The Exchanges

Q 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 and holding companies.

A Everybody's, you're sloppy with those words. An ETF is a, 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. And ETP is a similar type of company that invests in commodities. If you create, you know, if you create this Bitcoin entity that, uh, 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, 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, um, 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, that's what we are. Now, what's your question?

AI assessment note: “We're neither of those things. We're not a finance company. We're not an ETF.”

Q 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?

A 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 six percent value. You just have to decide for the next decade whether or not the cost of capital is going to be eight, 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 the 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 …

AI assessment note: “the currency has never held, it's lost six percent of its value every year forever.”

Q 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, it's quite predictable. At what point did that shift happen? Because what you're talking about now is quite foreign to what...

A I think we, look, we solved our problem when we actually embraced Bitcoin. I could say to you, oh yeah, when I had five hundred 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%, then all the public company investors forsake the company. And if the stock, if the, 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. It, but it wouldn't be true if the cost of 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 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 growin…

AI assessment note: “I think we, look, we solved our problem when we actually embraced Bitcoin.”

Q 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 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.

A 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 all benefited. 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, there are, there are people that will say operating companies shouldn't have assets, right? There's a crit like a, there's criticism. People say, well, you're a CEO, you should go back to your cubicle and write software and leave the investing to the professionals. But I think that the, 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 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 strategy.

AI assessment note: “I can't see any downside for the employees. They've all benefited.”

Q Well, like any reasonable, most reasonable people, which the reason you are where you are is you're, many would probably consider you not reasonable, right? I mean, you have your, 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

A 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 in 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, my real view is, is I think people are, are crazy, uh, 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 ingenious stuff with like two Y's and a Z, you know, and I'm like, why would you do that? Because in the modern era of spell checkers, When you try to type these crappy brands that are misspelled, 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 gotta pay a hundred million, or two hundred million, or five hundred million dollars, Because if I see your, your ad and you tell me that, you know, your brand is alert…

AI assessment note: “So I just, I always viewed domains as being undervalued”

Q Like, what's the culture like now? Is it different?

A Just more, just happy. Bitcoin is hope. Okay. So let me say it a different way. If your family has a 100,000 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? It's like you're in people's death. And if you, if your family had a 100,000 in Bitcoin at the same, in the same year, and I told you, oh, by the way, Bitcoin's 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 someone feeling it. it.

AI assessment note: “Just more, just happy. Bitcoin is hope.”

Q mean is whatever, seven or eight percent, something like that. 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%, eight percent, and does the decision change at a certain number there?

A So, so generally, 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 of capital is the rate at which the broad money supply expands. And if you look at, if you go Google M two money supply fed, you'll get a chart and you'll see the chart 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, 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 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 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 a hundred 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 estimate the rate at which the currency is going to expand. And if you believe the …

AI assessment note: “what do I think? Um, I think that, um, 15% is”