MFM #161: Why Michael Saylor Believes Bitcoin is Hope

Episode of My First Million with Sam Parr and Shaan Puri.

Transcript

Note: This transcript was auto-generated from YouTube captions. It may contain errors and lacks speaker identification. A full Gemini audio transcript will replace this.

Kind: captions Language: en for everyone 7.8 billion people for 100 million companies for everyone with money on earth and everyone that earns a salary on earth this is the big idea of the podcast you have to yeah i feel like i can rule the world i know i could be what i want to i put my law in it like no days off on the road let’s travel never looking what’s up everybody we got a special guest in the house michael saylor the um 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 um go ahead charlie i was going to ask you something have you heard this nickname that they give that they gave michael sailor the crypto no the community you know sort of give it and take it away you know they are extremely passionate and uh devoted but they are also you know just nuts online like my 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 they nicknamed him the gigachad because he is sort of like probably the most credible established person and company with microstrategy to adopt bitcoin in a major major way and really um is driving the kind of institutional pickup of it so if you’re listening this you’ve never heard of michael saylor the reason to listen to this is pretty interesting guy had a really interesting career but most notably uh most known now for basically using his company microstrategy and buying about two billion dollars worth of bitcoin or they own two billion dollars with a bitcoin bought about i don’t know how much you guys put in half a billion or a billion no um we uh we bought uh 2.2 billion worth of bitcoin we own about five a bit more than five billion depending upon the day wow more than five billion in bitcoin okay all right so you uh you you have a for 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 like i think a model to amsterdam a a galleon that sailed out of amsterdam in the 17th century and it was uh it was made in the 19th century so it’s a very interesting piece are you um are you a car guy i have a bunch of cars but no i’m not a car guy what’s the coolest one you have i i lean toward suvs i have a bunch of suvs i had had a a lexus convertible that i used to love that i drove a lot but i i don’t really drive a lot so you can go so you can give sam a great 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 an amg 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 into cars um and i bought this but 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 car except you can put your dog in the back and it has five seats and 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 currently what i’m driving right now it works for you well i was looking for someone to geek out on it but i guess that you’re you’re i would have i for some reason i pegged you as a car guy but i guess i’m wrong um i’m more into boats and planes than cars what do you what what does that mean if you’re into planes well i like i like aircraft because if an aircraft can go mach 89 or mach 85 you’re allowed to legally fly it that fast is mach 8 like 2 000 miles an hour no market five like uh like 500 knots like or something like that so the point is like airplanes can fly at their full speed and and yachts or boats can go at their full speed over the water but an automobile that could go 160 miles an hour you don’t very often get to do that legally so so i i like vehicles that you can operate at their design point legally and safely well what planes do you have healing as an engineer i have a global express xrs um before we get into bitcoin stuff and because shawn’s been talking about you for like a year now uh because he was following a micro strategy and all that but um you own a 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 all the i mean i own hundreds and hundreds but the ones that are are top level primary domain names about i like words in the english language that everybody understands like i own emma uh frank i own my own name i own michael.com i also own my nickname mike.com uh so like my personal website i’ve got it on michael.com you just type michael.com you see all the stuff about me hope yes sam go go to hope.com see where that takes you go to hope.com yeah well actually bitcoin is hope so if you type hope.com you get everything there is a know about bitcoin i actually repath hope to all of our resources and materials uh speaker i i owned voice.com i sold it for 30 million dollars a couple years ago that’s the largest uh naked domain sale in the history of domain tell the short version of that story the story is kind of crazy i’ve heard it once before but i i would assume sam and most people have not heard the story of sellingvoice.com you bought all these early on in the web you kind of recognized oh these are these are probably going to be valuable to own these names there’s only one you know there’s only one owner of each of these names you own it and you hold it for a really long time like over a decade and uh at some point you decide okay maybe we should see if somebody wants to buy some of these so tell the story of sellingvoice.com real quick well yeah we i i bought all these domains because i thought wouldn’t it be great to own a part of the english language i mean owning hope or owning voice i mean eventually there’ll be a google voice so there’ll be you know some some telco company that’ll want to launch some service and what a great domain on to launch on the on a word like voice.com so we held them a long time and and uh i think at some point we were looking for joint ventures we’re 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 like four or five billion dollar market cap company and 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 100 million dollars and that was actually a speech interactive voice response like surrey or alexa before siri and alexa came along and uh so i had voice and i was holding it and we’re looking for some kind of good uh 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 we’ll give you 150 000. uh and i you know i was like someone came to me said they often fifty thousand i said no so i thought nothing of it because i just i couldn’t see the point a week later they come back and say well they doubled it to 300 000 i said tell them no so a couple days later they go well the broker’s really insistent uh and so they went to six hundred thousand i said no so they said well what should you say i said don’t tell anything tell them 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 um well send them a note or something and just tell them i said it’s like it’s it’s the word voice in the english language right so it’s gonna have to be something you know north of uh i don’t know i don’t think i said seven or eight eight figures but i just said a lot of money um and so it went on and they doubled again to two and a half million and then uh and then uh five million and then around 10 million then i said they said i had like 18 people in my office they’re like or not eight but eight eight people they’re like looking at me like aren’t you are you gonna take the money it’s like a lot of money now i said uh no send them back uh at this point send them back an a note pointing out that this is like the word voice in the english language and it’s and it’s it’s worth a billion dollars to the right company and uh they said well you’re gonna give them a response i said uh okay tom 30 million tell them 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 no’s so i said tom 30 man i don’t want to sell it for 30 million i want to sell it for 100 million or more but i guess i’ll say 30 million so that so at that point they said well you know they offered you i think they upped their their offer to 12 million i said tell them uh no but if you want i’ll take a meeting with them so when it got to 12 million i said i’d 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 um 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 you know i’m going to regret after i sell it anyway i’ll have sellers remorse but i would i would do it just to make the market but if you don’t want to value the 30 i’ll just keep it like uh okay we’ll give you 30. i said okay so 30 you went you got a 30 from 100k so they did like double seven or eight times and i eventually they started 150k i think and we ended it and i said 30 we ended at 30 but but the point was i didn’t really need the money it was a matter like if i had at the point maybe 600 million in cash in the bank and the company the micro strategy was is a multi-billion dollar company so i was like a million is not going to move the needle for me a hundred thousand’s not going to move then needle for me five my ten million is not going to move the needle one way or the other so there’s no point in doing it unless it was something material were you all like you know the eight people in your office were were they like your co-workers or uh i mean business development the people that wanted the commission on the deal you know so like any any most likely they want to like do the deal and and the only way you get 30 million is to like say no to 22 million right and well like any reasonable most reasonable people which the reason you are where you are is your many would probably consider you not reasonable right i mean you have your your extreme personality type and that’s why you’re very successful but any reasonable person would say what are you an idiot like you paid nothing for this take it were you but were you always that like uh my view on it is that 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 are crazy for spending hundreds of millions of dollars on ad campaigns to market a brand that’s a misspelling of a normal word it’s like i got to convince you how to sell ingention with like two y’s and a z you know i’m why would you do that because in the modern era spell checkers when you try to type these crappy brands that are misspelled that you know your iphone unspells 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 you know 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 or voice even if you got to pay a hundred million or 200 million or 500 million dollars because if i see your br 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 in 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 on crappy marketing to send someone 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 eventually you know what you’re going to see is apple amazon facebook google are just going to keep generating more money but the word voice or the word hope or the you know fill in the blank any kind of positive uh positive easy to spell short word in the english language is going to be an awesome place to build a brand and so right now it looks like you own are you owned or or you’re currently trying to reach me i own this strategy wisdom.com alarm.com angel.com a a alert courage mike.com voice.com usher.comhopespeaker.commichaelmikesailer.org so you own a bunch of them yeah and so and so my view is like like trying to sell the i got 20 picassos and i wanted the world of market to value picassos so i sell the first one for 30 million but the next one i want a 100 million for or or i really want you know someone to create a a billion dollar business with me on 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 is that number two billion maybe how many how many years of your life do you learn do you spend learning english i mean a typical person spends it takes english 10 years like from kindergarten through 12 maybe 12 years but let’s say that we shorten it 2 billion people spend 4 years of their life and that’s 8 billion years of time spent figuring out how to spell and type your brand what’s the if you value the 8 billion years at 20 an hour that’s 160 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’s burned into the head of billions of people you know you couldn’t you’re going to go and buy advertising to convince them that h-o-o-p-e is a good thing hopi or like not really so i i think that um they’re just good investments they’re scarce real estate and cyberspace and they’ll always be good and the world undervalues them but in time 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 look it up and sort through 197 000 google search pages to figure out which one is the one that sailor was talking about yep my friend uh started com.com.com the meditation app and uh the first thing he did was get the domain basically and uh he decided early on art i’m gonna build a brand around the feeling of being calm and it took the form of a meditation app but he sort of decided up front what it was gonna be and had got that domain and really like had to negotiate to get it and it was you know these domain negotiations go prolonged but but definitely another uh i don’t know success story of that that pattern and i’ll remember it too by the way like like what you just said you just pitched me on an idea i’ll get off and if so off this podcast and if four weeks from now someone asks you so what was that meditation business thing i’ll be like c a l m dot com right hopefully they got the right spelling of it right yeah no there’s three l’s no i’m just joking it’s the it’s the right one um all right so let’s let’s talk about works let’s talk about something else so you you uh you’ve been in the game for a while i think you might be how long you’ve been this you’ve been like the ceo of microsoft 30 years almost since 1989 so 31 years i’ve been the public company ceo since 1998. i think sam was born in 1980 public company yeah you’ve been you’ve been a publicly traded company or a public ceo longer than i’ve been a lot and so uh and you’ve kind of had some ups and downs so i i saw an interview of you on charlie rose um you know you were looking like tom cruise you go on charlie rose and they’re you’re flying how you’re a 34 year old guy who took the company public i think microstrategy was worth 11 billion or something at that point and uh and best of all i think you owned 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 a few years later the stock price crashed pretty dramatically uh 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 b how the hell did you keep your job was it because you owned a controlling stake in 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 if you’re in business long enough you’re gonna have setbacks and you know you can’t let the setbacks crush your spirit or or or cause you to stop thinking and stop innovating and stop growing so i mean they’re humbling uh well we all kind of know that’s the right answer but like when 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 like 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 you have responsibilities okay and you’re 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 um two years ago maybe okay so not that long ago actually but you were saying like well we had i had 600 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 um and and if you look at what we’ve done we um we bought uh 250 million dollars worth of 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 of um due diligence and disclosures then we did a dutch tender offer but basically it’s an an equity offering of sorts of you could think of it that way but we did a we did um a reverse dutch auction and with the res at the end of that point we bought another 175 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 uh without the company couldn’t have done it then we did a convertible debt offering for 650 million dollars of debt at 75 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 zero percent 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 a 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 of compliance you know we’re we’re filing 10 queues 10ks we’ve got a lot of a lot of compliance architecture security architecture i’m signing sarbanes-oxley statements you know every quarter right we’re responsible for fcpa you know et cetera responsibility so that gives that gives investors comfort with a publicly traded company so probably the most important thing to to take away from the podcast is bitcoin is an exploding uh asset class it’s it’s it’s it’s the greatest treasury reserve 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 with cash and you invest in you have inves you’ve converted a liability to an asset and so so i was enhancing the value of the company by pursuing the bitcoin strategy they go together they’re 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 300 400 000 listeners this month and in that audience probably you know five percent are as crazy about bitcoin as me um and have put like you know you know a huge chunk of their net worth into bitcoin and then you know fifty percent are curious and fifty percent are novices let’s say you know just roughly rounding things out and so just to put into context 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 specifics don’t matter you use about 500 600 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 um and you’re not alone actually all companies have this treasury problem whether they are aware of it or not so can you describe the treasury problem that you experienced and you experienced it at a 500 million dollar level but anybody including an individual with 500 000 or about you know 100 000 in the bank has the same fundamental problem so explain the treasury problem as you saw it a few years ago or yeah the treasury problem is that subsequent to march 2020 the cost of capital exploded from eight percent to 25 percent and uh you can see that in the performance of the s p 500 index which went from about eight percent a year for a decade to more than 25 in that next year that means that anybody investing money on behalf of a of a limited partner or any other investor has to generate that cost of capital in order to avoid destroying wealth if you inve if you generated less than a 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 spy index if you generated less than 25 from march of 2020 onward you destroyed wealth because you could have made 25 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 um the pro the treasury problem is that when the cost of capital is zero if by the way the cost of capital is being driven by the expansion of the money supply the federal reserve is expanding the m2 money supply by about five to six percent a year for that decade and when you tack on the risk premium you get to your 8 s p return when the when the federal reserve expands the m2 money supply by 20 to 25 that’s where you get that explosion and 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 uh the central bank uh decides to stimulate the economy the price of all the assets explodes um 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 to 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’ll 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 three and a half years you’ve lost half your money at a 25 cost of capital in 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 decapitalize and give all of their assets back to their shareholders because they can’t if sam is controlling an investment company that invests in dollars and you are running an investment company that invests in the s p 5 index and i gave each of you a million and sam proudly tells me how he didn’t lose my 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 that the problem is the company’s sitting on capital if it can’t meet the cost of capital it has to give the money back to the shareholders or at 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 um and the second pressure you have is if you run a company and your cash flows are growing at eight percent 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 value of your stock is going to be forecast to go to zero you can’t hold value in a company growing at five percent a year when the cost of capital is 25 percent a year that’s why the only thing 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 it’s growing two 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 march is 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 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 in 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 offered 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 uh the stock back at up to 140 and so we cushioned 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 uh with a different shareholder base so let me ask you a question now you know i i like the analogy or the kind of the 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 money printer that is uh causing acid inflation ice cube that’s melting and i save a 500 million dollar ice cube and it’s melting 20 percent a year and it’ll be gone and fine so you needed to do something with that you didn’t want it to all melt away so you decided to do this now a couple quick questions one is uh this is sort of rapid fire i’ve got a couple rapid fire questions for you in 20 years from now what do you think has generated more value uh or more income to the company to microstrategy is it the operating income of microstrategy or the investment income of the bitcoin it holds the investment income for sure okay and then uh you now to be 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 percent more doing nothing right 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 the 30 years and if you don’t own assets it’s impossible to have a good year right and um and so so the second question is um you uh as you acquire as you acquire more and more bitcoin is microstrategy bet like do you just position the company at this point like it’s a bitcoin etf it’s like buy this buy this bitcoin buying it it’s not a bitcoin etf everybody’s you’re sloppy with those words an etf is a company that invests in securities and it tries to keep its assets under management equal to the amount of shares of etf that it sold it’s a financial company an etp is a similar type of company that invests in commodities if you create you know 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 we’re not an etp we’re not eq we’re not buying or selling bitcoin to equalize assets under management we’re uh an operating company that owns property bitcoin is property and in that way you should think of it as a company that like i i bought a million acres of land in texas or i bought a million gallons of 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 uh that’s what we are now what’s your question you are talking about like let’s say the the cost of capital uh being 25 right because since march that’s what the s p500 has done but the stock market goes you know it does go up and down in years where you know the market dips and and goes up you know the average or you know over time the geometric mean is whatever seven or eight percent something like 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 um and so you have to make some prediction right and so are you are you basically forecasting it at 25 15 10 percent and does the decision change at a certain number there so so gen first of all for the decade from 2010 to 2020 it was generally about eight percent like it was it was pretty consistent and the single biggest driver of cost to capital 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 tr by the way the chart’s 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 uh if 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 400 trillion dollars worth of investors and it 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 same if you want to figure out the signal or or the single most important thing in the world for everyone but for everyone 7.8 billion people for 100 million companies for 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 percent a year for the next eight years you come to one conclusion if you plug in 10 it’s a different conclusion if it’s 25 it’s a different conclusion so what do i think i think that um 15 is 15 for the next eight years is reasonable um if you’re a pessimist you could say if you’re an optimist you could say 10 but the money supply is expanding because the federal reserve and the eu central bank are buying a trillion dollars worth of um bonds every year each and it’s also expanding because uh the the government of the eu and the u.s 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 at the point that the democrats took control of the senate and the house you saw that you have um if you could have you could have forecasted 12 percent inflation if it was a it was a split government but i think that in a a non-split 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 it means that the risk-free interest rate or the the risk-free return is 15 it means you have to generate in excess of 15 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 20 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 percent you’re destroying value in the bond if your rent yield is less than 15 your commercial real estate’s 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 capital equals the rate of the money supply expansion once you have that rate then you realize that there’s a negative real real yield on everything except for bitcoin for the most part the negative real yield on gold is three percent that’s the rate at which we mine it or hypothecate it the negative real yield on sovereign debt is about 12 13 the negative real yield on corporate debt is 10 percent every company that’s got a growth rate of less than 15 percent has got a negative real yield on it so you know once you do that then you can 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 borrow against your future cash flows and dollars convert that into bitcoin finance all your fixed assets in dollars convert that into bitcoin and issue equity as much as you can now at the highest valuation you can now in 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 an execution issue um 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 monetary network which is open an open protocol and the combination of apex asset on the open monetary system makes it the um the most disruptive technology in the world 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 you’ve gone way up the hierarchy of now we can do whatever we want now you can do whatever 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 uh yep it’s quite predictable at what point did that shift happen because what you’re talking about now is quite foreign to what i think we look we solved our problem when we actually embraced bitcoin i i i i could say to you oh yeah well 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 to 25 percent then all the public company investors forsake the company and if the stock if if the stock market forsakes the company the mainstream media for stakes 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 nobody wants to invest in a company that makes a lot of money growing at five percent a year i mean it’s it seems brutal to say that 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 everybody pat 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 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 revenues growing i have to take extreme risk and do dilutive acquisitions or i 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 those things the investors dump the stock and they dump the stock the employees start feeling like you know why don’t they go work some place cool and hot and you’re going to get all your engineers stripped away by facebook or or amazon or something so the truth is when we actually fix the balance sheet we fixed the stock and we fixed that you know at this point the company has five billion dollars more than five billion dollars in assets if the if the cost of capital remains at let’s say it goes up 20 percent if if we print 20 more money next year i can reasonably expect to generate a billion dollars in 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 100 000 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 could 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 at two or three percent a year you can go out and make things and create things and 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 percent 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 percent hurdle rate and so what who can generate consistently risk-free 20 returns you have to be a monopoly 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 get squeezed out of the ecosystem right they’re get they get decapitalized and rendered insolvent by by the monetary policy so i would say that you know if i can get my st my stock was 120 a share what is it right now like uh i haven’t checked in the market 768. okay so if i 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 of my customers i can i can drive momentum and then we can do what we want to do i guess it’s it’s similar to if you’re a university and you had no endowment you know and or university that has a billion dollar endowment or university is a hundred billion dollar endowment you know if you’re a professor which university you want to work for if you’re a student where you want to go you know do you have a shiny 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 if you have 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 micro strategy of just the the business as usual making the products that making business intelligence products versus investing the the income um i am i’m the ceo but we have a president and the president of the company is fong lee 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 i oversee the company strategy and i oversee that 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 and the day-to-day running the business that’s really left for the operating executive team so um about a year ago i tweeted out that i had moved 25 of my uh net worth into bitcoin which has now become like i don’t know 50 plus percent almost um 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 in in canada now sort of has owns businesses that are worth about over a billion over a billion dollars and he called me and he was just like hey i just want to make sure you know what you’re doing here and you know uh like a concerned friend and and he comes from like kind of the warren buffett and you know he’s a warren buffett disciple and famously buffett and munger you know charlie mugger called bitcoin uh rat poison and then buffett called it rat poison squared and so you get really intelligent people um who are well respected for what they’ve done um talking about bitcoin so first what’s your reaction to the buffett opinion on bitcoin i think everybody’s captured by their frame of reference warren buffett would would you agree that warren buffett for the most part made money investing in stocks yeah in non-technology stocks primarily and and maybe and maybe overseeing operating companies how successful would he have been if he did that in nigeria or let’s say zimbabwe or argentina for the past 15 years of venezuela not very strategy wouldn’t have worked right for example there is no strategy that would work if you were a business person in zimbabwe when the currency collapsed and if you look at the argentine blue dollar uh the argentine dollar the argentine peso actually used to be worth a dollar and then was worth and then it was three pesos to the dollar today it’s on the black market they call it the blue market it’s worth about 150 pesos to the doll 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 well if if you if you live in that world and you and you can make those assumptions great but what if the currency weakens at 15 a year for the next decade then um then your strategy doesn’t work so i 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 um that in the united states and western europe um 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 dollar is weaker and and if they tell you oh i had a great year all my my portfolio is up 37 or 50 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 um 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 virtuous business strategy for their success right and then they wonder why everybody else can’t be like them right 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 uh 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 electricity it’s such a new invention that um if if your friend said i spent 47 hours studying bitcoin right and i have the following you know detailed concerns about how it’s going to evolve as a dominant digital asset network and these are the things i’m worried about maybe with the constructive conversation but i 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 a thing it’s the first such thing in the history of the re 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 um a first in the human race that you know this is a fire in cyberspace that’s that’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 the broad money supply in the us and europe is all linked and all and all collapsing at a rate north of 20 percent we didn’t have this not in your lifetime not in my lifetime the last time we got something similar since 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 u.s bank the u.s was not the world current it was like 30 of the currency trades in the 1980s it wasn’t 90 percent 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 tied in the dollar so we arrive in a period in the last 12 months where where the behavior of the u.s fed and the expansion of the m2 money supply is in 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 um you’ve got most currencies weakening 20 to 40 percent 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 macroeconomic 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 zoom more disruptive than than the 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 some it’s a monetary fire it’s burning in cyber space and these two things together you know by how do you feed a monetary fire with money how 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 they’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 or you lived in lebanon and your currency like let’s take 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 30 return on your portfolio you don’t quite have the same appreciation of the yeah go ahead sam so you you it almost it’s almost like rooted and the decision to do all this is definitely shareholder stuff shareholder value but a lot of it was like really like well i just want to attract great talent um or that was definitely a a factor how has how many people work there now 2000 how has this impacted your ability to recruit and retain people it’s been great for retention has been great for recruiting we can get we 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 like what’s the culture like now is it different just more just happy bitcoin is hope okay so let me say it a different way if your family has a hundred thousand dollars 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 zero what’s your family’s morale right well i yeah and if your family had 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 it’s not black and white like that it’s not black and white no it’s not i’m looking at your glass door reviews i’m looking at the glass door reviews not everyone agrees uh like surely there’s downside to this i mean not everyone agrees i 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 on glassdoor i know that glassdoor 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 no there’s a there’s a thousand reviews and it’s been uh isn’t it for the past decade um but i can sort by date so i can i can tell you a a number by any you could just i could set it by uh any constraint right now it’s uh all so one thousand reviews within its and it’s a low review um and i and it so it doesn’t seem that everyone agrees with that are 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 no i’m looking at reviews all from 2020 there’s i think truth be told nobody gives a [  ] about glassdoor reviews right like you know i do i don’t know i think i think i think that i think there’s two no matter how thin the pancake there’s always two sides but there’s bits of truth in all of it right you could you could gain friends what is the 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 um it’s not black and white that like this has been perfect sam can i ask you a question in a slightly different way i think i get what you’re trying to say so it’s not 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 price is up like if you really disagree now this is your own personal problem at this point the strategy has 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 drawdowns and you have basically uh taken out a bunch of debt you bought bitcoin you own 5 billion 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 um you know what’s your reaction to that how you know how does that affect your strategy or what’s overall viewpoint of this possibility that’s not that that’s not the downside of your strategy right yeah yeah yeah on a day-to-day level at the company i imagine there’s a ton of people that love this but what 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’ve all benefited i can’t see any downside for the investors that stayed with us they’ve right i mean there are critics out there that don’t like bitcoin and by there are people that will say you’re a ceo you shouldn’t invest it you know i there are there are people that will say operating companies shouldn’t have assets right there’s a cr like uh there’s criticism people say well your ceo you should go back to your cubicle and write software and leave the investing to the professionals but i think that the fundamental element in the room here is that the macroeconomic environment is so incredibly unfair to people without assets like literally if you’re an 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 unless you have assets as part of your and so 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 you know crash draw but draw down 50 60 uh what happens to your position and uh what happens to your your point of view well we we have permanent capital so it doesn’t make a difference to us right like right now for example we have a three 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 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 if you’re if you 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 i can give you a thousand reasons why i think it makes sense to invest in like 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 bother me right there’s this is a rational if i had it to do all over again would i of course i would right 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 uh and i think we’re gonna we’re gonna have to wrap uh based on time so appreciate you coming on uh do you wanna leave anybody with a way to way to find you place to follow place to take a next step if they you know liked what they heard sure if you’re interested in bitcoin bitcoin is hope so go to h-o-p-e hope dot com we have lots of information in it if you want to follow me i’m uh michael underscore sailor on twitter how much you think bitcoin.com is worth roger vera owns it now how much would you be paying for bitcoin.com i don’t know i 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 uh over their heads that listen to this to be perfectly honest with you um i think but but i could distill it down into a very simple a simple way of looking at it for anybody that listened 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 saylor who own 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 uh sort of uh the most powerful treasury asset and he’s decided it’s bitcoin and uh you know square has put some money in paypal has put money in um tesla’s put a billion and a half dollars into into bitcoin um 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 uh that was a 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 with the cash if you’re an 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 i think that’s it’s a 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 they’re destroying 10 trillion dollars a year of value the solution is convert all of that into bitcoin bitcoin’s a trillion dollar the you know people that understand bitcoin think it’s going to grow to become the 10 trillion dollar asset the gold 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 and so if you have a company if you’re an investor it makes sense to buy it 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 because the road to serfdom is working exponentially harder for currency growing exponentially weaker right you’re just going to work yourself to death you know put yourself in a position of working as hard as you can in venezuela or 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 your monetary energy or your treasury by putting it into a scarce asset in a bank in cyberspace where no one can steal it 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 right yeah but 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 who 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 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 that before you invest the next decade of your life doing whatever stop and study 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 way the currency has never held it’s lost six percent of its value every year forever right it’s always losing 600 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 that will inform you with regard to with what what degree of enthusiasm will you pursue a hard asset strategy if you think that if you think that the currency is going to weaken rapidly then you would shift you would um you would shift and prioritize hard asset strategy and hard asset acquisition um aggressively and if you think that the currency is going to not weaken that rapidly you would prioritize other strategies right and you everybody’s got to make that decision for themself but when you know when zimbabwe started to crash normal companies management consulting companies 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’t there’s plenty of information in the world for you to form your own opinion once you’ve formed your opinion then then you can act accordingly cool all right michael thank you for coming on gentlemen yeah we appreciate this is great um thank you we just did this interview with michael’s what’s this sailor or yeah l right and no i mean i wouldn’t sure if it was sailor or sailor without an l recap it and then explain your opinion first objectively try to recap it objectively uh we had this guy on uh he’s objectively successful financially uh objectively a wonderful businessman he came on for he he said ahead of time his objective for this interview was to promote 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 60 plus minutes all about this topic and i personally pressed him on a few topics and he disagreed with me and my vibe this is no all right we’re past the objective part my vibe from this was uh i don’t trust i don’t trust his okay so i’ll give you my two cents and then we’ll we’ll just talk about it real quick so i just was i thought he came on just kind of low energy slash 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 him up just talk to him about something and he had zero interest in uh in chattan about uh anything besides the virtues of bitcoin and so that was a little bit i don’t know just personally a little off-putting i guess like i find it more fun when a 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 um i think that’s a great sign for the guest and i think in this case you know i didn’t walk away with that feel i agree with all the things he said objectively he’s super smart you know literally a rocket scientist who built a billion dollar company by the time you know a 10 billion dollar company by the time he was 34 you know from 24 to 34 he built a 10 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 you guys is definitely a smart guy and i think ahead of the curve in many ways i’ve read his book the mobile wave which he wrote 2012 basically saying that mobile’s gonna like mobile’s gonna destroy everything and uh which in 2012 was a sort of safe prediction but uh still a good prediction nonetheless i don’t agree with you that he was just like would you say like not trustworthy or something so explain well and let me just say this is like a d jerk reaction so i don’t want my opinion’s certainly evolving as as it’s going and and i’ve sean you’ve talked about them all the time so that was my experience when i read a 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 distrusting but there was something about it so in the interview i question about something silly not 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 i said your glass door reviews are pretty shitty like recently um well no you asked a more reasonable question you said it’s all been okay great bitcoin’s up this is your stock price is 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 objectively false because there’s there there’s some people they they’re 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 he kind of dodged the question and i couldn’t get the truth out of him and because of that i’m like if i can’t trust something so obvious or if someone can’t give me a straight answer on something i feel is so obvious of 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 um 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 how anything is how you do everything and and i also think that anyone who brags about how rational they are are some of the least rational people um i don’t which by the way i don’t think he bragged about it i think it’s like when you ask him you know this person is this bad thing about it he’s like well i just think it’s a clear because of this this is true that’s a rational thing in my opinion i don’t think he was saying yeah he 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 defend his i’ll defend by the way i spent most of the podcast basically even though i’m a huge bitcoin bull i spent most podcast podcasts bringing up things that a critic of his strategy and a critic of 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 three billion more our stock price is up i don’t know 4x since we made this strategy change and you’re asking me like how do my employees feel 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 price is up our assets are have we’ve gained a lot more value in our assets so what are you talking he was basically like there’s no downside that’s all upside so i get that but he didn’t uh you know give you the inch that i think most reasonably people would do which is to say that yeah everything has its trade-offs maybe like it would 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 just you know regulatory and legal you know like mess we had to 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’re 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 you can 100 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 i i don’t want to i like i said before the this is an all-knee jerk it just happened i i so i want to be careful my words if i said distrust i i actually i take that back i don’t entirely mean distrust but i i mean that there’s something going on that i had this gut feeling that um i can’t just believe what you’re saying and i want to go and and this should be the case all the time on my own right i think it’s all pretty above board which is he’s basically bet his entire company on bitcoin now they own five billion dollars of bitcoin the company’s worth seven billion and bitcoin you know so obviously and his objective his 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 um and it’s clear that he is incentivized for more people companies and individuals to buy bitcoin because he is maybe the largest holder of bitcoin in the world uh i don’t know i don’t know what satoshi’s stake is worth now uh maybe check that out does he have more bitcoin than satoshi he he i don’t think so he said i think it might be the podcast uh three billion at one point his three billion is his gain he owned they owned five billion dollars worth so uh what is satoshi’s stake 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 um when they are highly highly incentivized for you to invest in that same thing that doesn’t mean he’s 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 high conviction and he has an incentive to make other people believe it too abreu what did you think i mean i think i i just quaking in fear say what you really want to say let’s let’s not let’s not uh i will 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 like he doesn’t make for a great guest and you see this on other podcasts as well like when joe rogan has like some kanye well-renowned like super intelligent like scientists on sometimes they’re you know they’re they they just want to go on about their field and their studies and um so those will make for the best guess so i’ll say that um yeah which is kind of sad because you know from my point of view my i i guess we both walked away from the podcast feeling a little disheartened or i don’t know like whatever uh we didn’t we didn’t feel like we we had a slam dunk um i think you for a different reason than me for me it was just i didn’t think it was highly entertaining for people and i’m kind of bummed about that because i actually think it’s a super [  ] i think he’s a super [  ] interesting guy has had a super interesting life and business story and also what he’s doing with bitcoin i think is 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 saylor doing the yeah for this interview i think that would be way more entertaining than what actually happened when he came on was basically talking about quite technical you know economically technical terms that i think for most people they’re not going to resonate with it’s not going to click and doing it in a way that was sort of it didn’t feel like somebody who 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 was towards the end sean when you like took a few minutes and kind of explained what we just talked about in a 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 and unfortunately it 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 this um i think sometimes just the guest personality doesn’t make for the the best podcast well i think people can listen to it uh it’s an hour long i i i want to say i appreciate him coming on michael’s a big deal uh uh i i definitely appreciate him coming on i’m gonna i want to i definitely want to take back like you know the whole i don’t trust him entirely but uh there’s something sitting there after that interview there’s something sitting right where something inside me is like uh something is going on here and i gotta figure out what it is um maybe we can have him on another time now that we kind of like know him a little bit more but uh yeah i’m sure aside for themselves you know actually it’ll be kind of interesting because we’re gonna leave this in by the way like the whatever our discussion about it and i hope i hope it kind of gets received as what it is this is a instant hot take reaction to something that we were really excited about then it happened we’re giving a quick reaction i think uh you know sam basically uh didn’t see the the kind of the bitcoin bull case as black and white as maybe michael taylor first of all like let me just say that i when i my opinion of him is totally separate of bitcoin i would say i’m a i’m a huge novice i’m not an expert but uh i felt that he was actually uh he 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 i don’t know how to put it 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 um buy in 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 [  ] 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 guy’s company you know sometimes the way we feel he didn’t persuade me if 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 gonna can i try a three minute like billy of the week segment on this guy real quick this is your podcast you do what you want yeah go for it oh i are you interested i don’t know if you’re interested okay so let’s do it here’s here’s okay michael saylor to me is uh you know more than the billy of the week he might be the billy of the month uh okay so here’s some cool things about him that i found doing some research for this so the guy’s a badass he you know 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 um you know eventually like you know he i think for whatever reason he 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 um and so he’s like you know because they have a very strict requirement for so anyways he decides that 20 uh he’s he’s working at dupont i don’t know if he knew this part sam he’s he works at dupont when he’s like right out of uh college basically and he’s doing simulations for dupont and dupont’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 it’s sort of their pet project they don’t really want the simulation to be this really objective case of pros and cons they 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 the simulation and the simulation basically says don’t do it and anyways he 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 even 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 basically like hey where’s that kid who’s doing that model i need that data and he’s like um he’s like and they’re like he left the company he quit and so the guy’s like go hire him back give him what he wants and so they go to him and they say hey we want to hire you back and we’ll give you more money and he’s like i don’t really want to work there so i don’t want more money and then the executive’s like give him more we’ll give him what is it 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 um i want you to be my first customer so i want you to give me you know a few million dollars worth of contracts to do work for you and i’m gonna start my company microstrategy which does the same simulating thing for companies and you’ll be my first customer so pretty badass negotiation he goes and instead of being an employee he basically gets dupont to 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 they take all the data you have so like your victoria’s 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 so if you rebalance your inventory you’re going to save all this money and uh there’s data you’re sitting on this gold mine of data you just don’t know how to analyze it we can give you intelligence from this data so he does that for mcdonald’s and for victoria’s secret and 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 through that whole transition he’s been the ceo of for like 30 years like literally i was born in 1988 sam’s born in 1989 he’s been the ceo 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 500 million dollars of cash in the bank but the stock price is not growing and he’s like 500 million dollars i think personally he said uh no i think in this case it was the corporate treasury we had about 560 million dollars he owns the majority of the company i think he owns currently no i think i think in the podcast he was like i have whatever he he’s basically he was incredibly wealthy and the company was great he’s incredible and the company’s incredibly wealthy and he basically comes to this realization during the coveted crash and he’s talked about this on other podcasts which is it comes to this realization that um wait a minute if the money supply you know we hear about government stimulus we hear governments printing two trillion dollars six trillion dollars 13 trillion dollars total uh the money supply is increasing which means if you had 500 million dollars in the bank if you go back and look it’ll still save 500 million dollars but it won’t be able to buy you as much as it did before because there’s all this trillions of new dollars in the in the in the in the money supply and similarly like uh 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 at like all-time highs what’s 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 um zoom or you know zoom’s a bad example it’s not that apple is making all 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 in dollars which is getting printed and diluted essentially by the government right so long story short microstrategy goes out and they they basically do this aggressive aggressive um aggressive strategy to buy a quarter billion dollars of bitcoin they’re kind of the first public company to go do such a bold bet and then he keeps buying bitcoin um more and more and more he’s basically bought two billion dollars of bitcoin so first he took all the money they have a majority of the money they have and they bought bitcoin with it um 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 we’ll 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 bitcoin then he starts issuing debt he goes and raises 500 million dollars he goes 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 in two 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 um you know just behind satoshi and maybe a couple others and since then you know famously elon tweeted out something about bitcoin michael saylor responded saying hey from one rocket scientist to another let me show you how we let 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 um in addition to that some other cool things early on in the doc 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 alarm.comwisdom.comstrategy.com michael.com mike.comangel.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 he turned you know one or two million billion one or two million dollars sorry one or two million dollar domain purchases into over 100 million dollars of value um he also has this thing called sailor.org which is just like a free education it’s just a free university um and he said you know since 1999 they’ve had over half a million students in it so this guy’s done a bunch of cool [ __ ] and i think is like a pirate of the best kind like super smart technologist 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 i think michael uh and his team will reach out and say thank you sean because i think that you did an awesome job of uh you did a better job of showing showing off him than him uh which is cool and uh i think i think you’re just you’re just better at storytelling so maybe maybe uh maybe people will have a uh the same opinion after this interview the the part that i uh kind of was like i don’t know how i feel about this it happens like probably 15 minutes left in the episode maybe a brayu or someone will uh mark it uh and you guys will be able to hear it for yourselves but uh i think sean you’re just really good at this and uh i guess we’ll see uh this episode is gonna be weird it’s i wonder what the people are gonna say i guess we’ll find out yeah same all right cool i feel like i can rule the world i know i could be what i want to i’ll put my all in it like no days off on the road let’s travel never looking back