58,732 --> 01:11:03,812
to do the same thing, it's incredible.

865
01:11:03,812 --> 01:11:12,092
incredible like is a total pioneer like pioneering a space and talking about it like dipped his toe

866
01:11:12,092 --> 01:11:17,612
in the water as I said hey water is warm like come check it out like my company just went from uh

867
01:11:17,612 --> 01:11:23,972
500 million dollars to 70 71 billion dollars of capital in five years and Jeff it's the equivalent

868
01:11:23,972 --> 01:11:30,032
of getting people to use electricity it's yeah it's like hey guys my company you know I'm creating

869
01:11:30,032 --> 01:11:33,632
factory, we're using electricity. Try it out.

870
01:11:33,752 --> 01:11:38,552
Check it out. Yeah. We're like, okay, here we go.

871
01:11:38,552 --> 01:11:41,192
It's pretty good. It's pretty good.

872
01:11:42,032 --> 01:11:45,752
I think it should work. I think it's gonna work. Yeah, it's

873
01:11:45,752 --> 01:11:50,012
it's just a it's a wild phenomenon that's happened in

874
01:11:50,012 --> 01:11:51,932
the market. It's just an exciting time to be.

875
01:11:51,932 --> 01:11:57,212
I think it's pretty ironic that a lot of Bitcoiners are

876
01:11:57,212 --> 01:12:03,452
really defensive when it comes to to bitcoin treasury companies but they they imagine a world

877
01:12:03,452 --> 01:12:12,332
in which every company is using bitcoin right if if simultaneously you believe that one bitcoin is

878
01:12:12,332 --> 01:12:18,372
going to become a global asset which every individual family and company will use and number

879
01:12:18,372 --> 01:12:23,892
two that you believe companies will exist in the future then obviously companies are going to adopt

880
01:12:23,892 --> 01:12:31,132
Bitcoin. And this goes back to an earlier point in the night. Bitcoiners are spending a lot of time

881
01:12:31,132 --> 01:12:36,792
criticizing Bitcoin treasury companies, but they're not talking about JetBlue or they're

882
01:12:36,792 --> 01:12:43,192
not talking about the rest of the landscape, which is awful. Horrible. Risk is mispriced everywhere.

883
01:12:43,192 --> 01:12:49,692
Risk is like vastly mispriced. Horrible. And instead they're choosing to kind of pick on

884
01:12:49,692 --> 01:12:55,512
Bitcoin treasury companies because they're doing, it's doing better than Bitcoin, but,

885
01:12:55,512 --> 01:13:03,352
but there is risk involved potentially. Yeah. I think that they're just scarred from like FTX

886
01:13:03,352 --> 01:13:11,052
and, you know, over leverage plays like, uh, they're, they're, they're scared, right? Like

887
01:13:11,052 --> 01:13:15,652
you think about, uh, some of the people I've met at some of these Bitcoin conferences, they're like,

888
01:13:15,652 --> 01:13:18,432
I mean, they're preppers, right?

889
01:13:18,452 --> 01:13:22,812
Like they're anxious people that are controlling their own assets.

890
01:13:22,812 --> 01:13:26,352
And that's where their mindset is at.

891
01:13:26,472 --> 01:13:29,032
And that's how they communicate in the marketplace.

892
01:13:29,352 --> 01:13:31,032
And some of them are very intelligent.

893
01:13:31,172 --> 01:13:32,312
They're just incredibly anxious.

894
01:13:33,032 --> 01:13:36,452
And that permeates through how they communicate in the market.

895
01:13:36,552 --> 01:13:39,592
And they may have 50,000 followers, 100,000 followers.

896
01:13:40,192 --> 01:13:41,472
Doesn't mean they're not anxious.

897
01:13:41,472 --> 01:13:46,672
and it doesn't mean that you know they don't understand like the traditional like corporate

898
01:13:46,672 --> 01:13:52,032
finance market as well as people that have worked in it for 10 20 30 years that are operating in the

899
01:13:52,032 --> 01:14:01,312
space so yeah it's uh and that that's why like i think i was i'm still on this campaign to like

900
01:14:01,312 --> 01:14:05,552
look at the rest of the market through a lens of bitcoin like go look back at net incomes priced

901
01:14:05,552 --> 01:14:12,212
in Bitcoin on any equity going back in time. Like, Dan, keep doing the analysis on the debt,

902
01:14:12,372 --> 01:14:19,332
like call everybody out, tag them because it's honest and it's true. And you can start to see

903
01:14:19,332 --> 01:14:26,232
this in a data perspective. It's pretty incredible. I think you made the point, and I can't remember

904
01:14:26,232 --> 01:14:30,012
if it was on one of these shows or on one of the other podcasts, they all blur together now, but

905
01:14:30,012 --> 01:14:35,212
you'd made the point that Bitcoiners right now are spending a lot of time infighting

906
01:14:35,212 --> 01:14:43,052
when there's still a huge amount of work to be done out there more broadly on bringing bitcoin

907
01:14:43,052 --> 01:14:48,732
and bringing awareness to bitcoin out there into the masses and so you know the the amount of time

908
01:14:48,732 --> 01:14:54,812
that we're all spending throwing mud at each other and disagreeing and being mad if someone doesn't

909
01:14:54,812 --> 01:15:02,732
adopt your point of view on a topic you know like everybody's pushing for bitcoin here right these

910
01:15:02,732 --> 01:15:07,772
companies are doing a huge amount in raising awareness for Bitcoin, right? Stories like a

911
01:15:07,772 --> 01:15:13,292
strategy that are getting people to wonder what the heck is making all of this work, right? What

912
01:15:13,292 --> 01:15:18,572
is this asset that's doing it? People might show up from there and go get exposure in their brokerage

913
01:15:18,572 --> 01:15:25,132
account to an IBIT or one of the ETFs. And then if that asset performs in their portfolio, now you're

914
01:15:25,132 --> 01:15:28,892
down to the next level, right? Now you're interested in what's actually going on behind the scenes

915
01:15:28,892 --> 01:15:33,452
here next thing you know you're running a node in your basement and you got a miner running and

916
01:15:33,452 --> 01:15:37,452
you're trying to participate in everything you can within the network and you see the value

917
01:15:38,252 --> 01:15:42,892
right you see it and you participate in it and that's when you turn that corner and all this time

918
01:15:42,892 --> 01:15:47,132
you know we're on the internet that is just what comes with the internet right people throw mud

919
01:15:47,772 --> 01:15:52,972
and they hide behind avatars and hurl insults at you and tell you how dumb you are and that's just

920
01:15:53,532 --> 01:15:58,172
you know that's the internet that that comes with the territory but there's such a bigger mission

921
01:15:58,172 --> 01:16:04,332
still out there. Like the penetration of awareness for Bitcoin out there in the broader community,

922
01:16:04,332 --> 01:16:10,572
in the broader corporate landscape is still effectively zero. I mean, there's just nothing

923
01:16:10,572 --> 01:16:17,132
out there. So yeah, I think a lot of the attention is getting wasted fighting amongst people that

924
01:16:17,132 --> 01:16:22,332
already believe in Bitcoin. And really that attention should be spent, you know, getting

925
01:16:22,332 --> 01:16:26,492
the word out there to people that have still probably never heard of Bitcoin. I think there's

926
01:16:26,492 --> 01:16:28,352
There's a lot more of that than we think there is.

927
01:16:28,812 --> 01:16:32,032
You know, I think that this is a problem that's going to come up.

928
01:16:32,452 --> 01:16:35,052
And this is the opposite of what Bitcoiners think.

929
01:16:35,792 --> 01:16:41,852
What some people have said, if the price goes up, then people will get into this because they'll see the success of it.

930
01:16:42,032 --> 01:16:54,792
I think what happens is that if Bitcoin, when, not if, when it runs to $250,000 or to $500,000, I think you're going to see people say, I remember that when it was only 50 grand.

931
01:16:54,792 --> 01:16:59,232
I remember that when it was $100,000 and now it's $500,000.

932
01:16:59,792 --> 01:17:01,452
Oh, I missed it.

933
01:17:01,652 --> 01:17:03,712
Therefore, I won't buy it anymore.

934
01:17:04,132 --> 01:17:04,652
Right.

935
01:17:04,992 --> 01:17:09,432
And I think that because Bitcoin doesn't have a stocks, but I get you could buy sats.

936
01:17:09,512 --> 01:17:12,912
You could buy it in any fiat dollar amount, you know, basically.

937
01:17:13,192 --> 01:17:16,612
And I get that Ibit exists and you have this unit bias.

938
01:17:16,812 --> 01:17:22,052
But I think that some of the success of this will be problematic based upon pricing one

939
01:17:22,052 --> 01:17:22,532
Bitcoin.

940
01:17:22,532 --> 01:17:26,232
And years ago, we discussed we should price this in being in SATs.

941
01:17:26,692 --> 01:17:31,832
So I think that where this is going, I think that to explain to people that as long as you

942
01:17:31,832 --> 01:17:36,092
believe that they're not going to balance the fiscal budget, that they have to print

943
01:17:36,092 --> 01:17:39,412
money, your ability to get into this.

944
01:17:39,652 --> 01:17:43,812
And then I said the hardest part about investing, not trading, is waiting.

945
01:17:44,272 --> 01:17:48,272
I went into this and I waited two years, four years, eight years.

946
01:17:48,912 --> 01:17:51,412
And what happens is I've been in this for eight years now.

947
01:17:51,412 --> 01:17:58,952
And that's the hardest part. But if you're 28 years old, or since I'm the oldest guy here,

948
01:17:59,392 --> 01:18:05,752
if you're a Dan, you're what, 24. So if you're 24 years old, listening to this,

949
01:18:06,072 --> 01:18:09,872
I want to tell you something, eight years will go by very quickly. And you want to think about

950
01:18:09,872 --> 01:18:13,472
where you're going to be when you want to be 32 years old. And that's the way I think Saylor

951
01:18:13,472 --> 01:18:18,772
thinks about accumulating as much Bitcoin as possible, is that if it's $500,000 a coin,

952
01:18:18,772 --> 01:18:22,172
four years from now or two years from now or a year from now.

953
01:18:22,292 --> 01:18:27,592
I want to buy as much of it now, reduce my expenses to acquire as much as I can

954
01:18:27,592 --> 01:18:32,112
to have that increase in market cap.

955
01:18:32,512 --> 01:18:34,292
So I think that that's what we have to look at this.

956
01:18:34,372 --> 01:18:36,832
And that's where I think that people can help explain to people that

957
01:18:36,832 --> 01:18:41,652
the problem that Bitcoin fixes, which is both M2 money printing,

958
01:18:41,652 --> 01:18:46,112
monetary debasement due to deficits and CPI inflation,

959
01:18:46,392 --> 01:18:48,552
those two were not going to be fixed ever.

960
01:18:48,772 --> 01:18:53,292
If they do send them to make, because those people are completely patently wrong.

961
01:18:53,292 --> 01:19:05,844
Well I think that the education that Bitcoin ultimately gets people right As it brings you down that rabbit hole of what the heck is going on that makes this asset work over a long period of time What happening And it not

962
01:19:05,844 --> 01:19:10,864
just that the number goes up, right? It's that there's several numbers going up, including the

963
01:19:10,864 --> 01:19:16,404
supply of the one unit or medium of exchange you're used to using, right? The US dollar.

964
01:19:16,404 --> 01:19:25,644
and so when you start to go down the path of asking the right questions right first finding

965
01:19:25,644 --> 01:19:29,704
out what questions should i be asking because most people are totally asleep at the wheel right we

966
01:19:29,704 --> 01:19:34,644
think everybody knows about monetary debasement and inflation and all these things and you know

967
01:19:34,644 --> 01:19:39,524
they don't they're just trying to get they're drafting their fantasy you know just you know go

968
01:19:39,524 --> 01:19:44,404
to chipotle and hopefully you know get guac if things are good that week but when you start

969
01:19:44,404 --> 01:19:49,764
understanding the right questions to ask because you start to understand that there's a significant

970
01:19:49,764 --> 01:19:56,484
long-term impact of ignoring it or not understanding it you know that's when that real education kicks

971
01:19:56,484 --> 01:20:01,364
in and you can start searching for what is the solution to that right how do i get out of that

972
01:20:01,364 --> 01:20:07,524
system if it becomes completely clear to me that i'm being manipulated into being a spender at all

973
01:20:07,524 --> 01:20:12,404
times because every dollar i'm holding is going to devalue out from under me so it's better for

974
01:20:12,404 --> 01:20:16,564
me to at least spend it and have something to show for it today because it's going to be worth more

975
01:20:16,564 --> 01:20:22,004
later you start asking the right questions and when you ask the right questions you know ultimately

976
01:20:22,004 --> 01:20:27,764
it leads you to bitcoin so this is getting bitcoin awareness out there is going to fast track that

977
01:20:27,764 --> 01:20:33,444
education because it starts to highlight here is the question that you need to be asking right this

978
01:20:33,444 --> 01:20:38,884
is what you're ignoring in your own life and it has significant long-term implications for you and

979
01:20:38,884 --> 01:20:43,924
and your family and the younger you are when you figure it out, right? Like the reason Mason and

980
01:20:43,924 --> 01:20:48,924
Dan are going to be way richer than all of us is because they're figuring this out so early

981
01:20:48,924 --> 01:20:55,344
and you have the benefit of time in front of you still for this to benefit you. So you can

982
01:20:55,344 --> 01:21:02,824
take on assets, have that long time horizon you're focusing on and put the fixes in place early that

983
01:21:02,824 --> 01:21:07,424
get you out of that system where you're no longer bound to that. So that's why I think it's important

984
01:21:07,424 --> 01:21:13,024
to really push the Bitcoin narrative alongside all the Bitcoin treasury narrative as well,

985
01:21:13,024 --> 01:21:17,744
because they're connected. One's just doing it at a corporate level. They're saying,

986
01:21:17,744 --> 01:21:23,184
we've got this problem too. And JetBlue hasn't figured out that they have this problem yet,

987
01:21:23,184 --> 01:21:28,864
but they've got this problem too. And they've got to find ways to solve for it. And if you view your

988
01:21:28,864 --> 01:21:35,744
business as an entity that needs to exist 10, 20 years, you've got to solve for this issue

989
01:21:35,744 --> 01:21:41,184
in your corporation as well so to me it's all about getting that that message out there

990
01:21:42,144 --> 01:21:47,424
into the universe getting people to start getting curious about it understanding why these companies

991
01:21:47,424 --> 01:21:52,544
are working why the valuations on them are continuing to go up why bitcoin continues to

992
01:21:52,544 --> 01:21:57,824
appreciate over a long period of time and once they answer that question you know it becomes

993
01:21:57,824 --> 01:22:04,384
rather obvious what to do and and the press are a continuation of that journey i think that's

994
01:22:04,384 --> 01:22:10,064
another thing that like a lot of bitcoiners think that or at least just a general sentiment of like

995
01:22:10,064 --> 01:22:15,504
sailors out to kill this thing which seems kind of strange but like this is this is

996
01:22:16,784 --> 01:22:21,984
i'm gonna get roasted for this this is good for bitcoin like having having companies that are

997
01:22:21,984 --> 01:22:26,624
securitizing bitcoin and creating financial products that are backed by bitcoin is good for

998
01:22:26,624 --> 01:22:35,744
Bitcoin. Why? Because it's bringing people into the network that would never otherwise buy Bitcoin.

999
01:22:38,784 --> 01:22:43,824
David Peterson put this together, but I really liked it. This is an analogy that I made,

1000
01:22:44,624 --> 01:22:51,504
is that strategy is effectively fishing in the ocean at different depths for different types of

1001
01:22:51,504 --> 01:22:59,024
fish and like these uh big whales that are you know at the bottom of the ocean are not going to

1002
01:22:59,024 --> 01:23:04,064
come up to the top and like eat your eat your bait on the top of the ocean they don't like they can't

1003
01:23:04,064 --> 01:23:10,544
do it um they're not meant to do that they're never going to bite at the top of the ocean so

1004
01:23:10,544 --> 01:23:17,904
you got to drop a hook down to the very bottom to where they're at and like these these pools of

1005
01:23:17,904 --> 01:23:24,224
capital are enormous like the in the ocean is enormous the amount of um you know buyers that

1006
01:23:24,224 --> 01:23:28,544
could potentially buy these instrument instruments are enormous and there's significant opportunity

1007
01:23:28,544 --> 01:23:34,304
here not just for strategy but for other companies to do the same thing which is why you're seeing

1008
01:23:34,304 --> 01:23:43,824
other companies start to do this uh because this is a 600 trillion dollar market this is there's

1009
01:23:43,824 --> 01:23:49,104
There's like $400 to $600 trillion of capital that could be interested, like total addressable

1010
01:23:49,104 --> 01:23:52,184
market that could be interested in these types of products.

1011
01:23:52,184 --> 01:23:59,544
And that market is going to continue to grow at the rate of global monetary debasement.

1012
01:23:59,544 --> 01:24:03,144
So it's huge.

1013
01:24:03,144 --> 01:24:06,624
This is the biggest total addressable market in the planet.

1014
01:24:06,624 --> 01:24:11,644
Bitcoin's got money, Bitcoin is sound money, and now you can create these products that

1015
01:24:11,644 --> 01:24:16,744
can address and fix the capital markets. So there's a long ways to go.

1016
01:24:17,284 --> 01:24:18,184
A lot of work to do.

1017
01:24:19,324 --> 01:24:21,424
I did see one funny comment in there, you know,

1018
01:24:21,424 --> 01:24:24,124
based on all the guidance stuff, you know,

1019
01:24:24,184 --> 01:24:27,464
what would the response of the group be if they decided to put guidance where

1020
01:24:27,464 --> 01:24:30,964
they might consider putting Ethereum in their treasury?

1021
01:24:32,224 --> 01:24:36,704
Okay. That's fair. That's a fair roast. I'm out. I'm out.

1022
01:24:36,724 --> 01:24:39,784
Please do not. I know we're all super fans, but I'm out.

1023
01:24:39,784 --> 01:24:42,564
I don't think I'd be able to get out fast enough before everyone else did.

1024
01:24:42,564 --> 01:24:44,064
Yeah, I'm out.

1025
01:24:44,144 --> 01:24:48,484
The problem with all the other digital asset treasury companies that are out there now,

1026
01:24:48,764 --> 01:24:48,924
right?

1027
01:24:48,964 --> 01:24:51,684
You're seeing there's Dogecoin treasury companies.

1028
01:24:51,804 --> 01:24:53,404
There's all kinds of stuff out there now.

1029
01:24:54,004 --> 01:24:59,244
The problem with that is you don't know what problem you're solving for, right?

1030
01:24:59,364 --> 01:25:04,424
So like I just went on my long extended rant about all the issues that Bitcoin fixes in

1031
01:25:04,424 --> 01:25:05,204
people's lives.

1032
01:25:05,204 --> 01:25:11,304
that's a use case that's universal to corporations to individuals right so that asset you can

1033
01:25:11,304 --> 01:25:17,064
conceptualize in your mind you understand the use case for it you understand the value that

1034
01:25:17,064 --> 01:25:22,324
it's providing to you you know what it's solving for with all these other ones my problem is always

1035
01:25:22,324 --> 01:25:26,824
i don't know what they're solving for i've i cannot figure out what they're solving for

1036
01:25:26,824 --> 01:25:35,004
so you know while yeah they're they're technologies is how i view them they're not solving a core

1037
01:25:35,004 --> 01:25:42,284
fundamental systemic issue like Bitcoin is with monetary debasement. And to me, that's why I look

1038
01:25:42,284 --> 01:25:47,644
at all of those and just have absolutely no interest in any of these digital asset treasury

1039
01:25:47,644 --> 01:25:55,984
companies. I just don't see the long-term value case. And I think all of them outside of Bitcoin

1040
01:25:55,984 --> 01:26:01,644
because of the true decentralized nature of it already and the fact it's achieved this escape

1041
01:26:01,644 --> 01:26:06,884
velocity, I think all the other ones are prime for disruption. I think in most of these other ones,

1042
01:26:06,924 --> 01:26:10,404
if you're a technology and you're trying to be the foundational layer for one thing or another,

1043
01:26:10,404 --> 01:26:17,544
you're in a race to low cost and you're just waiting for another token or chain to come out

1044
01:26:17,544 --> 01:26:24,184
that's optimized for low costs for the problem you're trying to fix. And all of a sudden you're

1045
01:26:24,184 --> 01:26:28,624
wiped out. Right. So anyways, I just thought it was funny though. When I, when I saw that,

1046
01:26:28,624 --> 01:26:33,504
there going you know we're all fans but what would we do if they decided to adopt ethereum

1047
01:26:33,504 --> 01:26:39,984
in the treasury and uh my answer is i'm out yeah yeah although all those digital asset treasuries

1048
01:26:39,984 --> 01:26:45,504
they're going to zero against bitcoin over a long enough time horizon and in the future

1049
01:26:46,944 --> 01:26:52,704
it will be looked on back on so poorly it'll be like you you could have adopted bitcoin

1050
01:26:52,704 --> 01:26:57,704
But you chose Dogecoin?

1051
01:26:57,704 --> 01:27:07,204
Yeah, those feel a little bit more risky, like clearly more risky, but like, it's almost

1052
01:27:07,204 --> 01:27:14,084
like this battle of who's a better capitalist, right?

1053
01:27:14,084 --> 01:27:19,564
It's like Tom Lee is leading the charge with, I guess, Bitminer.

1054
01:27:19,564 --> 01:27:25,064
And so you've got Tom Lee in the market, the sailor and everybody else that's running Bitcoin

1055
01:27:25,064 --> 01:27:28,584
treasury company playbook.

1056
01:27:28,584 --> 01:27:34,324
And it's like how it's they're all going to be in the market fighting for the same things.

1057
01:27:34,324 --> 01:27:35,964
And it'll be interesting to see how it plays out.

1058
01:27:35,964 --> 01:27:39,544
But I think you're right, Mace.

1059
01:27:39,544 --> 01:27:42,004
There's just so much of a head start here too.

1060
01:27:42,004 --> 01:27:49,204
If you wanted access to leveraged Bitcoin with preferred equities, how many equities

1061
01:27:49,204 --> 01:27:53,024
can you buy in the market right now?

1062
01:27:53,024 --> 01:27:57,024
There's one.

1063
01:27:57,024 --> 01:28:03,464
And that's pretty valuable, right?

1064
01:28:03,464 --> 01:28:05,244
That's unique in this landscape.

1065
01:28:05,244 --> 01:28:06,464
Anyway, go ahead, Soleil.

1066
01:28:06,464 --> 01:28:07,464
What were you going to say?

1067
01:28:07,464 --> 01:28:08,464
Yeah.

1068
01:28:08,464 --> 01:28:12,704
that um to steel men the case that mason was talking about you know some of these bitcoiners

1069
01:28:12,704 --> 01:28:19,424
that are just very suspicious of bitcoin treasury companies i mean some of the treasury companies

1070
01:28:19,424 --> 01:28:25,504
coming out right now are legit coiners so i think that's a good use case for us and this show

1071
01:28:26,224 --> 01:28:33,584
and and highlighting what a quote-unquote good bitcoin treasury company looks like and um

1072
01:28:33,584 --> 01:28:43,264
if anybody missed it, Julie Millard was on Tim Cotsman's digital conference,

1073
01:28:43,384 --> 01:28:44,644
that first marathon that he did.

1074
01:28:44,684 --> 01:28:45,824
I think she was on the second one as well.

1075
01:28:46,824 --> 01:28:51,804
But she discussed what authenticity looks like in the Bitcoin treasury space.

1076
01:28:52,664 --> 01:28:58,044
And there was three ideals in there, like true to self and true to ideals,

1077
01:28:58,144 --> 01:28:58,784
things like that.

1078
01:28:59,444 --> 01:29:01,984
And I think if anybody missed that, go check it out.

1079
01:29:01,984 --> 01:29:09,544
And I think this show will be illustrative on, you know, we're going to combat the FUD.

1080
01:29:10,064 --> 01:29:17,904
But then if there's something that's a legit complaint, you know, we should be able to mention that as well.

1081
01:29:17,984 --> 01:29:20,924
But I think some of these Bitcoiners just have like a revenge fantasy.

1082
01:29:21,244 --> 01:29:28,164
Like they want the fiat system to come crumbling down and like the OG Bitcoiners are the only ones that have all the capital.

1083
01:29:28,164 --> 01:29:35,424
but you know to mason's point like if all the bitcoiners have all the capital then of course

1084
01:29:35,424 --> 01:29:40,864
like the ones with capital are going to be the ones funding companies like or just capitalism

1085
01:29:40,864 --> 01:29:45,924
just cease to exist yeah yeah like does capitalism go away no all the bitcoiners have the capital

1086
01:29:45,924 --> 01:29:50,704
they're going to invest their capital in companies that's just that's the only way that hyper

1087
01:29:50,704 --> 01:29:57,464
bitcoinization can can go and in politics there's uh you know i recently moved to oregon

1088
01:29:57,464 --> 01:30:02,664
and one of the guys that lived here, he was like, well, considering moving, Oregon's repulsive to

1089
01:30:02,664 --> 01:30:11,584
capital. And the background of that is it's repulsive to some capital companies. It's actually

1090
01:30:11,584 --> 01:30:20,124
one of the best states in the US to have an insurance company. And why is that? It's because

1091
01:30:20,124 --> 01:30:24,324
the insurance companies have a lot of money and the insurance companies influenced regulation

1092
01:30:24,324 --> 01:30:31,124
and politics and like that's that's how these things evolve like with these bitcoin companies

1093
01:30:31,124 --> 01:30:37,044
as well they're going to get integrated in different political systems different regulatory

1094
01:30:37,044 --> 01:30:42,884
environments and different things because they have the they have power and it's going to take

1095
01:30:42,884 --> 01:30:50,684
some time but i think we've seen it right now with like this administration like adopting

1096
01:30:50,684 --> 01:30:58,144
just Bitcoin as a narrative and probably having some impact in swinging the election at a certain

1097
01:30:58,144 --> 01:31:05,164
direction. So yeah, it's, I mean, the future of this is going to be super fun, but we're still

1098
01:31:05,164 --> 01:31:10,704
so early, right? Like there's people, people don't understand what's going on here. Oh,

1099
01:31:10,764 --> 01:31:15,304
and another thing that was pretty interesting about kind of what grain was saying a little bit

1100
01:31:15,304 --> 01:31:23,944
earlier, let's say Bitcoin goes 10x, just goes to a million. The people that just own Bitcoin

1101
01:31:23,944 --> 01:31:27,144
are probably still not going to want to sell Bitcoin at that point either.

1102
01:31:27,824 --> 01:31:31,204
Let's just say you have a million dollars of Bitcoin today and it goes to $10 million of

1103
01:31:31,204 --> 01:31:35,624
Bitcoin in the future. Well, if it goes to $10 million of Bitcoin in the future,

1104
01:31:36,444 --> 01:31:43,264
what is your inflation adjusted return? Maybe it's worth like five today, maybe seven in today's

1105
01:31:43,264 --> 01:31:48,284
dollars. That's a decent amount of money, not a ton of money. You're probably going to want to

1106
01:31:48,284 --> 01:31:53,764
figure out how you lever your Bitcoin at that point. And that entire time, you're probably

1107
01:31:53,764 --> 01:31:58,744
shitting on the company that was leveraging their Bitcoin from the beginning or figuring out how to

1108
01:31:58,744 --> 01:32:05,064
leverage their Bitcoin from the beginning. And yeah, space just has so much room to grow and

1109
01:32:05,064 --> 01:32:11,184
evolve and change. So Jeff, does your AI agent ever get tired of talking about reinsurance?

1110
01:32:11,184 --> 01:32:16,504
you just ask it questions for three hours and it's just like cool you know talking about this

1111
01:32:16,504 --> 01:32:20,264
no you know i haven't talked about reinsurance in a long time and then i saw a hurricane

1112
01:32:20,264 --> 01:32:24,164
that like was happening and i was like oh my god like that was my past life i don't have to deal

1113
01:32:24,164 --> 01:32:28,824
with that anymore um because i used to i used to watch like all these disasters it was the worst

1114
01:32:28,824 --> 01:32:34,264
thing jeff wasn't the summer really busy for you summer was horrible i'm like okay where's the next

1115
01:32:34,264 --> 01:32:38,984
wildfire and then like we're watching these hurricanes spin up off of like the african coast

1116
01:32:38,984 --> 01:32:41,564
and we're like putting bets on where it's going to hit.

1117
01:32:41,964 --> 01:32:44,664
You're like, you're like, you're looking at the Noah pass

1118
01:32:44,664 --> 01:32:46,864
like every day and we're like posting them on the wall

1119
01:32:46,864 --> 01:32:49,664
and we're like, like gambling internally on like,

1120
01:32:49,684 --> 01:32:51,784
is this one going to hit the Bahamas or like,

1121
01:32:51,904 --> 01:32:54,544
anyway, yeah, it was a pretty crazy.

1122
01:32:55,364 --> 01:32:57,864
But since I've shifted and gotten out of that marketplace,

1123
01:32:57,864 --> 01:33:00,604
I haven't thought about it much until like really today

1124
01:33:00,604 --> 01:33:03,144
when I posted the reinsurance,

1125
01:33:03,244 --> 01:33:06,364
like the net capital relative to reinsurance companies,

1126
01:33:06,364 --> 01:33:08,084
which is just a crazy statistic.

1127
01:33:08,984 --> 01:33:15,144
like i worked in this industry for a decade which is huge there are like there it's it's niche in

1128
01:33:15,144 --> 01:33:18,984
the financial world but the amount of capital and it is huge like there's a ton of capital in this

1129
01:33:18,984 --> 01:33:27,624
marketplace and like i i used to i used to transact with these people i used to sell tranches of

1130
01:33:27,624 --> 01:33:33,224
insurance company volatility to like capital across the globe and get it diversified tranches all over

1131
01:33:33,224 --> 01:33:38,184
the place and these are like people that thought were incredibly smart managed capital you know the

1132
01:33:38,184 --> 01:33:43,944
the whole thing. And then I took a step back and I'm like, oh my God, these people are poor

1133
01:33:43,944 --> 01:33:49,384
relative to strategy, right? Like strategy, the net capital on their balance sheet could be the

1134
01:33:49,384 --> 01:33:55,864
third largest reinsurance entity on the planet, like bigger than Lloyd's of London. Like the OG

1135
01:33:55,864 --> 01:34:02,184
insurance company, the OG insurance consortium on the planet that's been around since the 1600s.

1136
01:34:02,184 --> 01:34:09,864
like what like that's crazy that's a crazy statistic and i don't like people can't

1137
01:34:09,864 --> 01:34:15,264
conceptualize like how much how much money that is like totally nuts but anyway yes so

1138
01:34:15,264 --> 01:34:20,424
like i the my ai agent should be tired of reinsurance but uh reality is i've had a

1139
01:34:20,424 --> 01:34:25,524
break for a little bit it's good jeff can't even ask it regular questions anymore because

1140
01:34:25,524 --> 01:34:27,964
that this comes back with as a reinsurance broker.

1141
01:34:29,684 --> 01:34:32,964
Can we can we someone commented?

1142
01:34:32,964 --> 01:34:35,724
They asked us about S&P 500 odds.

1143
01:34:36,084 --> 01:34:37,124
Should we go around?

1144
01:34:37,124 --> 01:34:37,724
Oh, man.

1145
01:34:37,724 --> 01:34:39,204
What do you think?

1146
01:34:39,204 --> 01:34:39,964
Sure.

1147
01:34:39,964 --> 01:34:40,644
I like that.

1148
01:34:40,644 --> 01:34:42,804
Dan immediately comes back on backwards hat.

1149
01:34:42,804 --> 01:34:52,056
Here we go Dan S 500 odds What do you think coin flip 50 50 that a non dan come on

1150
01:34:53,416 --> 01:34:59,896
coin flip it it's it's so it's so tough okay so s p like what are the dates to look forward to

1151
01:34:59,896 --> 01:35:04,216
september 5th or september 12th i believe september 12th is when the announcement comes

1152
01:35:04,216 --> 01:35:09,976
out of the companies that are added and deleted and then september 19th is when it's effective um

1153
01:35:13,096 --> 01:35:20,436
It's so hard to say. The S&P has a B minus issuer credit rating on strategy right now.

1154
01:35:22,876 --> 01:35:29,116
And I'm sure there's probably been some conversations on credit quality over the past, I don't know, 12 months.

1155
01:35:29,116 --> 01:35:30,376
and

1156
01:35:30,376 --> 01:35:32,676
it's just

1157
01:35:32,676 --> 01:35:34,496
I don't

1158
01:35:34,496 --> 01:35:35,816
I think it's unlikely

1159
01:35:35,816 --> 01:35:38,176
I think there's going to be another period of

1160
01:35:38,176 --> 01:35:41,116
they're going to get declined

1161
01:35:41,116 --> 01:35:43,076
for X, Y, and Z volatility

1162
01:35:43,076 --> 01:35:44,896
and

1163
01:35:44,896 --> 01:35:47,076
it gets delayed

1164
01:35:47,076 --> 01:35:49,036
to another quarter or another period of time

1165
01:35:49,036 --> 01:35:50,656
that's my initial thought

1166
01:35:50,656 --> 01:35:54,856
so I think 25% probability

1167
01:35:54,856 --> 01:35:55,996
they get included

1168
01:35:55,996 --> 01:35:58,236
Sole

1169
01:35:58,236 --> 01:36:07,676
given a long enough time horizon it's 100 but if we're just talking about first go yeah probably not

1170
01:36:07,676 --> 01:36:15,496
it's tough i mean you look you look back at tesla tesla didn't get included the first time and they

1171
01:36:15,496 --> 01:36:22,056
had they had four quarters in a row of of positive earnings now what what people will say is like

1172
01:36:22,056 --> 01:36:27,256
strategies had an accounting gimmick to that's led to positive earnings well it's like no that's

1173
01:36:27,256 --> 01:36:31,736
that's actual capital like there's actual return that they're holding an unrealized gain on the

1174
01:36:31,736 --> 01:36:37,576
balance sheet so you can argue about that but the reality is the company was 500 million dollars

1175
01:36:37,576 --> 01:36:41,736
had 500 million dollars in cash five years ago now they got 70 billion dollars in cash

1176
01:36:41,736 --> 01:36:46,136
what do you like how how much do you think that's going to scale and grow the next five years the

1177
01:36:46,136 --> 01:36:53,416
next 10 years it's it's probably a lot um it's like do you do you want that included in the s p

1178
01:36:53,416 --> 01:37:01,416
500 or not how relevant is the s p 500 well it's three of the five largest index etfs on the planet

1179
01:37:01,416 --> 01:37:09,336
so it's pretty relevant now but the qqq is what i don't know 10 years old qqq is 10 years old and

1180
01:37:09,336 --> 01:37:18,376
now it's the fourth largest index etf on the planet and what's the change of tone jeff i mean

1181
01:37:18,376 --> 01:37:23,336
i thought this was a big part of the whole deal what do you mean like i mean we were talking

1182
01:37:23,336 --> 01:37:28,136
100 likelihood of s&p inclusion oh no i never i never thought i never thought it was a hundred

1183
01:37:28,136 --> 01:37:35,416
percent inclusion he said hold on he said eligibility eligible people thought that it

1184
01:37:35,416 --> 01:37:41,656
meant inclusion but what you said was l they will be eligible for fulfilling the requirements based

1185
01:37:41,656 --> 01:37:50,056
upon four cumulative quarters of a positive eps yeah right right but i thought s p was kind of the

1186
01:37:50,056 --> 01:37:54,936
biggest part of the whole thing like smp the monster that's the final boss it's the final boss

1187
01:37:55,816 --> 01:38:04,056
mstr the s p 500 needs mstr mstr doesn't need the sp 500 and that's a stance i've taken this entire

1188
01:38:04,056 --> 01:38:09,656
time and i i think it's controversial i think this is the biggest topic of 2025 like in all of finance

1189
01:38:10,536 --> 01:38:18,536
um and it will be controversial like i i think they will not get included there's a probability

1190
01:38:18,536 --> 01:38:22,456
that they get included i personally think they will not get included and there's going to be a

1191
01:38:22,456 --> 01:38:28,696
lot of noise about it and it's going to be like what is this company and you know you have another

1192
01:38:28,696 --> 01:38:33,656
quarter q3 like what they're already sitting on a three billion dollar gain with bitcoin at 114

1193
01:38:34,616 --> 01:38:40,696
114 000 if that goes back up to where it was earlier uh i don't know a week a week or two ago

1194
01:38:41,656 --> 01:38:47,736
you're looking at another eight ten billion dollar gain and it starts to become undeniable

1195
01:38:47,736 --> 01:38:52,056
at that point and almost a little bit of a self-fulfilling prophecy and it's like what

1196
01:38:52,056 --> 01:38:56,456
does the rest of the year look like what's q3 q4 look like does more capital come in the door

1197
01:38:56,456 --> 01:39:02,856
i don't know like how does market cap grow good question do people front run it i don't know what

1198
01:39:02,856 --> 01:39:08,856
does that look like i it it's it's bullish it is bullish that it's still on the horizon

1199
01:39:08,856 --> 01:39:18,436
and i don't think there's incentive for anybody to sell into inclusion really because this is like

1200
01:39:18,436 --> 01:39:23,736
this is a this is a mag 7 asset it's going to the top um it's this is not lululemon where you've got

1201
01:39:23,736 --> 01:39:27,976
incentive to front run it and sell the index inclusion and like never hold it again like

1202
01:39:27,976 --> 01:39:35,176
this is the final box unless and that was over 2.5 hey hey by the way i just did a poll can you

1203
01:39:35,176 --> 01:39:36,256
Can you guys do that?

1204
01:39:36,496 --> 01:39:37,836
Please retweet the poll.

1205
01:39:38,256 --> 01:39:44,276
I gave you four choices, 0% to 25%, 26% to 50%, 51% to 70%, and so forth.

1206
01:39:44,656 --> 01:39:46,216
So please retweet the poll.

1207
01:39:46,536 --> 01:39:48,936
Let's get some numbers for the listeners that are in here.

1208
01:39:49,316 --> 01:39:54,056
We have, what, 9,000, almost 10,000 people on the thread.

1209
01:39:54,176 --> 01:39:57,296
So please respond back to the poll to see what the sentiment is right now.

1210
01:39:57,296 --> 01:40:03,496
What I think will happen is I'm one out of four.

1211
01:40:03,496 --> 01:40:06,536
So I'm 0% to 25% that it will get in.

1212
01:40:06,896 --> 01:40:18,916
What I think will happen is if it does get in, that will validate, and just for lack of a better term, conspiracy theory that they changed the guidance because they knew it was going to happen.

1213
01:40:19,596 --> 01:40:21,716
I don't think they know that they're getting in.

1214
01:40:21,776 --> 01:40:22,816
I just don't think they do.

1215
01:40:23,076 --> 01:40:27,616
But if they do get in, that would seem to be a plausible reason why they changed their guidance.

1216
01:40:28,436 --> 01:40:29,796
And so does that matter?

1217
01:40:29,916 --> 01:40:30,476
I don't know.

1218
01:40:30,476 --> 01:40:34,756
But what I do know is that they are going to get into the S&P 500.

1219
01:40:34,976 --> 01:40:36,536
They were in the S&P 600.

1220
01:40:37,496 --> 01:40:45,336
And so for this reason, so by the way, Tesla was never in the S&P 600 before the S&P 500.

1221
01:40:45,456 --> 01:40:45,816
Is that true?

1222
01:40:46,136 --> 01:40:47,056
Yeah, they were never profitable.

1223
01:40:47,716 --> 01:40:48,456
They were never profitable.

1224
01:40:48,676 --> 01:40:51,276
That's the problem that when your EPS is zero.

1225
01:40:51,916 --> 01:40:53,516
And by the way, I do want to say this.

1226
01:40:54,016 --> 01:40:58,556
All non-dividend paying stocks subscribe to the greater fool theory equities

1227
01:40:58,556 --> 01:41:02,416
because the only way that you could sell that stock and make money

1228
01:41:02,416 --> 01:41:06,776
is to some other person or entity that pays you more than what you bought it for.

1229
01:41:07,176 --> 01:41:12,836
So all non-dividend paying equities subscribe to the greater fool theory

1230
01:41:12,836 --> 01:41:15,656
that you have to have somebody pay you more than what you bought it for.

1231
01:41:16,256 --> 01:41:17,856
And so that's an important thing to keep out.

1232
01:41:17,936 --> 01:41:19,096
That's different than a Ponzi scheme.

1233
01:41:19,156 --> 01:41:21,956
I don't want to talk about that, but that's the way that exists.

1234
01:41:21,956 --> 01:41:25,536
And so for this particular case, I think the S&P 500 is important.

1235
01:41:25,776 --> 01:41:26,876
I don't think they're going to get in.

1236
01:41:26,876 --> 01:41:34,456
I would rather be under-promised and over-deliver and then see what happens.

1237
01:41:34,716 --> 01:41:40,656
And I do think that he would have fulfilled basically all of his objectives that he wanted to do.

1238
01:41:41,836 --> 01:41:44,316
This is a committee decision that happens behind closed doors.

1239
01:41:44,476 --> 01:41:45,716
I mean, I know Josh has come out.

1240
01:41:45,876 --> 01:41:46,916
He's super adamant.

1241
01:41:47,056 --> 01:41:50,856
He saw it in a timeline that they get added in the S&P 500.

1242
01:41:50,856 --> 01:42:02,656
It's just like, I don't know, I'm a bit more rational and think that the committee is likely to, depends if they understand Bitcoin or not, and how long that they've been looking at this.

1243
01:42:03,116 --> 01:42:05,756
If they've been looking at it for a long time, maybe they get included.

1244
01:42:06,216 --> 01:42:14,356
If they haven't, and the earnings in Q2 was a surprise, then maybe not.

1245
01:42:14,936 --> 01:42:16,236
Also, who's the committee?

1246
01:42:19,196 --> 01:42:20,036
That's my question.

1247
01:42:20,036 --> 01:42:29,556
is it howard lutnik hold on guys it's just a bunch of dudes i'll see if i can find the thread

1248
01:42:30,516 --> 01:42:35,876
there was a thread that somebody did a while back and they tracked everybody down they tracked

1249
01:42:35,876 --> 01:42:40,116
everybody down yeah they did they tracked out who they were and they were actually they were actually

1250
01:42:43,156 --> 01:42:47,876
no they actually figured out who the people were and somebody revert did some like pi work to

1251
01:42:47,876 --> 01:42:52,756
figure out who these people were. So I'll see if I can find the old thread. It's on X. Somebody else

1252
01:42:52,756 --> 01:42:59,556
could look it up. S&P 500, committee approval, Bitcoin, MSTR is probably the keywords. And they

1253
01:42:59,556 --> 01:43:03,316
tracked down all the, they figured out all the people that were on the committee and they said

1254
01:43:03,316 --> 01:43:10,676
that these people are Bitcoin friendly. So I think the S&P 500, I think they both need each other.

1255
01:43:10,676 --> 01:43:17,236
I think that MSTR needs it to absorb the shares that they sold. And I think that S&P 500

1256
01:43:17,236 --> 01:43:22,196
also wants that index to go up and so i think that that would be i think would be a good

1257
01:43:22,196 --> 01:43:26,756
inclusion and i think it would be good for mscr do i think it will lead to some god candle no

1258
01:43:28,676 --> 01:43:34,356
i think i like i like the probability of it having some time in 2025. i'm not sure about the

1259
01:43:35,156 --> 01:43:40,596
the first two two inclusions then so there's september 19th and december 19th jeff i can't

1260
01:43:40,596 --> 01:43:45,636
share my screen but oh yeah i made that i made that collage is there any way you could pull that

1261
01:43:45,636 --> 01:43:52,196
oh yeah yeah are we talking about 444 after go hit it right now while i pull this out

1262
01:43:53,316 --> 01:43:59,876
what do you guys think or we're going to 444 we're going all the way up have you looked at the dtc

1263
01:44:00,676 --> 01:44:06,196
if you look at bitcoin price in gold it's possible i just want to say that did you know that four

1264
01:44:06,196 --> 01:44:12,676
four did you know that four four four is an angel number is it really yeah i was talking to my wife

1265
01:44:12,676 --> 01:44:16,756
and of course you know she doesn't really wait wait wait what's what's an angel no i don't know

1266
01:44:16,756 --> 01:44:24,596
what an angel number is yeah exactly it it means stuff it was like uh financial independence and

1267
01:44:24,596 --> 01:44:29,316
uh things like that but yeah so you know i'm talking trying to talk to my wife about bitcoin

1268
01:44:29,316 --> 01:44:34,036
and strategy and i mentioned this 444 and she's like oh that's an angel number so yeah i was just

1269
01:44:34,036 --> 01:44:35,136
just as surprised as you were.

1270
01:44:36,816 --> 01:44:37,376
Is it also

1271
01:44:37,376 --> 01:44:39,116
a divine intervention?

1272
01:44:40,856 --> 01:44:41,916
Is it also one of those

1273
01:44:41,916 --> 01:44:43,876
369 numbers? You know how Nikola Tesla

1274
01:44:43,876 --> 01:44:45,876
said the key to the universe

1275
01:44:45,876 --> 01:44:47,376
lies in the numbers 369?

1276
01:44:49,236 --> 01:44:49,716
Probably

1277
01:44:49,716 --> 01:44:51,756
because 4 plus 4 plus 4 is 12

1278
01:44:51,756 --> 01:44:53,076
and 1 plus 2 is 3.

1279
01:44:54,916 --> 01:44:55,356
Okay.

1280
01:44:56,876 --> 01:44:57,316
Math.

1281
01:44:57,396 --> 01:44:58,896
This is investment-grade stuff, y'all.

1282
01:44:58,896 --> 01:45:01,076
This is the investment-grade podcast.

1283
01:45:02,116 --> 01:45:02,796
So yeah, I think

1284
01:45:02,796 --> 01:45:09,276
if i'm going to 444 you're going to you're going to load up on ibid calls i bet calls

1285
01:45:10,316 --> 01:45:14,956
the uh is that financial advice then hillary yeah mason mason and i looked at the numbers

1286
01:45:14,956 --> 01:45:20,956
if bitcoin goes to 444 you could 100x your 100 ibit calls not that we're saying you should do that

1287
01:45:23,596 --> 01:45:27,676
hold on let's just think about this right now so if bitcoin goes to 444 000

1288
01:45:27,676 --> 01:45:36,416
strategy would hold 280 billion dollars of bitcoin how how how many prefs would they

1289
01:45:36,416 --> 01:45:43,296
ben you're like whoa how many prefs would they have i don't know let's say like 20 20 billion

1290
01:45:43,296 --> 01:45:48,676
20 billion probably the same number they have now if it's the same number they have now like the

1291
01:45:48,676 --> 01:45:53,256
beast the b the btc rating on that let's just say it's 7 billion they can only get to 7 billion

1292
01:45:53,816 --> 01:45:57,976
the btc rating on that would be almost 40 like for the entire stack

1293
01:46:00,216 --> 01:46:06,136
that would be insane like at that point yeah like buried under amount of collateral buried

1294
01:46:06,936 --> 01:46:14,216
it's buried under collateral i'm long jet blue bonds just you want that point the other one dan

1295
01:46:14,216 --> 01:46:18,936
you should look at quick greet like the concrete there's quick create concrete preferred equity

1296
01:46:18,936 --> 01:46:24,536
out there and i think it's also like talk about illiquid it's it's as liquid as the concrete they

1297
01:46:24,536 --> 01:46:32,216
sell um and they have like yeah no capital there's a lot of pawns out there there's so many we should

1298
01:46:32,216 --> 01:46:37,896
probably start a grassroots effort to you know go out and scrape all these prefs that are out there

1299
01:46:37,896 --> 01:46:42,136
and all these bonds that are out there and go find the institutional investors that are holding them

1300
01:46:42,936 --> 01:46:48,616
and send them the pitch deck on these prefs and see if we can drain that capital out of those

1301
01:46:48,936 --> 01:46:52,856
illiquid nonsense holdings that they've got essentially something with the

1302
01:46:54,136 --> 01:47:00,056
dan you can go sell a billion dollars of this stuff but i think i think it's strategy if they're

1303
01:47:00,056 --> 01:47:06,376
smart they're going to find uh smart young men and women like like dan hillary over there and and

1304
01:47:07,336 --> 01:47:13,656
send them knocking to to capital allocators and and give give them a pitch like i said yeah

1305
01:47:13,656 --> 01:47:19,336
very much in their minds and is the capital allocator now yeah that's true everyone's trying

1306
01:47:19,336 --> 01:47:25,736
to give dan a new job you know dan is the capital allocator the uh dan you brought up the bitcoin

1307
01:47:25,736 --> 01:47:29,896
gold chart and matt was looking at this the other day on the hurdle right podcast and i think it's uh

1308
01:47:31,656 --> 01:47:37,096
it's literally it it's an interesting chart yeah it's like the answer to why 444 could happen

1309
01:47:37,096 --> 01:47:45,496
like that is the answer yeah because bitcoin has preceded or gold gold run has preceded bitcoin

1310
01:47:45,496 --> 01:47:49,416
and that's what it's done in the past too and it once that once that starts to break

1311
01:47:50,136 --> 01:47:57,016
it's almost like altcoin season it's like bitcoin is altcoin for gold completely and then also if

1312
01:47:57,016 --> 01:48:04,216
you look at bitcoin priced in gold as a power law it is a power law like it's weird because gold is

1313
01:48:04,216 --> 01:48:08,056
kind of a speculative asset say that again you know how like you can look at bitcoin price in

1314
01:48:08,056 --> 01:48:12,696
usd as a power law right a decaying exponential that's how like it's essentially sailor's model

1315
01:48:12,696 --> 01:48:18,616
you can do the same with with gold instead btc gold instead of btc and if you look at it that

1316
01:48:18,616 --> 01:48:21,976
way we're along you know how there's different parts of the power law you've got the trend line

1317
01:48:21,976 --> 01:48:26,216
you've got the floor and then you've got the bubble area we're we're still on the floor we've

1318
01:48:26,216 --> 01:48:31,096
been trending on the floor of the btc gold chart for the past three years we haven't even hit the

1319
01:48:31,096 --> 01:48:37,456
the trend line. Yeah. So, you know, it depends how you look at it. I mean, who knows? Meanwhile,

1320
01:48:37,456 --> 01:48:45,176
people think it's dead, double topped. We hit 124. We're going back down to 50, 60. And there's

1321
01:48:45,176 --> 01:48:48,916
just bearishness everywhere. And I think it's hard to say that because like I've been listening

1322
01:48:48,916 --> 01:48:53,256
to and reading a lot of Howard Marks recently and you look at all his work on credit cycles

1323
01:48:53,256 --> 01:48:57,976
and historical investing. And if you think of like Bitcoin credit cycles, which I think is

1324
01:48:57,976 --> 01:49:01,136
actually kind of interesting now that we're trying to pioneer Bitcoin back credit. I mean,

1325
01:49:01,176 --> 01:49:07,636
if the credit spreads are 500 basis points and the best, you know, over collateralized Bitcoin

1326
01:49:07,636 --> 01:49:12,556
credit, which is strife, I mean, there isn't a lot of loose capital. And as we've seen the Bitcoin

1327
01:49:12,556 --> 01:49:17,616
treasury is tightening up, access to capital and credit in the Bitcoin market isn't that readily

1328
01:49:17,616 --> 01:49:21,416
available right now. So I think it's actually a great indicator that, you know, there is room to

1329
01:49:21,416 --> 01:49:25,956
run. There isn't euphoria in terms of BTC credit yet. So that's something I'm looking at a lot.

1330
01:49:25,956 --> 01:49:33,576
And this also, there's this like kicker element of the market re-evaluating risk.

1331
01:49:34,556 --> 01:49:51,176
Like does market re-evaluate risk and like how much capital shakes out of the existing risk infrastructure to adopt the new instruments with a better risk profile?

1332
01:49:52,996 --> 01:49:54,776
And what's the speed of that?

1333
01:49:54,776 --> 01:49:59,836
what's the speed of that and like that that might that's a good question i have no idea

1334
01:49:59,836 --> 01:50:06,236
but i think it could get violent right i think this is an s curve of adoption of people like

1335
01:50:06,236 --> 01:50:12,576
wrapping their heads around this it might take a year it might take eight i have no idea

1336
01:50:12,576 --> 01:50:19,856
but i think it's quite possible that that that risk component gets re-evaluated everywhere

1337
01:50:19,856 --> 01:50:23,616
But let's keep an eye on it.

1338
01:50:23,616 --> 01:50:25,096
Let's keep an eye on it.

1339
01:50:25,096 --> 01:50:26,096
That's fun stuff.

1340
01:50:26,096 --> 01:50:28,236
The investment grade Bitcoin podcast.

1341
01:50:28,236 --> 01:50:39,508
All right Mason you wanted me to share the type of noise screen I loved it Fucking juice wrench I can see any think it just one thing he knows

1342
01:50:42,228 --> 01:50:47,028
it feels like it feels to me like someone's paying him and i know that's a little like

1343
01:50:48,148 --> 01:50:54,388
weird to see yeah but like out of nowhere and then and then he reads the uh he reads the letter

1344
01:50:55,188 --> 01:51:00,628
to mstr investors essentially covering his ass legally which i loved by the way

1345
01:51:00,628 --> 01:51:06,948
yeah hilarious i can appreciate good entertainment i mean i know he's basically trolling us but i

1346
01:51:06,948 --> 01:51:14,228
can appreciate good entertainment it did make me laugh yeah but i i've just been noticing a pattern

1347
01:51:14,228 --> 01:51:20,548
of of a lot of big accounts with i i don't know if it's if the incentive is engagement i don't know

1348
01:51:20,548 --> 01:51:26,068
if the incentive is outside money i don't know if if they just generally don't understand it and and

1349
01:51:26,068 --> 01:51:32,708
think they're justified and in fighting it um and i think all of these things could be true

1350
01:51:32,708 --> 01:51:40,228
simultaneously so it's just something that i i've really noticed the past week or so and i think um

1351
01:51:41,028 --> 01:51:50,708
the the equity guidance uh also played a part in that the the update yeah they like recognize that

1352
01:51:50,708 --> 01:51:54,468
there's a lot of energy in the market talking about this thing right now and you think about

1353
01:51:54,468 --> 01:51:59,668
like uh this choose rich guy and you go look at all of his content it's all like it's clickbait

1354
01:51:59,668 --> 01:52:04,788
stuff right it's stuff to like make you watch he's like every single one of his videos he's got his

1355
01:52:04,788 --> 01:52:09,428
hand on his head like he's like oh my god you know i just lost a lot of money or whatever like every

1356
01:52:09,428 --> 01:52:15,108
single one he's got the same formula for every single one of them and what i think happened is

1357
01:52:15,108 --> 01:52:19,668
there was uh he talked about he did his first video on microstrategy it was like lightning in

1358
01:52:19,668 --> 01:52:27,268
a bottle right it he he struck gold he saw that the feedback was more electric than anything else

1359
01:52:27,268 --> 01:52:31,428
he's posted in the past like a month he's like let me do it again let me see if i can do it again

1360
01:52:32,068 --> 01:52:36,788
and like i don't know how much money is he going to make from x on these three posts or four posts

1361
01:52:36,788 --> 01:52:44,708
that he put out so so i five grand you know like it's three thousand dollars who knows i mean this

1362
01:52:44,708 --> 01:52:50,388
is this is crazy i do want to point i don't think this is on your list there's this guy uh kenneth s

1363
01:52:50,388 --> 01:52:57,028
rogoff who's a harvard economist okay and he said it's more likely that bitcoin he just launched his

1364
01:52:57,028 --> 01:53:02,468
new book and he's saying it's more likely he said a decade ago it's more likely that bitcoin um will

1365
01:53:02,468 --> 01:53:08,228
be worth a hundred dollars than a hundred k and he goes what did i miss and so the guy this this

1366
01:53:08,228 --> 01:53:14,908
post is from 14 hours ago or one day ago. And he's saying that it's unlikely to do this. It has

1367
01:53:14,908 --> 01:53:21,208
actually done it. And then he doubles down again. And meanwhile, Harvard, I believe, is buying spot

1368
01:53:21,208 --> 01:53:31,568
Bitcoin ETF for their endowment. So I don't know how somebody can say that after you were proven

1369
01:53:31,568 --> 01:53:37,108
wrong. Why would you even announce that? Can somebody explain that to me? Because I am not

1370
01:53:37,108 --> 01:53:41,968
smart enough to understand how somebody could be a Harvard economist and be that freaking dumb.

1371
01:53:42,968 --> 01:53:50,168
Am I missing something? No, no. This whole space is really interesting.

1372
01:53:51,928 --> 01:53:58,028
Mason, I think you hit on a good point. This is one of the main reasons that we created True North.

1373
01:53:58,608 --> 01:54:05,088
I created True North. Anybody's here is that this happened in GameStop as well. There was a period

1374
01:54:05,088 --> 01:54:11,968
of time where there was a ton of euphoria and i've talked with uh trollstein in our group as well and

1375
01:54:14,128 --> 01:54:21,248
you can pay bots you can you can you can literally pay bots to to do whatever you want them to do

1376
01:54:21,248 --> 01:54:25,808
and now you've got ai bots out in the market and a lot of you probably don't even know that they

1377
01:54:25,808 --> 01:54:31,808
exist one of them that that's really interesting like you look up site bringer i think is is a ai

1378
01:54:31,808 --> 01:54:38,848
agentic bot on twitter that actually has really interesting content but that that's a good example

1379
01:54:38,848 --> 01:54:45,088
of like somebody doesn't maybe somebody like oversees it but nobody actually runs it and

1380
01:54:45,968 --> 01:54:54,768
these can be deployed very easily and like this is like uh tinder in a dry field where you light

1381
01:54:54,768 --> 01:55:02,208
one match and you throw it in and it catches like wildfire and that is social media and like that

1382
01:55:02,208 --> 01:55:10,608
energy gets captured and it spreads which is like what anybody that's taking a short thesis would

1383
01:55:10,608 --> 01:55:18,928
want uh they they would want an opportunity to capitalize on that potential volatility and the

1384
01:55:18,928 --> 01:55:24,688
cost associated with doing that is very small if you have a significant amount of capital at risk

1385
01:55:24,688 --> 01:55:29,448
So I wouldn't put it past some of these,

1386
01:55:29,448 --> 01:55:30,808
like some of these people are probably paid.

1387
01:55:30,808 --> 01:55:34,328
These are, and I mean, they're paid by Twitter

1388
01:55:34,328 --> 01:55:35,168
at the end of the day,

1389
01:55:35,168 --> 01:55:36,368
because some of the big profiles,

1390
01:55:36,368 --> 01:55:38,668
they get paid anyway for making content.

1391
01:55:38,668 --> 01:55:42,388
So they either see opportunity to capitalize on the content

1392
01:55:42,388 --> 01:55:45,348
or potentially getting paid by somebody else,

1393
01:55:45,348 --> 01:55:48,908
or there's bots in between in some of this as well.

1394
01:55:48,908 --> 01:55:53,688
So, I mean, that was one of the general reasons

1395
01:55:53,688 --> 01:56:00,328
i put this up is to have like rational humans that are actually operating in a space that

1396
01:56:01,368 --> 01:56:10,248
can block out some of the noise and provide signal with rationality so hey jeff can i can

1397
01:56:10,248 --> 01:56:14,168
i've been researching these when are you going to set loose the positive sentiment bots that's

1398
01:56:14,168 --> 01:56:18,248
a good point i gotta show that wait i gotta show this can i show my desk yeah yeah yeah

1399
01:56:18,248 --> 01:56:24,488
yeah everybody watch everybody watch jeff's face you ready yeah you have to share your screen

1400
01:56:24,488 --> 01:56:29,688
allowed to share screen okay share screen hopefully i don't have anything bad on it

1401
01:56:29,688 --> 01:56:35,528
sharing china screen check this out here we go grok referenced you oh you gotta make it you gotta

1402
01:56:35,528 --> 01:56:40,088
make it bigger oh sorry how do i make it i just drag it like this zoom just zoom oh just zoom in

1403
01:56:40,088 --> 01:56:45,688
hold on one second uh view mclaren mclaren porsche

1404
01:56:48,248 --> 01:56:56,408
there you go okay there you go there okay listen look at this based on mstr's 100 billion market

1405
01:56:56,408 --> 01:57:01,608
cap positive q2 earnings and liquidity it meets s&p 500 criteria criteria analysts like jeff

1406
01:57:01,608 --> 01:57:10,088
walton give 91 percent odds if bitcoin stays above 95k to 114k but bitcoin grok is referencing

1407
01:57:10,088 --> 01:57:16,968
wow jeff walton congrats congratulations that's crazy could you did you know this do you know that

1408
01:57:16,968 --> 01:57:24,408
rock is i mean it's publicly available dude you made it in the market you made it yeah sure

1409
01:57:26,168 --> 01:57:32,648
but maybe point the bots jeff we need you more bullish about s p 500 maybe yeah that was the uh

1410
01:57:32,648 --> 01:57:39,608
that was the qualification uh probability um that was when i was calculating it by day

1411
01:57:39,608 --> 01:57:45,688
it's like how many days and the probability um that's interesting by the way you know i want to

1412
01:57:45,688 --> 01:57:50,648
say this you know everything that we've talked about i want to reflect back and we'll probably

1413
01:57:50,648 --> 01:57:57,208
wrap up pretty quickly but you know oh ptc palm beach that's his post congratulations you did that

1414
01:57:57,208 --> 01:58:03,688
thank you for using ai you know i i could not predict what would have happened when we we all

1415
01:58:03,688 --> 01:58:08,968
met for the first time at in in santa monica in october we're all going to be in new york city

1416
01:58:08,968 --> 01:58:16,968
Everybody should come to Tim Kahn's event, the Bitcoin Unconference on September 17th.

1417
01:58:16,968 --> 01:58:19,268
But, you know, we talk about these things.

1418
01:58:19,848 --> 01:58:26,568
And what's happened is if you were to repeat this back, everything that's happened, and we don't need to go through this because everybody was on this call.

1419
01:58:28,028 --> 01:58:29,908
You can't make this stuff up.

1420
01:58:30,788 --> 01:58:32,228
You can't make any of this up.

1421
01:58:32,328 --> 01:58:36,048
This is like the craziest thing that's happened, but it's all reality.

1422
01:58:36,048 --> 01:58:39,628
And for that, I'm happy that I've been in this with this team.

1423
01:58:40,028 --> 01:58:43,728
I'm happy that I got to go to Strategy World multiple times.

1424
01:58:43,828 --> 01:58:46,848
I met Michael Saylor multiple times and Fong and the exec team over there.

1425
01:58:47,128 --> 01:58:48,828
And you guys also to do this.

1426
01:58:49,248 --> 01:58:51,068
And sometimes you're like, what am I missing?

1427
01:58:51,508 --> 01:58:52,488
Are we sane?

1428
01:58:52,628 --> 01:58:53,508
Is this real?

1429
01:58:54,588 --> 01:58:56,948
Does Ben have any lights in his basement?

1430
01:58:57,188 --> 01:59:00,548
I mean, we're just trying to unravel the mysteries of the world.

1431
01:59:01,048 --> 01:59:03,708
And 444 is an angel number.

1432
01:59:03,708 --> 01:59:09,628
I am 42's Hitchhiker's Guide to the Galaxy. Perfect numbers, integer, whatever.

1433
01:59:10,428 --> 01:59:15,148
And anyway, with that said, I want to thank you guys. I'm going to drop off. I think this is a

1434
01:59:15,148 --> 01:59:22,508
great call. I want people to realize that going back to what Ben said, you have to have your own

1435
01:59:22,508 --> 01:59:27,228
conviction. You cannot rent it. And so if you have your conviction, if you do your homework,

1436
01:59:27,548 --> 01:59:33,628
if you do a proper asset allocation, don't YOLO into things 100%. You don't know anything about it.

1437
01:59:33,708 --> 01:59:40,048
don't take massive leverage. I haven't had any options in over four months, zero. So weathering

1438
01:59:40,048 --> 01:59:44,948
this downturn for me is I'm enjoying the summer. I think that people should step away from the

1439
01:59:44,948 --> 01:59:50,228
screen sometimes, go have some fun, enjoy the next two weeks, come and visit us in New York.

1440
01:59:50,348 --> 01:59:56,228
We'll be at PubKey. You'll get to meet us all in person. And thank you guys. It's been a pleasure

1441
01:59:56,228 --> 02:00:00,408
working with you guys. I'll be back on a course again. And then that's all I want to say. And Dan,

1442
02:00:00,408 --> 02:00:05,608
keep up the great content on bonds because i have to listen to you because i don't really know much

1443
02:00:05,608 --> 02:00:14,488
about bonds i didn't need a grand and mason you should chime in more thanks grant agreed agreed

1444
02:00:14,488 --> 02:00:19,448
okay let's um let's let's wrap this up a little housekeeping before we do final thoughts uh yeah

1445
02:00:19,448 --> 02:00:26,088
to your point the grain uh we will be at tim kotsman's unconference this is uh september 17th

1446
02:00:26,088 --> 02:00:28,888
18th, I believe, 17th, September 17th.

1447
02:00:30,688 --> 02:00:33,728
You can use the promo code true north.

1448
02:00:33,768 --> 02:00:36,128
And I think that's 15% off a ticket.

1449
02:00:36,128 --> 02:00:38,488
If you want to go, there are a few tickets left.

1450
02:00:38,488 --> 02:00:39,648
Sailor is going to be there.

1451
02:00:39,648 --> 02:00:41,848
They've got a whole process set up.

1452
02:00:41,848 --> 02:00:43,248
There's going to be some happy hours.

1453
02:00:43,248 --> 02:00:46,808
I think we will do like an impromptu true north thing there at some point.

1454
02:00:47,128 --> 02:00:48,688
And I think a majority of us will be there.

1455
02:00:48,688 --> 02:00:51,288
So if you want to meet us in person, if you want to have a chance to meet

1456
02:00:51,288 --> 02:00:54,168
Sailor or any of those other folks in person, check it out.

1457
02:00:54,168 --> 02:00:57,808
Also, New York this time of year, it'll be buzzy.

1458
02:00:57,808 --> 02:00:59,248
I think it'll be buzzing.

1459
02:00:59,248 --> 02:01:01,068
You'll hear a lot of excitement.

1460
02:01:01,068 --> 02:01:02,288
People excited about Q3, Q4.

1461
02:01:02,288 --> 02:01:04,408
It might be an exciting event to attend.

1462
02:01:04,408 --> 02:01:06,768
The code is TRUE NORTH15 for the-

1463
02:01:06,768 --> 02:01:08,408
TRUE NORTH15.

1464
02:01:08,408 --> 02:01:09,408
All caps?

1465
02:01:09,408 --> 02:01:10,408
All caps.

1466
02:01:10,408 --> 02:01:11,828
All caps, TRUE NORTH15.

1467
02:01:11,828 --> 02:01:16,248
Additionally, this is the last True North episode until September 24th.

1468
02:01:16,248 --> 02:01:18,728
And we're probably going to get roasted for this at some point.

1469
02:01:18,728 --> 02:01:23,288
If the price of MSTR continues to go down, they're going to say we're fair weather people.

1470
02:01:23,288 --> 02:01:24,288
stuck in the market.

1471
02:01:24,288 --> 02:01:25,808
Yeah, here's the reality.

1472
02:01:25,808 --> 02:01:30,808
There's a ton of travel and there's holidays in between.

1473
02:01:31,848 --> 02:01:34,708
So next week, BTC Asia and Hong Kong, I'll be out.

1474
02:01:34,708 --> 02:01:35,948
The next week is Labor Day.

1475
02:01:35,948 --> 02:01:38,528
People are gonna be taking breaks and vacation.

1476
02:01:38,528 --> 02:01:40,528
The following week, I've got a corporate event.

1477
02:01:40,528 --> 02:01:42,108
I will be out of town.

1478
02:01:42,108 --> 02:01:44,488
The next week after that is Tim Kotzman's UnConference

1479
02:01:44,488 --> 02:01:45,628
in New York City.

1480
02:01:45,628 --> 02:01:47,768
And then the next week that we could possibly do this

1481
02:01:47,768 --> 02:01:48,708
is September 24th.

1482
02:01:48,708 --> 02:01:51,068
So we're gonna take a look.

1483
02:01:51,068 --> 02:01:52,068
Go ahead.

1484
02:01:52,068 --> 02:01:55,248
If we make S&P 500 inclusion, we're going to be on.

1485
02:01:55,768 --> 02:01:56,748
Yeah, we're doing one.

1486
02:01:57,108 --> 02:01:58,948
If this, we're going to do it live.

1487
02:01:59,048 --> 02:02:01,528
If we make an S&P 500, we'll do it live.

1488
02:02:01,888 --> 02:02:09,568
I'm sure there will be a little one-off conversations here and there between folks, but we're just, we're taking a break on Wednesdays until September 24th.

1489
02:02:10,228 --> 02:02:17,008
And yeah, we'll have conversations separately here and there and continue to put out our research and we'll get back together.

1490
02:02:17,468 --> 02:02:19,388
Yeah, I wanted to say real briefly.

1491
02:02:19,788 --> 02:02:22,668
So look, the unconference is kind of expensive right now.

1492
02:02:22,748 --> 02:02:26,948
The tickets now are $1,000 because it's very expensive to put an event in New York.

1493
02:02:27,228 --> 02:02:33,048
With that said, we'll be at PubKey, and I believe we'll be there on Tuesday and Wednesday night.

1494
02:02:33,408 --> 02:02:35,328
And those events, I believe those will be free.

1495
02:02:35,668 --> 02:02:41,528
So if you can get to New York City, if there's S&P 500 inclusion, that's going to be the biggest party ever.

1496
02:02:42,128 --> 02:02:45,348
Well, except for Strategy World, where we had a great time with our own event.

1497
02:02:45,708 --> 02:02:48,428
But this will be the biggest party ever, be in New York.

1498
02:02:48,428 --> 02:02:51,648
And that announcement you said is on the 12th and that's the Friday before.

1499
02:02:52,148 --> 02:02:54,948
And so if you hear that, then we're all going to be in New York City.

1500
02:02:55,388 --> 02:02:56,228
Sailor will be there.

1501
02:02:56,528 --> 02:02:59,468
Then, you know, the conference will sell out very quickly.

1502
02:02:59,648 --> 02:03:04,768
I understand it's expensive, but if you can get to New York City, come to these bar events,

1503
02:03:05,108 --> 02:03:08,088
most likely some sponsor will pick up the bar tab.

1504
02:03:08,388 --> 02:03:12,868
Nobody heard me say that, but when you come there, it sometimes happens.

1505
02:03:13,248 --> 02:03:14,808
So anyway, it'll be fun.

1506
02:03:14,908 --> 02:03:16,588
And so I wish that everybody comes to New York.

1507
02:03:16,588 --> 02:03:17,388
I think it'd be great.

1508
02:03:18,428 --> 02:03:25,428
Bingo. Okay. Final, final thoughts. Do we pass it around? We maybe we'll start with Dan.

1509
02:03:25,428 --> 02:03:30,428
Yeah, higher. Dan's going higher.

1510
02:03:30,428 --> 02:03:35,428
I bet calls, baby.

1511
02:03:35,428 --> 02:03:41,428
I love I love your response on everything. Everything now these days is just I big calls.

1512
02:03:41,428 --> 02:03:43,428
I mean, it's a great place to be.

1513
02:03:43,428 --> 02:03:47,008
When he closes his eyes, he sees preferreds on his eyelids.

1514
02:03:50,248 --> 02:03:54,528
STR on one, and then the other one's like C, K, F, D.

1515
02:03:54,708 --> 02:03:56,768
It's just like Rolodex going back and forth.

1516
02:03:57,088 --> 02:03:57,488
Exactly.

1517
02:03:58,008 --> 02:04:01,508
Dan asked if 444 is related to the 369 numbers.

1518
02:04:01,928 --> 02:04:03,708
So 4 plus 4 plus 4 is 12.

1519
02:04:03,808 --> 02:04:04,828
1 plus 2 is 3.

1520
02:04:06,408 --> 02:04:09,608
444K minus 84K is 360.

1521
02:04:10,448 --> 02:04:12,408
36 is a perfect square of 6.

1522
02:04:12,408 --> 02:04:17,168
and three plus six is nine so there's your three six nine oh my gosh

1523
02:04:17,168 --> 02:04:29,068
higher and uh yeah we're gonna bring soleil a tinfoil hat for the unconference in new york

1524
02:04:29,068 --> 02:04:33,348
and we'll keep that going okay mason over to you yeah i think um

1525
02:04:33,348 --> 02:04:48,088
regardless of sentiment, just based off of the technicals, the stock is severely undervalued

1526
02:04:48,088 --> 02:04:52,168
and a lot of Bitcoin treasuries are severely undervalued.

1527
02:04:52,168 --> 02:05:01,208
And if you have a thesis, if you have conviction, these are opportunities you hope to see if you're a long-term investor.

1528
02:05:01,208 --> 02:05:10,088
not financial advice not financial advice the sage wise mason all right ben over to you

1529
02:05:10,088 --> 02:05:16,788
no i just say uh you know stick to your guns on these things there's a lot of people that are

1530
02:05:16,788 --> 02:05:23,228
going to push you to tell you that your opinions are wrong on a topic that you know your long-term

1531
02:05:23,228 --> 02:05:29,228
thesis is broken you know that you don't have to adopt that as your opinion just because it's the

1532
02:05:29,228 --> 02:05:35,388
loudest noise in the room. So, you know, I know people, it gets really frustrating when you're

1533
02:05:35,388 --> 02:05:41,708
in public discourse and people are shouting you down or they're vehemently disagreeing and telling

1534
02:05:41,708 --> 02:05:47,248
you you're stupid for not seeing what they see. It's not always the case, right? Stereo runs wild.

1535
02:05:47,748 --> 02:05:53,528
And if you've built a thesis on your own and you've built the foundation of your own conviction

1536
02:05:53,528 --> 02:06:02,528
and you assess things to not have deviated from your overall thesis, then you stick to your guns.

1537
02:06:03,328 --> 02:06:09,768
And you don't need to change with the tides as other people do. If this is a five or 10 year

1538
02:06:09,768 --> 02:06:14,928
asset that you're looking at, if you think Bitcoin has a really legendary run coming over

1539
02:06:14,928 --> 02:06:20,648
the next 10 years and you're just getting into position, don't let day-to-day noise change that

1540
02:06:20,648 --> 02:06:21,848
thesis for you, right?

1541
02:06:21,848 --> 02:06:24,088
It's very easy to get scared out of positions.

1542
02:06:24,120 --> 02:06:33,840
But if you've done the work, if you've developed your position and it doesn't even need to match mine, you'll be able to hold firm when when the storms kick up and they'll kick up more.

1543
02:06:33,940 --> 02:06:35,120
This isn't going to be the last one.

1544
02:06:35,160 --> 02:06:36,120
There's going to be a lot of them.

1545
02:06:38,520 --> 02:06:39,460
Well said, Ben.

1546
02:06:39,580 --> 02:06:39,980
Well said.

1547
02:06:39,980 --> 02:06:43,200
OK, my final thoughts are risk.

1548
02:06:44,680 --> 02:06:52,160
Is the evolution of risk is what's separated the development of humanity.

1549
02:06:52,160 --> 02:06:55,860
and we're on the verge and the birth of digital risk.

1550
02:06:56,500 --> 02:07:00,620
And the market hasn't conceptualized it yet.

1551
02:07:00,680 --> 02:07:02,820
And we're literally writing the playbook

1552
02:07:02,820 --> 02:07:05,540
of what digital capital risk looks like.

1553
02:07:06,440 --> 02:07:08,600
And at the end of the day,

1554
02:07:09,680 --> 02:07:12,920
Bitcoin securities, Bitcoin backed equities,

1555
02:07:13,120 --> 02:07:16,060
leveraged Bitcoin equities or Bitcoin backed credit

1556
02:07:16,060 --> 02:07:17,420
isn't for everyone.

1557
02:07:18,280 --> 02:07:21,900
And you have the opportunity to just buy the underlying asset

1558
02:07:21,900 --> 02:07:25,900
and you can, but if you're interested in these other things, we're here to talk about it. We're

1559
02:07:25,900 --> 02:07:30,860
here to talk about our perspectives, our experiences in the market, and how we view the world. If you

1560
02:07:30,860 --> 02:07:35,520
want us to view the world in a different way, we're not going to do it because that would not

1561
02:07:35,520 --> 02:07:42,980
give us any differentiation in the market. We are giving you our perspective from the cutting edge

1562
02:07:42,980 --> 02:07:47,120
of the market, and we will continue to do that. And I will stick to my guns on that. And I think

1563
02:07:47,120 --> 02:07:50,660
everybody on the screen will stick to their guns in doing that because it's got us to where we are.

1564
02:07:50,660 --> 02:07:53,120
and we will continue pushing that forward.

1565
02:07:54,100 --> 02:07:55,720
So appreciate everybody for the time

1566
02:07:55,720 --> 02:07:58,560
and we are signing off for episode 37

1567
02:07:58,560 --> 02:08:00,220
and we will see you in late September.

1568
02:08:00,760 --> 02:08:01,160
Catch you later.