I feel like I can rule the world. I know I could be what I want to put my all in it like a Days on the Road Less Traveled never looking back. What's up everybody? We got a special guest in the house Michael sailor the have you heard the nickname they give you on YouTube the Giga Chad. Have you seen this
one?
I might have heard it once or
twice. So Michael go ahead shut. I was gonna ask yourself. Have you heard this nickname that they gave that they gave Michael sailor the crypto is no but that's a community, you know sort of giveth and taketh away, you know, they are extremely passionate and devoted but they are also, you know just nuts online like my Twitter mentions are unusable. Now, I'm sure Michaels are the same just because of that group, but they are funny also so they nicknamed him the Giga Chad because he is
Like it probably the most credible established person and Company with microstrategy to adopt Bitcoin in a major major way and really is driving the kind of institutional pick up of it. So if you're listening this you never heard of microcellular the reason to listen, this is pretty interesting guy how it really is your career, but most notably most known now for basically using his company microstrategy and buying about two billion dollars worth of bitcoin or they own to
billion dollars worth of bitcoin bought about I don't know how much you guys put in half a billion or a billion.
no, we
we bought 2.2 billion worth of bitcoin. We own about five a bit more than 5 billion depending upon the day more than 5 billion in Bitcoin. Okay. All right. You are you have a not everyone's gonna be able to see this, but you have a ship behind you.
Right like a huge. What is that? It's an antique handmade Model A 19th century model of a 17th century galleon.
Oh my God, I think I model the Amsterdam. I Galleon that sailed out of Amsterdam in the 17th century and it was it was made in the 19th century. So it's a very interesting piece. Are you are you a car guy?
I have a bunch of cars, but now I'm not a Car Guy. What's the coolest one you have? I probably I lean toward SUVs. I have a bunch of SUVs. I had a had a Lexus convertible that I used to love that. I drove a lot but I don't really drive a lot
so you can go see you can give Sam a grade Sam just sold his company came into a bunch of money and he bought what what did you buy Sam?
Okay, so I was driving at all this weekend and I've been getting made fun of I can't believe people are making fun of me. Do you know what a name?
G station wagon is like a Mercedes AMG I can imagine. Okay. So basically there's Mercedes which is everyone knows Mercedes and then there's AMG which is like a subsidiary and they basically put race car engines in the cars and I bought this put the problem about fast cars and cool cars is that they're like super unpractical mostly and but I wanted something that was like kind of fast and fun to drive but I wanted to be more practical and there's this thing called an AMG E63 wagon. It's a station wagon. It looks like a mom.
Omkar, except you can put your dog in the back and it has five seats in it, but still goes zero to 60 in three seconds. So I bought a souped-up
station wagon like the one of the
fastest cars in the road but it's a station wagon. That's my that's a currently what I'm driving right now works for you. Well, I was looking for someone to geek out on it. But I guess that your I would have for some reason I pegged you as a car guy, but I guess I'm wrong. I'll more into boats and planes Than Cars what?
What does that mean if you're into planes?
Well, I like I like aircraft because if an aircraft can go Mach 8 9 or Mach 8 5 you're allowed to legally fly it that fast when is maki like 2,000 miles an hour?
No mock had five been like like 500 knots like are something like that. So the point is like airplanes can fly at their full speed and and Yachts are boats can go at their full speed over the water. But an automobile that could go a hundred and sixty miles an hour. You don't very often get to do that legally. So so I like vehicles that you can operate.
Great at their design Point legally and safely.
Well, what plans do you have yelling as an engineer? I have a global Express XRS. Is that that's a big that's a big one, right? Yeah. Yeah. It's a big one fucking a before we get into Bitcoin stuff. And because Sean's been talking about you for like a year now because he was following a micro strategy and all that, but you own a ton of domain.
Names, right? Yeah, I bought a bunch. Like how many do you own now or how many have you I won't count on. I mean, I owned hundreds and hundreds but the ones that are our top level primary domain names about 16, like like words in the English language that everybody understands like I own Emma Frank. I own my own name. I own Michael.com. I also own my nickname Mike.com
So like my personal website of I've got it on michaels.com. You just type Michael to come to see all the stuff about me. Hope
yes, I'm gonna hope.com see where that takes. You
got a hope do yeah. Well, actually the coin is hope. So if you type hope.com, you'll get everything. There is another about Bitcoin. I actually re path hope to all of our Bitcoin resources and materials speaker.
I owned voice.com and I sold it for 30 million dollars a couple of years ago. That's the largest naked domain sale and a history of
domain. Just tell them tell the short version of that story. The story is kind of crazy. I've heard it once before but I would assume Sam and most people have not heard the story of selling voice.com. You bought all these early on in the web you kind of recognize do these are these are probably going to be valuable to own these names. There's only one. Yeah, there's only one owner of each of these names.
You own it. You hold it for a really long time like over a decade and at some point you decide. Okay, maybe we should see if somebody wants to buy some of these so tell the story of selling voice.com real quick.
Well, you know, I bought all these domains because I thought wouldn't it be great to own and part of the English language. I mean owning hope or owning voice. I mean eventually they'll be a Google Voice or they'll be you know, some some Telco company that will want to launch some service and what a great domain on the launcher.
on the on a word like voice.com
So we held them a long time and I think it's some point we were looking for joint ventures who are looking to commercialize them and we did commercialize a bunch. For example, I created a company called alarm.com and alarm.com is now publicly traded on NASDAQ. It's for five billion dollar market cap company and you can guess what it does. It actually integrates your home alarm into the internet, you know, and I created another company called Angel.com and we saw that for a bit more than a hundred million dollars an
Was actually a speech interactive voice response like SRI or Alexa before surgery and Lexi came along and so I had voice and I was holding it and we're looking for some kind of good commercialization and someone out of the blue they contacted us one of the domain Brokers and they said well, you know, do you want to sell it will give you a hundred fifty thousand?
And and you know, I was like someone came to me said they afternoon 50,000 said no, so I thought nothing of it because I just I couldn't see the point a week later. They come by the said well, they doubled it to 300,000. I said tell him now so a couple days later they go while the Brokers really insistent and so they went to 600,000.
I said no, so they said well, what should you say? So don't tell anything till I'm you know, like we're not interested. It's got to be something serious so they went to 1.2 million.
I said tell them no I said well they want to know what you want for it. I said well Cinema note or something and just tell them I said it's like it's the word voice in English language, right? So it's going to have to be something, you know north of I don't know. I don't think I said seven or eight eight figures, but I just said a lot of money.
And so it went on and they doubled again to two and a half million and then and then 5 million and then around 10 million. Then I said they said I had like 18 people in my office. They're like not 888 people that I looking at me like aren't you? Are you going to take the money? It's like a lot of money now I said
no, send them back at this point send them back and note pointing out that this is like the word voice in English language and it's and it's worth a billion dollars to the right company and they said well you going to give them a response I said
Okay, Tom 30 million. Tell him I'll take 30 million for it because I thought like if I didn't give them some number they would stop negotiating after you know, five NOS. So I said Tom 30 man. I don't want to sell it for 39. I want to sell it for a hundred million or more, but I guess I'll say 39. So the so at that point I said, well, you know, they offered you I think they up there. They're offered to like
Twelve million. I said tell him no, but if you want, I'll take a meeting with them. So when it got to 12 million I said I get on the phone for half an hour. So then we got on the phone and the call started with someone saying well, how about 22 million?
And I said, let me explain this is like my daughter like I'm willing to I'm willing to like marry her off but only to a man that values her more than I value her. So I value this domain, you know at 30 million. And so if you don't want to give me the 30, you know, I'm going to regret after I sell it.
A
lot of sellers remorse, but I would I would do it just to make the market but if you don't want to Value 230, I'll just keep it like, okay, we'll give you 30 I said, okay. So 30 you went you got it a 30 from a hundred K. So they did like double seven or eight times and I eventually they started 250k I think and we ended it and I said 30 we needed 30, but but the point was I didn't really need the money.
Any it was a man. Like if I had that the point maybe 600 million in cash in the bank and the competent of microstrategy was is a multi-billion dollar company. So I was like a million is not going to move the needle for me $100,000 going to move the needle for me 5 million 10 million not going to move the needle one way or the other. So there's no point in doing it unless it was something material where you are like, you know the eight people in your office. Were they like your coworkers?
I mean business development the people that wanted the commission on the deal, you know, so like any any most every we want to like do the deal and the only way you get 30 million is to like say no to 22 million, right and like any reasonable most reasonable people. Which the reason you are where you are is your many would probably consider your not reasonable right? I mean you have your extreme personality type and that's why you're very successful but
Any reasonable person would say what do you need? Idiot like you paid nothing for this take it where you but were you always that like, my mom always wanted is that in? The English language is going to be important to the human race for a thousand years and a thousand years from now voice will probably still have value just like a lot of like hope it's a valuable word forever. I mean until you murder everyone that speaks the English language if you think about how
Valuable it is my real view is is I think people are crazy for spending hundreds of millions of dollars on ad campaigns to Market a brand. That's a misspelling of a normal word is like I got to convince you how to sell in gentian like to wise and a z, you know, I'm like, why would you do that? Because in the modern era are spell Checkers when you try to type these crappy brands that
Are misspelled you know, your iPhone on spells it for you or properly spells it. So try going to a website. That's a misspelling of a name most brands and most brand Consultants. I just disagree with them all they they charge you a lot of money to come up with a misspelling of a common word. And then you spend half a billion dollars marketing the brand a much better idea would be by the word. Hope or angel or alarm or alert or
Voice even if you got to pay a hundred million or 200 million or five hundred million dollars because if I see your your ad and you tell me that you know, your brand is alert.com. I can remember it in one second. I can spell it and one second you leap immediately to the top of the Google search engine. So I just I always view domains as being undervalued and then Mark people spend hundreds of millions of dollars of going crappy marketing to send someone.
One to a place they can't spell that they can't remember. I think the world will gradually come around to that point of view, but they're not there yet, but that so that was my view. Like I didn't want to sell it to tell you the truth. Like if you owned the word angel or the word alarm or the word. Hope or voice like the truth is Google should have paid a billion dollars for the word voice. I mean if they're going to try to launch a voice service it's worth it to them and
Surely you know what you're going to see is Apple Amazon Facebook Google or just going to keep generating more money, but the word Voice or the word hope or you know fill in the blank any kind of positive positive easy to spell short word in the English language is going to be an awesome place to build a brand.
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You can currently trying to reach me. I own that's a strategy wisdom.com. Alarm.com Angel.com a a alert courage Mike.com Voice.com Usher.com. Hope speaker.com Michael Mike saylor.org. So you own a bunch of them. Yeah. It's and so my view is like like trying to sell that. I got 20 Picasso's and I wanted the world of Market to Value Picasso's. So I saw the first one for 30 million, but the next one I want a hundred million for
Or I or I really want you know someone to create a billion-dollar business with me on that right? That's the right way to think of it. And I mean I look at it this way how many people have learned that have learned to speak English on Earth? What does that number two billion? Maybe? Yep.
How many how many
years of your life do you learn? Do you spend learning English?
I mean typical person spends takes English 10 years like from kindergarten through 12, maybe 12 years, but let's say that we shortened it to billion people spend four years of their life and that's eight billion years of time spent figuring out how to spell and type your brand. What's the if you value the eight billion years at $20 an hour.
That's a hundred and sixty billion dollars worth of money spent teaching people that hope is a good thing.
Right. What's it worth? Like what's it worth like to have a brand which is universally understood and easy to spell that burned in the head of billions of people, you know, you couldn't have you're going to go and buy advertising to convince them that ho o PE is a good thing Hopi or something like not really so I think that I'm they're just good Investments. They're
Real estate in cyberspace and they'll always be good and the world under value Zone but in tight like when I tell you alarm.com you can remember alarm you can go type alarm when you get off this podcast anybody that wants to go check out what alarm.com does they don't have to go and like look it up and sort through a hundred ninety seven thousand Google search pages to figure out which one is the one that's sailor was talking about. Yep, my friend
started.
Calm calm.com the meditation app and the first thing you did was get the domain basically and decided early on. Alright, I'm going to build a brand around the feeling of being calm and it took the form of a meditation at but he sort of decided upfront what it was going to be and had got that domain and really like had to negotiate to get it and it was you know, these domain negotiations
go prolong, but definitely another
success story of that that
pain I'll remember it too. By the way, like like what you just said you just pitched me on
Idea, I'll get off and if so off this podcast and in four weeks from now, someone asked you. So what was that meditation business thing. I'll be like see a Al m.com. Hopefully they got the right spelling of it,
right? Yeah. Now there's three else now. I'm just joking. It's the it's the right one.
All right, so let's talk about let's talk about something else. So
you you you've been in the game for a while. I think you might be
How long you been you've been like the CEO of Microsoft for 30 years almost
since 1989. So 31 years. I've been the public company CEO since 1998. I
think samuelosborne last 1989
public. Um, yeah, you've been to you've been a publicly traded company or a public CEO longer than I've been
alive. And so and you've kind of had some ups and downs. So I saw an interview of you on Charlie Rose, you know, you were
Looking like Tom Cruise you go on Charlie Rose and they're flying high your a 34 year old guy who took the company public. I think microstrategy was worth 11 billion dollars or something at that point and best of all, I think you own half of it or maybe a little bit more than half of the company. And so you're you know, a 34 year old billionaire and I think you know few years later the stock price crashed pretty dramatically, but you I think there's two kind of remarkable things a I want to hear. What was it like to be in that position and then face that crash and then be how
The hell did you keep your job was it because you own the controlling stake of the company? Because most CEOs cannot survive a
stock price Crash from 300
something dollars a share to under 50 cents a share. How did that happen? You
know, I think if you're in business long enough, you're going to have setbacks and you know, you can't let the setbacks crush your spirit or or cause you to stop thinking and stop innovating and stop growing. So, I mean they're humbling well,
We all kind of know that's the right answer. But like we're sorry.
We all kind of know that's the right answer like hey setbacks happen. You gotta pick yourself up and that's true and everybody sort of agrees. But when it does happen What do I do? You remember what that felt? Like what the day was when when when you're experiencing this crash. What were you thinking as it was happening? It's not
pleasant.
It's not pleasant, but you know, you have to move on right? Yeah, you have to focus your responsibility. Okay, and your you were talking about at one point you're like, all right, when I was selling this domain. When did you sell that domain name? How many years ago?
Two years ago, maybe. Okay, so not that long ago actually but you're saying like well, we had six hundred million dollars in cash with the company was doing great. Why continue staying as the CEO when it seems like you're incredibly I mean Bitcoin seems like you're one of your main top two focuses next to microstrategy. Why not just focus entirely on that as opposed to continuing continuing to run this business.
Well, first of all, the the business has two strategies and the first strategy is we sell business intelligence software to our customers and the second strategy is we acquire and hold Bitcoin. That is the business got it. And and and if you look at what we've done we
We bought 250 million dollars worth of bitcoin that we had generated as a publicly traded company. So without the business we couldn't have bought the first 250 million of Bitcoin and that required, you know, an intricate set of due diligence and disclosures then we did a Dutch tender offer. But basically it's an equity offering of sorts of you could think of it that way but we did we did.
I'll reverse Dutch auction and with the results at the end of that point, we bought another hundred seventy-five Million worth of bitcoin. And so that's another thing you have to have to be a public company to do then we swept our cash flows as a public company into Bitcoin. We bought 50 million more Bitcoin.
And without the company could have done
it. Then we did convertible debt offering for 650 million dollars of debt at
Basis points and without being a public company, we couldn't have done that one either we bought Bitcoin and then it went up again. And then we did we bought some more with cash flow and then we did a billion dollar debt offering and we did that billion dollar convert offering at 0% interest. You couldn't have done that without being a public company. So there are benefits to being a public company public companies are credible. They're really the gold standard as a counterparty. Right? I mean there's
Hundred million companies in the world. There's only about 4,000 publicly traded companies on u.s. Listed exchanges. So it's a very very rare thing you have to go through a huge amount of compliance. You know, we're falling 10-qs 10K as we've got a lot of a lot of compliance architecture security architecture. I'm signing sarbanes-oxley statements, you know every
Are right we are responsible for fcpa, you know Etc responsibility. So that gives that gives investors comfort with a publicly traded company. So probably the most important thing to take away from the podcast is Bitcoin is an exploding asset class. It's really a it's the greatest Treasury.
Curve asset of our lifetimes and it's the solution to every company's treasury problem. So if you have a corporation that has capital or generates cash flow, you can immediately double or improve the value of the company or dramatically enhance the value of the company simply by changing your treasury policy. So
if you take a company with
what cash and you invest in Bitcoin you have invest you have converted.
Liability to an asset and so so I was enhancing the value of the company by pursuing the Bitcoin strategy.
They go together their synergistic.
So let's let's lay out the the kind of the context for people who don't know exactly how it all played out because I would say in our audience right? We're going to get about 300 400 thousand listeners this month. And in that audience probably, you know, 5% are as crazy about Bitcoin as me and have put like, you know, you know a huge chunk of their net worth into Bitcoin and then, you know, 50% are curious and 50% are novices. Let's say, you know, it's roughly rounding things out and so just to put into
Microstrategy is this couple billion dollar public company? It's been around for a while has a good track record has a business selling enterprise software. You generate a ton of cash your business spits off cash. You have about 500 600 million. I'm just using fuzzy numbers doesn't doesn't the specifics don't matter use about five hundred sixteen billion dollars of cash. That's your treasury for your company and you're looking for something to do with it. And at some point you realize you have this treasury problem and and you're not alone actually all companies have the treasury problem whether they are aware of it or not.
Not so can you describe the treasury problem that you experienced and you experience that a 500 million dollar level but anybody including an individual with $500,000 or without a hundred thousand dollars in the bank has the same fundamental problem. So explain the treasury problem as you saw it a few years ago. Yeah,
there's the treasury problem. Is that subsequent to March twenty 20 the cost of capital exploded from 8 percent to 25 percent and you can see that in the performance of the S&P 500.
X which went from about eight percent a year for a decade to more than 25 percent and that next year. That means that anybody investing money on behalf of a limited partner or any other investor has to generate that cost of capital in order to avoid destroying wealth. If you invest if you generated less than eight percent yield for the decade from 2010 to 2020 as a financial advisor. You destroyed wealth.
Because the alternative was just to buy the SP y index if you generated less than 25% from March of 2020 onward you destroyed wealth because you could have made 25 percent actually a bit more depending on what day of the week you measure it or what day of the year you measure it you could have generated that much just by owning the index now the proud the treasury problem is that when the cost of capital is zero.
If by the cost of capital is being driven by the expansion of the money supply the Federal Reserve is in expanding the M2 money supply by about five to six percent a year for that decade. And when you tackle in the risk premium, you get to your 8% SP return when the when the Federal Reserve expands the M2 money supply by 20 to 25% That's where you get that explosion in the cost of capital.
The inflation doesn't show up in consumer goods the inflation immediately shows up in assets. We have asset inflation within minutes of when the Central Bank decides to stimulate the economy the price of all the assets explodes. And so the problem for every company all 100 million companies in the world every private company every public company. The problem is you have capital in your Treasury.
And that Capital has to yield the cost of capital and if it doesn't you're destroying shareholder value another way to say it is if you generate cash and you put it into the bank account to pay zero interest and if if the cost of everything you want to buy goes up by 10% a year in seven years, you only be able to buy half as much you've lost half of the value of your savings when that discount rate or that cost of capital doubles. Well then in that
Three and a half years. You've lost half your money at a 25% cost to Capital and three years. You've lost half your wealth. So the treasury problem is the cost of capital has exploded and the cost of capital as it goes through the roof puts every company in a quandary. They either have to decomp the lies and give all of their assets back to their shareholders because they can't if Sam is controlling and
Aspen company that invests in dollars and you are running an investment company that invests in the S&P 500 Index and I gave each of you a million and Sam proudly tells me how he didn't lose my money and you tell me you made 25% return. I'm pulling all my money out of Sam's fund and I'm putting it into your fund. So ultimately the problem is the company sitting on Capital if it can't meet the cost of capital. It has to give the money back to the shareholders or
Least it's under extreme political pressure from the show. Everybody's beating you up as CEO saying what are you doing with all that cash. You should just pay a dividend or you should buy the stock back and and the second pressure you have is if you run a company and your cash flows are growing at 8% a year, but the cost of capital is 25% a year. That means that I'm discounting you at a rate that's higher than your growth rate in essence the
Your stock is going to be forecast to go to zero. You can't hold value in a company growing it 5% a year when the cost of compost 25% a year. That's why the only thing I you can buy is going to be a high tech stock that's growing. You need to buy a tech Monopoly that can grow 20 or 25% a year. And if you come to me with a business idea for a company, which makes a lot of cash or is makes a lot of money but is growing too.
Percent a year or one percent a year. I'm just not interested in a high cost of capital environment. So the problem we faced in marches. What do we do give all the money back to the shareholders or can we find something to invest in that that's going to actually generate more than 25 percent return and that puts us to a question. So what we did in essence was split the difference, you know if if I was in a situation.
Inch and the ideal situation you would just buy 500 million worth of bitcoin and put out a press release and do it. But if you did that that would be such a shock to the outside shareholders that the fear would be. Well is someone going to sue us or dump the stock because you were so aggressive because they'll claim that you took a risk that you didn't disclose.
So our response is let's disclose everybody. We're about to take a risk. And after that let's go ahead and take a risk, but at the same time let's give everybody an insurance policy. So we we offer to buy back 250 million dollars worth of the stock in this Dutch auction. So if you disagree with the decision to buy Bitcoin, you can sell the stock back at a at a profit. Our stock was 120. We offered to buy the stock back it up to 140. And so we questioned the blow.
Of the investment strategy by giving people an exit strategy from the equity that rotates the shareholder base and then we began to pursue the Bitcoin strategy as a primary treasury Reserve asset with with a different shareholder base.
So let me ask you a question. Now you I like the analogy or the kind of awareness that hey we have this giant bowl of ice cream. That's melting. That's that's your cash pile that's melting and the heat is basically
the the money printer that is causing asset
inflation Cube. That's melting ice cream of 500 million dollar Ice Cube and its melting 20% a year and so be gone in
five. So you needed to do something with that. You didn't want it all melt away. So you decide to do this now a couple quick questions one is sort of rapid-fire. I've a couple rapid-fire questions for you in 20 years from now. What do you think has generated more value or more income to the company to?
Energy, is it the operating income of microstrategy or the investment income of the Bitcoin at holds
the investment income for sure. Okay, and then, you know to me to be very clear what happened in March of 2020 is when the cost of capital goes to 25 percent. That means that every investor and all investment income every every investor generated 25% more doing nothing and every Main Street company that worked 25% harder got nothing.
Right, right, you literally tilt the playing field so that if you don't own if you own an assets, you're having the best year of a 30 years and if you don't own assets, it's impossible to have a good year. And
and so so the second question is as you acquire more and more Bitcoin is microstrategy BET. Like do you just position the company this point like it's a Bitcoin ETF. It's like by this by this Bitcoin buying and holding company,
not a Bitcoin ETF.
You're sloppy with those words and ETF is of a company than invest in Securities and it tries to keep its assets under management equal to the amount of shares of ETF that it's old. It's a financial company and ETP is a similar type of company that invest in Commodities. If you create if you create this Bitcoin entity that that equalizes assets under management equal to the shares you sell you created a Bitcoin ETP.
We're neither of those things. We're not a finance company. We're not an ETF or not. Any TP. We're not equal. We're not buying or selling Bitcoin to equalize assets under management. We're an operating company that owns property Bitcoin is property. And in that way, you should think of it as a company like II bought a million acres of land in Texas or I bought a million gallons of fill in the blank a million bushels of soybean.
You can buy any kind of property right and and you're holding it on your balance sheet as a company, right? That's what we that's what we are. Now. What's your
question you are talking about like let's say the the cost of capital being 25% right? Because since March that's what the sp500 on but the stock market goes, you know, it does go up and down in years where you know, the market dips and goes up, you know the average. Oh, you know over time the geometric mean is whatever.
One or eight percent something like that. So some would argue. Okay. Yes this year assets inflated by that much. That doesn't mean next year. It's going to remain at 25% a year. And so you have to make some prediction right? And so are you are you basically forecasting it at 25 percent 15 percent 10% 8% and does the decision change at a certain number there?
So so Jen first of all for the decade from 2010 to 2020 it was generally about 8% like it was
Is pretty consistent and the single biggest driver of cost account, but all is the rate at which the broad money supply expands.
And if you look at if you go Google M2 money supply fed, you'll get a chart and you'll see the church by the charts not all over the place. The chart is very consistent seven percent slope for a decade. It's not jerking around. So it's not that volatile. It was very consistent monetary policy for a decade. Then that chart goes like this straight up 24%
So if you if you're going to make a decision as an investor and this is any investor what this this has to do this applies to all four hundred trillion dollars worth of investors and applies to every company on Earth. They all have the same exact thing they have to calculate which is you have to estimate the rate at which the money supply will expand each year for the next eight years. And so that's the scent if you want to figure out the signal or the
The single most important thing in the world for everyone, but for everyone seven point eight billion people for a hundred million companies for everyone with money on Earth or everyone that earns a salary on Earth. This is the big idea of the podcast you have to estimate the rate at which the currency is going to expand and if you believe the currency is going to continue to expand at 15% a year for the next eight years you
To one
conclusion if you plug in 10 percent, it's a different conclusion. If it's 25% is a
different conclusion.
So what do I think I think that 15 percent is 15 percent for the next eight years is reasonable. If you're a pessimist, you could say 20, if you're an optimist, you could say 10, but the money supply is expanding because
the Federal Reserve and the EU Central Bank or buying a trillion dollars worth of bonds every year each and it's also expanding because the government of the EU and the US are running a multi-trillion dollar deficit and it is also expanding because of trillion-dollar-plus stimulus and there's no reason to think that's going to change in the next four years and I don't think in the next eight years. I think I think that the
The Democrats took control of the Senate and the house you saw that you have if you could have you could have forecasted twelve percent inflation if it was a it was a split government, but I think that in a non splint government there seems to be remarkable consensus that we should run deficits continue to keep interest rates low and continue to stimulate the economy. So, what does that mean if
You plug in a number 15 percent. It means that the risk-free interest rate or the risk free return is 15% It means you have to generate an excess of 15 percent on your money every year for the next four years. In order to stay ahead of the rate of asset inflation. A reasonable person would say the assets are going to inflate at that rate. That's that's pretty much what they do. That means that if your company is not growing its cash flows, you know at a
Percent rate then it's not going to hold value as a stock. It means that if your bond is paying you an interest rate of less than 15% you're destroying value in the bond. If your rent yield is less than 15% Your commercial real estate is destroying value. And if you're holding cash, you're losing 15 percent of it a year. That's that's the negative real yield. So once you actually embrace the idea of asset inflation and asset inflation equals cost to consult equals.
The rate of the money supply expansion. Once you have that rate, then you realize that there's a negative real the real yield on everything except for Bitcoin for the most part. The negative real yield on gold is 3% That's the rate at which we mine it or hypothecated. The negative real yield on sovereign debt is about 12% 13% The negative real yield on corporate debt is 10%
Every company that's got a growth rate of less than 15% is got a negative real yield on it. So, you know once you do that then you then what you realize is.
You can't really have a business strategy as a company unless you find a way to solve the treasury problem. So the big idea here is you want to fix any company sweep all the cash flows into Bitcoin convert the treasury into Bitcoin borrow against your future cash flows and dollars convert that into Bitcoin Finance all your fixed Assets in dollars convert that into Bitcoin.
An issue Equity as much as you can now at the highest valuation you can now in dollars and invest in Bitcoin, right? And and you might say why Bitcoin well because Bitcoin is the Apex property, it's the most scarce monetary asset in the universe. You can't make any more of it. It's encrypted money and and what that means is it's least likely to be impaired by a property tax and execution issue.
shoo
Money printing dilution counterparty risk and Corruption. So we have we have engineered a superior asset a thermodynamically sound technically Superior asset. It's placed on a global digital monitoring Network, which is open an open protocol and the combination of the the the Apex asset on the open monetary system makes
sit the most disruptive technology in the world when you you what you have now is like in terms of like Maslow's hierarchy of needs. You've got your you've got like the the top problem to have which is your company has made all this money. What do we do at what point in the in the history of the company and you personally was I mean when I even when we sold our company it was like I just had to focus on payroll which
Means I had to focus on creating a product that people think is great and that solves problems and then I got to make sure I can sell that problem and get people to buy it. What at what point in the career did it switch to your current Focus from just I got to make I got to make sure that microstrategy has badass product that gets in the hands of customers profitably.
I'm trying to understand that question. Can you just say it a different feeling like when you were first starting microstrategy you were you were in the weeds you were thinking I have to make a product that solves a problem and I have to make money off of it right now. You've gone way up the hierarchy of now we can do whatever we want. Now you could do ever you want at what point? Did you notice a shift like, oh my gosh, like this business is stable. It's working. It's working pretty well.
Quite predictable at what point did that shift happen? Because what you're talking about now is quite well foreign to what I think we look we solved our problem when we actually embrace Bitcoin my eye I could say to you. Oh, yeah. Well not when I had 500 million in cash in the bank I could and we were focused. But the problem with that is that if you have a bunch of cash generating zero interest the cost of capital goes 25% then all the
public company investors forsake the company and if the stock if the stock market forsakes the company the mainstream media for steaks the company right then the employees become dejected because eventually you're going to have Facebook Amazon Apple or Google steal every one of your employees. If you can't drive the stock up right now, nobody wants to invest in a company that makes a lot of money growing at 5% a year. I mean it seems
All the say that it but it wouldn't be true. If the cost Capital was Zero if we had a sound money policy in this country, then you could hold your head up high and say I run this great restaurant and we made a lot of money last year. We're going to make a lot of money this year and our plan is to keep doing what we've been doing and I would have cut you on the back and say that's good that's honorable. But if if I tell you I'm going to devalue the cash by 25% a year.
Ear or 20% a year at some point you're driven into this cycle where I have to either do a big acquisition to keep my revenue is growing. I have to take extreme risk and do dilute of Acquisitions or have to go borrow billions of dollars to buy the stock back to leverage up the cash flow per share. And if I don't do either of those things the investors dumped the stock and they dumped the stock the employee started feeling like, you know, why don't they go work some place cool and hot
And you're going to get all your engineer Stripped Away by Facebook or or Amazon or something. So the truth is when we actually fix the balance sheet. We fix the stock and we fix that, you know at this point the company has five billion dollars more than five billion dollars in assets. If the cost of capital remains it let's say it goes up 20 percent if we print 20 percent more money next year I couldn't resist
And we expect to generate a billion dollars investment income which would be a you know, 20% increase in Bitcoin. Right? But the truth is I can reasonably expect better than that. If the cost of capital is 10. I can reasonably expect 500 million investment income. Well all 2,000 people doing a hundred thousand things right perfectly for the entire year competing against Microsoft that has more money than God. They can generate 75 million a year.
Okay, so so the truth is the company its future became secure when we actually converted the balance sheet to bitcoin because now we don't have to struggle. Let me say it a different way. I don't think any company can be successful without a financial strategy in the year 2021. Like I wouldn't have said it three four years ago if you have a sound money macroeconomic
Environment where the money supply is expanding a two or three percent a year you can go out and make things and create things in Market things and sell things and service things and generate cash with that and then and that makes sense. But if the money supply is expanding at 20% a year you need to own assets because because what's happening is no one's going to invest in any project that doesn't generate more than the 20% her.
Great. And so what who can generate consistently risk-free 20 percent returns. You have to be a monopoly. Yeah, you have to have a digital Monopoly or some kind of Monopoly so it becomes exponentially harder to grow and what and so what happens next all these other companies could squeeze that of the ecosystem right there get they get D capitalized and rendered insolvent by by the monetary policy. So I would say
A that you know, if I can get my my stock was a hundred and twenty dollars a share. What is it right now? Like I haven't checked in the market but in 68, okay. So if I get my stock up then I can actually make my shareholders happy. I can change the narrative I can recruit I can retain talent I can get that. You know, I can Inspire the confidence.
Some of my customers I can I can drive momentum and then we can do what we want to do. I guess it's similar to if you're a university and you had no endowment, you know and say or university there's a billion dollar endowment or university as a hundred billion dollar endowment, you know, if you are a professor which university you want to work for if you're a student. Where do you want to go? You know, do you have a shining building coming or not right at the end of the day?
Right money is a measure of energy. And so if you have monetary assets you have energy and view of high energy. You can pursue your vision, you know with integrity and what percentage of your time now, are you spending on this on investing the income versus on the day-to-day of microstrategy of just the business as usual making the products that making business intelligence products versus investing the the income
I am a I'm the CEO but we have a president and the president of the company has finally and he actually has day-to-day operational responsibility for sales marketing and even technology development at this point. So I'm the chairman and the CEO. I oversee the company strategy and I oversee the I oversee Financial strategies. I oversee long-term Direction and I and I oversee technology strategy, but I'm not I'm not in the weeds.
In the day-to-day running the business that's really left for the operating executive team. So
about a year ago. I tweeted out that I had moved 25 percent of my net worth into Bitcoin, which is now become like I don't know 50 plus percent almost and a friend called me our friend who comes on this podcast name's Andrew Wilkinson, very successful business guy. He's got a public company and and Canada now sort of has owned businesses that are worth.
Over billions of the over billion dollars and he called me and he was like, Hey, I want to make sure you know what you're doing here and you know, like a concerned friend and he comes from like kind of the Warren Buffett, you know, he's at Warren Buffett disciple and famously Buffett and Munger, you know, Charlie Munger called Bitcoin rat poison, and then Buffett called it rat poison squared and so you get really intelligent people who are well respected for what they've done talking about Bitcoin. So first, what's your reaction to the
The Buffett opinion on bitcoin
I think everybody's captured by their frame of reference Warren Buffett. Would you agree that Warren Buffett for the most part made money investing in stocks?
Yeah, and non technology
stocks primarily and and maybe and maybe overseeing operating companies how successful what he had been if he did that in Nigeria or let's say Zimbabwe or Argentina for the past 15 years or Venezuela not very well strategy wouldn't have worked right? For example. There is no strategy that would work. If you are a business person in Zimbabwe when the currency collapse and if you look at the Argent, I'm blue da
Our the Argentine dollar the Argentine peso actually used to be worth a dollar and then was worth and then it was 3 pesos to the dollar today. It's on the black market they call it. The blue Market is worth about a hundred and fifty pesos to the dollar. There's you know, if you live in a world where you just let's just start by assuming the currency is strong and we have no problem with that and that stocks are going to work and then let's talk about our investment strategy. Well.
If you if you live in that world and you can make those assumptions great, but what if the currency weakens at 15% a year for the next decade then then your strategy doesn't work. So I think that for the most part the world's full of successful people but there's two things that are missing one. They're they're assuming optimistically that that in the United States and Western
Europe whatever currency challenges we have whatever weakness of the currency. We have will be rapidly rectified. They're either in denial. Like here's how you'll know ask someone as an investor how they did last year. If they're honest. They'll say oh all my you know, the dollar crashed and all my stocks are up 20 to 50% because the dollars weaker
and if they tell you, oh, I had a great year all my portfolio is up 37 percent or 50 percent because I'm a genius stock picker, right? That's how you interpret. The world is the dollar weakening or is the market getting better. Right? And so there's a lot of people that that have been successful in their frame of reference. And so they just attribute The Virtuous activity of you know, their virtuous stock picking or their virtue
Business strategy for their success, right and then they wonder why everybody else can't be like them, right? And then I think the second part of this is Bitcoin is Paradigm Shift. It's the first time in the history of the human race that we managed to put first layer money on a digital Network. I mean there is no there is nothing to study someone that's telling you they've studied this. How could you have studied it? It's like we invented fire or we invented.
TriCity it's such a new invention that if if your friends said
I spent 47 hours studying Bitcoin, right and I have the following, you know detail concerns about how it's going to evolve as a dominant digital asset Network and these are the things I'm worried about maybe what the constructive conversation but I think that most people don't they don't even understand yet that it's a digital monetary Network. They don't even know there's a class of such.
Nothing. It's the first such thing in the history of the rate of the human race. So so I've created the ability to manifest property in cyberspace using strong encryption and I have decentralized that Network such that no company or no CEO or no country can be a point of failure, right? This is this is a first in the human race that you know, this is a fire in cyberspace.
It's burning with a trillion dollars of energy. It's the fastest growth to a trillion dollars of any digital Network in the history of the world 12 years. And so if you Embrace that and you say okay, I've got two things going on here. I have a macro. I've this is the first time in 30 years that the money supply the broad money supply in the US and Europe is all linked and all call and I'll collapse
lapsing at a rate north of 20% We didn't have this not in your lifetime. Not in my lifetime. The last time we got something similar. This is 1980 but and before night in the 70s, but in the 70s you had a bunch of different central banks the German Bank the French Bank the US Bank the US was not the world current. It was like 30% of the currency trades in the 1980s. It wasn't 90% So we had the formation of the EU.
the EU tied all of European currency to the dollar
that became 90% of all the currency every other Central Bank tighten the dollar so we arrived in a period in the last 12 months where where the behavior of the US fed and the expansion of the M2 money. Supply is an Essence weakening every currency on Earth at the same time. You've only got three sets of currencies. You've got the strong currencies weakening at the same rate as the dollar.
You've and that's like 20 rich countries. Then you've got you've got most currencies weakening 20 to 40% more against the dollar and then you've got the last basket of currencies weakening 80% or more against the dollar. They're utterly collapsing and so you have a macro economic circumstance. We've never seen in our lifetime.
And then you have a technology the most disruptive technology of our life more disruptive than Google than Facebook more disruptive than YouTube more disruptive than the zoom more disruptive than than the iPhone it took Google 22 years to get to a trillion it took Amazon 24 years to get to a trillion it took Apple 42 years to get to a trillion it took Microsoft 44 years to get to a trillion it took Bitcoin 12.
It's a it's a monetary fire. It's burning in cyberspace and these two things together, you know about how do you feed a monetary fire with money how to make more money than ever. The money is feeding the fire, right? And anybody living in a comfortable environment with a business strategy that worked last year right there.
We're going to be late to understand this because they haven't had this jarring realization that there's something fundamentally different. But if you lived in Argentina, are you lived in Lebanon and your currency like the steak Lebanon it collapses overnight by 80% and if someone handed you an iPhone and said you can put Bitcoin on this and you won't be broke and starving tomorrow. You would have an incentive to learn about this new.
Technology because your entire world crashed around your head, but if you're living in a world where you think you just made thirty percent return on your portfolio. You don't quite have the same appreciation of the problem.
Go ahead Sam. So you you it almost is it's almost like rooted and the decision to do all of this is definitely shareholder stuff shareholder value, but a lot of it was like weird. It was like, well, I just want to attract great talent. Our that was definitely a factor how has how many people work there now mm what mm how has this impacted your ability to recruit and retain people. It's a great for retention as been great.
Recruiting we can get we get people first of all the company's brand has been amped up by a factor of a thousand. I mean a lot more people know us now and what's the culture like know the different just more just happy Bitcoin is Hope. Okay. So let me say it a different way if your family has $100,000 and you showed up, you know today and I told you it was in a bank in Lebanon.
And now it's 20,000 but you can't spend it and it's going to 0 what's your family's more round? Right? Well, I mean death and if you if your family at a hundred thousand in Bitcoin at the same in the same year and I told you oh by the way Bitcoins up by a thousand percent and now you have a million dollars and it's probably going to keep going up forever and you don't have to worry about black and white like that. It's not like I'm looking at your glass door reviews. I'm looking at the glass door because not everyone agrees like that.
Really there's downside to this. I mean not everyone agrees. I'm looking at I see a lot of bad reviews and every great company has a lot of bad reviews, but it's not black and white that everyone agrees. I mean you have a 43% review glass door. I know that glass door isn't the full picture but it's clear that not everyone agrees with your opinion. And I want to know is that is that only stats for the past six months because I know you know, there's a there's a thousand reviews and it's been isn't it for the past decade, but I can sort by.
I date so I can I
can tell you a number by any
you could just I could set it by
any
constraint right now. It's also 1000 reviews within its and it's a low review and I want it so it doesn't seem that everyone agrees with you looking at the past 10 years and if you go back over the past 10 years we had we had one point where the company was Contracting and we laid off employees. And so so do I'm looking at reviews off from 2020.
Truth truth be told no, nobody gives a shit about Glassdoor reviews, right? Like, you know, that's you know, I think it really does. I think that there's I think there's two no no
matter how thin the pancake there's always two sides but there's bits of Truth and all of it right you could you could gain strength. What is do you what is the point you would like to make and what shall we discuss? What I want to know is is what's been the downside of this because it's not black and white that everyone agrees with you. It's not black and white that
this has been
perfect Sam can ask your question in a slightly different way that I think I get what you're trying to say. So it's not necessarily. Oh have people disagreed with you because right now also you look like a genius you bought the thing the brand is up. The stock is up the Bitcoin prices up like if you really disagree now, that's just your own personal problem at this point. The strategies clearly worked up till now the question is more that hey we've had periods of time. I've been holding Bitcoin since 2013 2014 and I've seen Bitcoin go down, you know, 70 80 percent draw downs and you have
Basically taking out a bunch of debt you bought Bitcoin your own five billion dollars a Bitcoin. The majority of the company's value is the Bitcoin that the assets that it owns and if we do see I think we kind of agree volatility will dampen over time, but that doesn't mean we can't see a drawdown like that again what happens when bitcoin price drops by 50% again, what's your reaction to that? How you know, how does that affect your strategy or what's your overall view point of this possibility? That's not that
that's not a downside of his strategy,
right? Yeah. Yeah. Yeah on a day-to-day level at the company I'd sound I imagine there's a ton of people that love this but what's is what has been any of the downsides of this because with every great decision there's always going to be downsides as well as upsides. I can't see any downside for the employees. They have all benefited. I can't see any downside for the investors that stayed with us. They have all benefited, right? I mean
There are critics out there that don't like Bitcoin and by there are people that will say your CEO you shouldn't invest it. You know, there are there are people that will say operating companies shouldn't have assets right? There's a credit like there's criticism people say, well, you're CEO. You should go back to your cubicle and write software and leave the investing to the professionals.
But I think that the fundamental elephant in the room here is that the macroeconomic environment is so incredibly unfair to people without assets like literally if you're operating company or a Main Street company, you have to work 30% harder to stand still and if you're a Wall Street company, you can stand still and get 30% more like the playing field is so tilted in favor of property owners or asset holders against manufacturers.
And and companies that that do things that you you can't really be successful in business and less you have assets as part of your strategy. And
so okay. So me and Sam were asking different questions Sam wanted to know more about the morale. I want to know if we do see another Bitcoin, you know crash draw but draw down 50% 60% what happens to your position and what happens to your point of
view? Well, we have permanent Capital so it doesn't make a difference.
It's to us right like right now, for example, we have a 3 billion dollar investment gain. So if you cut Bitcoin in half, we would still have an investment gain, right? I mean our basis is 24,000. So if it goes down to less than 24,000 and stays there forever, then it will have not been a good investment I suppose but otherwise, we've got a long-term strategy, which is you buy it and hold it and
And I think that a lot of people live in fear of volatility, but a lot of people live in fear of a lot of things, right if you're if you'll have enough fear, you won't leave your house you won't do anything and so you have to have a bit of courage and conviction. I can give you a thousand reasons why I think it makes sense to invest in Bitcoin. I can't give you any reason why why I should be afraid to do a rational thing. So, you know, it doesn't really
Ali bother me, right? There's this is a rational strategy if I had it to do all over again what I of course, I would write ask all the investors that made billions and billions of dollars, you know over the time frame right? Of course you would do it again
and I think we're going to we're going to have to wrap based on time. So appreciate you coming on. Do you want to leave anybody with a way to find you a place to follow place to take a next step if they you know, like
Her sure, if you're interested in Bitcoin Bitcoin is hope so go to H ope hope.com. We have lots of information in it. If you want to follow me. I'm Michael underscore sailor on Twitter. How
much you think Bitcoin.com is worth Roger ver owns it now, how much would you be paying for
Bitcoin.com? I don't know. I wouldn't speculate I wouldn't speculate
you know, I think for most people a lot of what you're saying I think is going to be over their heads that listen to this to be perfectly honest with you.
I think it but I could distill it down into a very simple a simple way of looking at it for anybody that listen to this and they were intrigued but they didn't know they haven't, you know, sort of gone down the rabbit hole yet, which is very simply if guys like Michael sailor who owned public companies that have a ton of money are worried about what they're going to do because their money is melting and they're looking for, you know, investment-grade, you know sort of the most powerful.
Three asset and he's decided it's Bitcoin and you know square has put some money in PayPal has put money in Tesla's put a billion and a half dollars into into Bitcoin. It's likely that there are more companies out there and it'll take them six months to a year to make this move but they will take a portion of their treasury reserves and they'll move it into Bitcoin. And these are long-term holders. These are not retail day traders that are going to be you know buying and selling the thing like crazy. So the real simple thing is
You can sort of invest into the network. You can buy Bitcoin yourself and you can front run the institutions that are coming. That was very simple. Very simple thesis a very simple takeaway for somebody who's listening to this. If you're a company you better be thinking about what you're going to do the cash. If your individual person you should also be thinking about what you're going to do with your cash and the easy move is that for once you get to front run the institutions and you get to get in before they all get in whereas typically the retail investor is last.
I think that's it. It's a reasonable thing to say, I agree with it. Another big picture way to say it is there's a hundred trillion dollars of Treasury assets that have a negative real yield of minus 10 to minus 15% a year. That means they're destroying 10 trillion dollars a year of value. The solution is convert all of that money into Bitcoin Bitcoins a trillion dollar asset that you know people that understand Bitcoin think it's going to grow to become the 10 trillion dollar asset the
Old is and then it's going to replace negative yielding sovereign debt and then corporate debt and and ultimately it will become the primary treasury Reserve Network and treasury Reserve asset. And so if you have a company if you're an investor, it makes sense to buy it because it's got a brilliant future and it solves a problem that everybody on Earth has and if you're a company it makes sense to plug your treasury into Bitcoin because the road to serfdom is working extremely.
Exponentially harder for currency growing exponentially weaker, right? You're just going to work yourself to death, you know put yourself in the position of working as hard as you can and Venezuela Argentina or Zimbabwe and roll the clock forward a decade and ask yourself the question. What do you wish you did and the answer is protect your assets protect your monetary energy or your treasury by putting it into a scarce asset and a bank in cyberspace where no one can see
You lit debase it or destroy it and and that's the Bitcoin ethos. We're simply trying to we're trying to make it worthwhile to do the other stuff. There's no point in doing a hundred million other things if at the end of The Journey, you've got nothing to show
for it. Yeah, why create all the value if you cannot store it. So here's a better store of
value. Yeah, that's the big idea and that's and that's a business strategy for everybody small/medium.
Large doesn't matter and you know, I'm just
kind of anticipating somebody hears this and they say but we're not Argentina. We're not Venezuela. Do I really need to worry about this? And what's your answer to that?
My answer is the single most important thing for you to have in your life is a forecast for the money supply expansion in your country for the next eight years. So I would say before you invest the next decade of your life doing whatever stop and
The up on macroeconomics and form an opinion about the rate at which your currency is going to lose economic energy. And then you can act accordingly if you think that the currency is going to hold by the currency has never held its lost six percent of its value every year forever. Right? It's always losing six burners value. You just have to decide for the next decade whether or not the cost of capital is going to be 8 12 16 or 20 and once you make that decision
Asian that will inform you with regard to with what what degree of enthusiasm will you pursue a hard asset strategy if you think that the if you think that the currency is going to weaken rapidly, then you would shift you would you would shift and prioritize hard asset strategy and hard asset acquisition aggressively and if you think that the currency is going to not weaken that rapidly
You would prioritize other strategies right? And you know, everybody's got to make that decision for themselves. But when you know when Zimbabwe started to crash normal company's management consulting company started buying Lumber and coal and oil and anything they could buy because at least you'll still have it tomorrow. Whereas the cash the currency the receivables will be worth nothing. So you just have to make that decision we can there's plenty of information in the
World for you to form your own opinion. Once you formed your opinion and then you can act accordingly
cool. Alright, Michael. Thank you for coming.
I'm a gentleman. Yeah, we appreciate this is great. Thank you. Sorry, we just did this interview it. I called Sean immediately embraced had to record it basically
explain explain kind of what recap it and then explain your opinion first, but first an objectively try to recap it
objectively, we had this guy on he's objectively successful financially.
Objectively a wonderful businessman he came on for he said I had a time his objective for this interview was to promote Bitcoin, which that's cool. We could talk about that for a bit that we I'm down with that. I wanted to ask him a little bit more beyond that but we didn't get to it and he talked for a 60 plus minutes all about this topic and I personally pressed them on a few topics and he disagreed with me and my vibe.
This is not all right, we're past the object apart my vibe from this was I don't trust I don't trust his opinion. I think that the lack of self-awareness met there was something going on there
that even if he's right, which he very well could be. Okay, so I'll give you my two cents and then we'll just talk about real quick. So I just was I thought he came on just kind of low energy / maybe like kind of arrogant. I don't know smug a little bit not in a bad way, but I think at the beginning we were clearly
trying to like warm up just talk to him about something and he had zero interest in chatting about anything besides the virtues of Bitcoin. And so that was a little bit. I don't know just personally little off-putting. I guess like I find it more fun when it guest comes on and there's somebody that you leave the podcast being like man. I want to I'd love to hang with that person more. I think that's a great sign for the guests. And I think in this case, you know, I didn't walk away with that feel. I agree with all the things you said objectively he's
Super-smart literally a rocket scientist who built a billion-dollar company by the time, you know, a ten billion dollar company by the time he was 34, you know from 24 to 34 built a ten billion dollar company has been running it for 30 years as a public company CEO went into Bitcoin heavy and has made three billion dollars in Bitcoin. Like the guys is definitely a smart guy and I think ahead of the curve in many ways. I've read his book The Mobile way, which he wrote 2012 basically saying that mobile can like mobiles going to destroy everything and which in 2012
Was a sort of safe prediction but still a good prediction nonetheless. And I don't agree with you that he was just like what do you say like not trustworthy or something. So it explains well and let me just say this is a jerk reaction. So I don't want my opinion certainly
evolving as as it's going and and I've Shawn you've talked about him all the time. So that was my experience for my voters Wikipedia page and I probably watched the top two or three interviews. That's that that's my experience. I don't want to say
Stressing but there was something about it. So in the interview, I questioned them about something silly. Not silly. I don't think it's silly Sean thinks it's silly and that's okay. I understand why someone thinks that I am I said your class to reviews are pretty shitty. Like recently
though. You're actually more reasonable question. You said it's all been. Okay. Great Bitcoins up. This is your stock prices up but like what have been the downsides which I think is a perfectly reasonable question to
ask and he was just like well, there are no downsides and I was like, well that's like objectively.
False because there's there there's some people they could their Anonymous and it's glass doors. So that doesn't hold a ton of weight, but there's a lot of people on your reviews that say that this is crazy and that your products are failing and you're doing this to distract that like what are the downsides and he I think he kind of dodged the question. I couldn't get the truth out of them and because of that I'm like if I can't trust something so obvious or someone can't give me a straight answer on something I feel is so obvious I'm saying like, yeah, look there's a ton of upside.
Which I've discussed but here's some of the downsides then in my head. I'm like, well I can I believe anything you're saying right?
Once you are once you are not reasonable or rational about one thing. I can't fully think you're reasonable and rational about this other thing that you're telling me about. That's kind of what you're saying, huh? How can I only thing is how you do everything
and I also think that anyone who brags about how rational they are are some of the beliefs rational people. I don't watch it. I think it
to keep bragged about it. I think it's like when you ask him,
M you know, this business is bad thing about he's like, well, I just think it's clear because of this this is true. That's a rational thing in my opinion. I don't think he was sad. He never claimed he
never said that correct, but he said like well, this is this is an incredibly rational decision. I don't see downsides and I'm like, well,
we're naturally so not rational. I'll dictate his I'll defeat by the way. I spent most of the podcast basically even though I'm a huge Bitcoin Bowl. I spent most populous podcast bringing up things that a Critic of his strategy and
It a Bitcoin would say just because I wanted to hear his answers but in general like I get what he's saying that look we bought two billion dollars worth of bitcoin. It's gained 3 billion more our stock prices up. I don't know 4X since we made this strategy change and you're asking me like how to my employees feel like they feel great. Our brand just went up a thousand X people know what microstrategy is now, they didn't know what the hell it was before our stock prices up our assets are
we've gained a lot more value in our assets. So what are you talking is? He was basically like there's no downside. That's all upside. So I get that but he didn't, you know give you the inch that I think most most reasonable people would do was just to say that yeah, everything has its trade-offs maybe like he could have said it was really complicated to go through the process of being the first public company to make this huge Bitcoin purchase. And so that was a huge dish, you know, Regulatory and legal, you know, like mess we had
Work through but I'm glad we did or like you know, there's always some people in the company that disagree with the decision and so they you know, they haven't, you know, they are no longer with us or you know, they've had to get on board with something that they didn't see as was the right decision and that's always tough. Whenever you have strong-minded people. You're not all get a hundred percent agree with a radical strategy. He could have said any of those things he didn't but how does it make me personally distrust him I think for you that was a turn-off
II don't want to like I said before the this is all knee-jerk it just happened. I saw I want to be careful my word.
If I said just trust I actually I take that back I do an entire study distrust. But I mean that there's something going on
that. I had this
gut feeling that I can't just believe what you're saying and I want to go and and this should be the case all the time. I want to learn my own
right? I think it's all pretty above board which is a he's basically bet his entire company on Bitcoin. Now, they own five billion dollars a Bitcoin the company's worth seven billion dollars and Bitcoin, you know, so obviously and his objective.
A stated objective to us coming on was to communicate the nature and virtues of Bitcoin to the audience and leave them excited about the opportunities that Bitcoin offers. So he wasn't there was no bait and switch. He said what he wanted to do. He tried to do that and it's clear that he is incentivised for more people companies and individuals to buy Bitcoin because he is maybe the largest holder of Bitcoin in the world. I don't know what I don't know what Satoshi steak is worth now every maybe check that out as does he have more Bitcoin than Satoshi.
Hee hee, I don't think so. But I said I think my son the
podcasts three billion at one
point is 3 billion. This is gain. He owned a own five billion dollars worth. So what is satoshi's were staying with either way? He's one of the top five Bitcoin whales in the world. He clearly wants Bitcoin to go up and wants more people to adopt it to me. That's like you got to have a natural discount of what somebody's saying when it comes to when they're highly highly incentivized for you to invest in that same thing. That doesn't mean
Wrong or he's like doing anything dishonest. It's like you just have to know that hey this guy's clearly he believes it. He has I conviction and he has an incentive to make other people believe it to Abreu. What did you
think? I mean, I think I what are
you just quaking in fear right now? Is that what you really want to say? So let's not let's
not say that I for the most part agree with what you guys said. I mean talking about Michael himself like super intelligent but professorial he liked you.
Doesn't make for great guests and you see this on other podcast as well. Like when Joe Rogan has like some chania renowned like super intelligent like scientists on sometimes they're you know, they're they just want to go on about their field and their studies and so those will make the best
guess. Yeah, which is kind of sad because from my point of view my I guess we both walked away from the podcast feeling a little disheartened or I don't know like whatever we didn't we didn't feel like we had a slam dunk. I think you for a different reason.
And me for me, it was just I didn't think it was highly entertaining for people when I'm kind of bummed about that because I actually think it's a super fucking I think he's a super fucking interesting guy has had a super interesting life and business story. And also what he's doing with Bitcoin, I think it's super interesting so somehow despite there being an underlying like substance. That is super interesting. I don't think it got communicated. I almost wish
I could just do a billy of the week segment. Just explaining everything. I know about Michael sailor doing them all. Yeah this interview. I think that would be way more entertaining than what actually happened when he came on was basically talking about quite technical in economically technical terms that I think for most people they're not going to resonate with this not going to click and doing it in a way that was sort of like it didn't feel like somebody who
I was
trying to break it down and make it more accessible. It was just like this it is what it is and I can sort of explain it in bits and pieces to you if you want and if you don't see it, you're crazy. You know
what one of the best parts of the towards the end shot when you like to the few minutes and kind of explain what we just talked about in high-level. I thought that was like the easiest part to digest the whole thing and more that should have been more of what the podcast was in the fortunately. It wasn't and it wasn't for a lack of research as far as like the interview not being that great like we put you guys put a ton of
Research into those I think sometimes just the guest personality doesn't make for the the best podcast. Well, I think people can listen to it. It's an hour long. I I want to say I appreciate him coming on Michael is a big deal. I definitely appreciate him coming on. Maybe we can have them on another time now that we kind of like no, I'm a little bit more. But
yeah, I'm sure I'm selves, you know, actually it would be kind of interesting cause we're going to leave this in by the way.
Like the whatever our discussion about it. I hope I hope it kind of gets received as what is this is a instant hot take reaction to something that we were really excited about then it happened. We're giving it a quick reaction. I think you know Sam basically didn't see the kind of the Bitcoin bull case as black and white as my
seller put in small. Like let me just say that I when I my opinion of him is totally separate of Bitcoin. I would say I'm a huge novice. I'm not an expert but I felt that he was actually
Actually, he was a poor representation of it because there's something about it that I'm like, oh, I don't know if I could trust this right
because he's representing it you weren't buying what he was selling. I don't know how to put it but nothing no attack on his character. You just didn't walk away from listening to the guy for the hour and you didn't fully by it. Like we do sometimes with certain guests where they start to explain what's going on in their field or their business and we walk away saying shit that guy knows what he's talking about and like I totally agree with the way the world is going and I want to invest in that guys come
You know, that's sometimes the way we feel
he didn't persuade me if that was his goal. I don't think it I don't think goal was not achieved.
Can I give people the like I'm going to can I try a three minute like Billy the week segment on this guy real
quick. This is your pocket. So you do what you want. Yeah, go for it.
Oh, yeah. Are you interested enough? You're just said, okay. So let me just do it dude. Here's here's okay. Michael sailor to me is more than the bill of the way. He might be the Billy of the month. Okay. So here's some cool things about him that I found doing some research for this so
So the guy's a badass he graduates first in his class in High School Valedictorian. He's voted most likely to succeed. He goes to MIT on a like, you know, ROTC, you know scholarship. He goes to the Air Force. He wants to be kind of like a fighter pilot and you know eventually like, you know, he I think for whatever reason he wasn't going to be able to be a fighter pilot. I think some he didn't pass one of the physicals or something like that and so he's like, you know, because I have a very strict requirement for that. So anyways, he decides that 20 he's
He's working at Dupont. I don't have to do this part Sam. He's works at Dupont when he's like right out of college basically and he's doing simulations for Du Pont du pont's trying to make a billion dollar decision. Should we invest in this or not? And if anybody's been in a big company, you know that when an executive trying to make a case for when the executive wants to do something and sort of their pet project. They don't really want the simulation to be this really objective case of pros and cons there kind of just want some data to support what they already want to do so they can go get a billion.
Dollars of funding to go do the thing they want and so he builds a simulation and the simulation basically says don't do it. And it anyways he ends up just like leaving Dupont. He's like, I don't know why the hell I'm at this company. They just they didn't want the results of the simulation. They just wanted me to say what needed to be said so that some executive could go pitch their case. So I'm leaving this place and the executive is based on Hey, where's that kid? Who's doing that model? I need that data and he's like he's like and they're like, he left the company. He quit and so the guys I go hire them back give
He wants and so they go to them and they say hey, we want to hire you back and we'll give you more money. He's like I don't really want to work there. So I don't want more money and then the executives I give him more we give him whatever he wants just give it to him and he's like, well, I kind of want to start my own company. So why don't we do this? You give me a quarter million dollars and I want to hire some of my colleagues from DuPont. I want to hire eight to ten people from there. And I want you to be my first customer. So I want you to give you you know, a few million dollars worth of contracts to do work for you and I'm going to start my company microstrategy, which does the same stimulating thing.
Or companies and you'll be my first customer. So pretty badass negotiation. He goes instead of being an employee. He basically gets Dupont the seed fund his company and become a multi-million dollar
customer for him.
So from there, he's 24 years old. That's microstrategy how it starts? Basically what they do is like what's called business intelligence or executive intelligence. They take all the data you have so like your Victoria Secret you have all this data of purchasing and all your stores all across the country microstrategy goes in and says, hey you're carrying the wrong sizes. You need bigger bras in Chicago than in New York. You're so if you rebalance your inventory, you're going to save all this money and there's data you just sitting on this gold mine of data. You just don't how to analyze it. We can give you intelligence from this data.
So he does that for McDonald's and for Victoria Secret all these different companies by 34. He's a billionaire the company's public. It's worth 11 billion dollars. He owns the majority of the company owns over 50% and he's doing his thing now over time 2003-2004 stock price crashes from 333 dollars a share to 42 cents a share or something like that. And you know, he goes to the whole transition. He's been the CEO of microstrategy for like 30 years. Like literally, I was born in 1988 Sands born in 1989.
He's been the Sea of microstrategy since 1989, you know, like that's pretty pretty wild and more recently like, you know, microstrategy has been flat for like a decade stock price not really going anywhere business is profitable. He's got five hundred million dollars of cash in the bank, but the stock price not growing and he's like
five hundred million dollars. I think personally he said
no, I think in this case it was the corporate treasury we had about 500 million dollars. He owns the majority the company. I think he owns currently. No, I think I think in the podcast he was like I
have
Whatever. He's basically he was incredibly wealthy and the company was great.
He's incredible to and the company's incredibly wealthy and he basically comes to this realization during the covid crash and he's talked about this on other podcast, which is it comes to this realization that wait a minute if the money supply, you know, we hear about government stimulus. We hear government's printing two trillion dollars, six trillion dollars thirteen trillion dollars total. The money supply is increasing which means if you had five hundred million dollars in the bank if you go back
And look it'll still say 500 million dollars, but it won't be able to buy you as much as I did before because there's all this new trillions of new dollars in the in the in the in the money supply and similarly, like people have been wondering during covid. Wait a minute. All the businesses are shut down and people are locked in their homes. Why are all the stock prices like all-time highs was this disconnect between Main Street and Wall Street and what he's pointing out I think rightfully, so is that when you have all this money printing assets inflate
Basically assets like companies inflate. So that's why the stock prices are going up. It's not that you know Zoom or you know a zooms about example, it's not that apple is making all this much more money than they were three months ago. It's that Apple stock is more of a hard asset to own versus own just keeping cash and dollars which is getting printed and diluted essentially by the government. Right? So long story short microstrategy goes out and they basically do this aggressive aggressive aggressive strategy to
to buy a quarter billion dollars of Bitcoin their kind of the first public company to go do such a bold bet and then he keeps buying Bitcoin more and more and more. He's basically bought two billion dollars a Bitcoin. So first he took all the money they have majority of the money they have and they bought Bitcoin with it and and he first announced it and he told his shareholders. Look we're going to buy a bunch of Bitcoin with our cash. If you don't want to hold our shares will buy your shares back from you if you don't like that strategy, so they bought 60 70 million dollars back. They use the rest of the cash to buy.
Point then he starts issuing debt. He goes he raises 500 million dollars because raises a billion dollars of debt from the public markets takes all that money buys Bitcoin with it. And so since then he's basically put into billion dollars. He's gained three billion dollars and he has a total stake of Bitcoin of five billion dollars, which I think makes him makes microstrategy, you know, a top-five owner of Bitcoin in the world, you know, just behind Satoshi and maybe a couple others and since then, you know, famously Ilan tweeted out something about Bitcoin Mike.
Is Taylor responded saying hey from one rocket scientist to another let me show you how we tell me explain to you why we did it and you should too and a few months later Tesla goes and buys, 1.5 billion dollars of Bitcoin. So he's kind of was ahead of the curve on
this stuff
in addition to that some other cool things early on in the doctor. He sort of identified early on that. The internet was going to be a big deal and bought a bunch of domains. So we spent about two million dollars buying domains like alarm.com wisdom.com. Strategy.com Michael.com Mike.com Angel.com courage
You know hope and he owns all these premium domains one word English word domains and he has since you know sold or created businesses under those domains for you know over a hundred billion dollars. So we turned out, you know, one or two million billion or two million dollars, sorry one or two million dollar domain purchases into over a hundred million dollars of value. He also has a thing called saylor.org, which is just like a free education is a free University and he said, you know since 1999 they've had over half a million.
And students in it. So it has done a bunch of cool shit. And I think is like a pirate of the best kind like super smart technologists super smart business guy has just been in the game for so long and is doing pretty radical things. So that's why you know, I think this guy's a baller. Unfortunately. I didn't feel that all that came through on the podcast. But you know, I'm a fan.
Well, I think Michael and his team will reach out and say thank you Sean because I think that you did an awesome job
of you did a better job of
showing showing off him.
Then him which is cool. And I think
I think you're just
you're just better at storytelling. So maybe this maybe maybe people will have a the same opinion efforts interview. The the part that I kind of was like, I don't know how I feel about this. It happens like probably 15 minutes left in the episode. Maybe Abreu or someone will mark it and you guys will be able to hear for yourselves, but I think Sean you're
I'm really good at this and I guess we'll see this episode is going to be weird. It's go I wonder what people are going to say. I guess we'll find
out. Yeah same. All right, cool.
