WEBVTT - MicroStrategy's $3.9B Bitcoin Play: Use Saylor’s Infinite Money Glitch! 0:00:00.360 --> 0:00:04.240 Micro Strategy just unlocked a three point nine billion dollar 0:00:04.320 --> 0:00:07.920 infinite money glitch, and here's how you can steal it. Yes, 0:00:08.119 --> 0:00:11.239 you've heard that right. Michael Sailor's company, micro Strategy, has 0:00:11.320 --> 0:00:15.120 engineer a strategy so powerful it's turned three point nine 0:00:15.280 --> 0:00:19.240 billion in debt into a fifteen billion dollar bitcoin fortune. 0:00:19.280 --> 0:00:20.880 In the best part, you don't have to be a 0:00:20.880 --> 0:00:23.560 billionaire or a big corporation to take advantage of this. 0:00:23.680 --> 0:00:25.720 By the end of this video, you'll understand how to 0:00:25.800 --> 0:00:28.560 steal Sailor's playbook for yourself. So with this video, I'm 0:00:28.560 --> 0:00:31.760 going to break down how micro Strategy levered billions to 0:00:31.840 --> 0:00:35.800 create a bitcoin windfall, what exactly is the infinite money glitch, 0:00:36.040 --> 0:00:38.160 and how you can apply it for your own investments, 0:00:38.280 --> 0:00:40.960 and if there's still time to jump in and make 0:00:41.000 --> 0:00:43.440 the strategy work for you now real quick. My name 0:00:43.520 --> 0:00:46.440 is Mark Moss. I'm at a tech investor for two decades, 0:00:46.479 --> 0:00:49.200 two big exits. I speak on the largest bitcoin stages 0:00:49.200 --> 0:00:51.720 in the world. I'm a partner in leading bitcoin tech 0:00:51.840 --> 0:00:54.800 VC Hedge Fund, and I'm launching a brand new publicly 0:00:54.840 --> 0:00:57.480 traded company called Matador that's going to be following this 0:00:57.600 --> 0:01:00.840 micro Strategy playbook two point zero. So let me break 0:01:00.880 --> 0:01:03.760 down how we're stealing this strategy and how you can 0:01:03.760 --> 0:01:07.600 do the same. All right, we're gonna jump right into 0:01:07.680 --> 0:01:10.640 the infinite Money glitch. Now listen, there's a lots of cover. 0:01:10.640 --> 0:01:12.440 I want to tell you why they decided to make 0:01:12.480 --> 0:01:14.520 this and how it works, what their competitive vantage is, 0:01:14.560 --> 0:01:16.360 and of course at the end the last slide, I'm 0:01:16.360 --> 0:01:18.080 gonna show you how you can do this. There's a 0:01:18.120 --> 0:01:19.920 couple of ways you can play this on your own, 0:01:19.959 --> 0:01:21.679 but let's just start with this because I don't think 0:01:21.680 --> 0:01:24.319 anyone's ever broken the math down this way. You've never 0:01:24.360 --> 0:01:27.880 seen this before, the infinite money glitch. We all want that, right, Okay, 0:01:27.959 --> 0:01:31.240 So number one, let's explain how the glitch works. So basically, 0:01:31.280 --> 0:01:33.240 what micro Strategy is doing from a nutshell we'll get 0:01:33.280 --> 0:01:35.520 in the details. From a nutshell is they're taking on 0:01:35.680 --> 0:01:38.240 debt and they're buying bitcoin with it. All right now, 0:01:38.480 --> 0:01:41.320 up to date, since twenty twenty, they've taken on almost 0:01:41.360 --> 0:01:45.280 four billion dollars three point nine billion dollars in debt 0:01:45.440 --> 0:01:49.200 and they're now sitting on over fifteen billion dollars in 0:01:49.640 --> 0:01:53.440 market valuation. So four billion in debt fifteen dollars fifteen billion. 0:01:53.640 --> 0:01:55.960 Sounds pretty good, right, But how does this work? Let's 0:01:55.960 --> 0:01:58.360 sort of break down the math. Okay, so what micro 0:01:58.400 --> 0:02:01.120 Strategy is doing is they're using debt, but not just 0:02:01.280 --> 0:02:04.520 any debt. What they're doing is they're using something called 0:02:04.840 --> 0:02:08.359 equity convert markets. And so because micro Strategy has equity, 0:02:08.360 --> 0:02:11.400 it's a publicly traded stock, they're able to use that equity, 0:02:11.440 --> 0:02:14.120 that public equity and put that up as collateral to 0:02:14.240 --> 0:02:17.400 borrow money at really good rates. Now that equity could 0:02:17.440 --> 0:02:20.160 convert over if they don't pay it back, and so 0:02:20.200 --> 0:02:23.200 they're able to leverage debt at at a crazy lower level. 0:02:23.240 --> 0:02:25.760 Now you and I, unfortunately we can't do this personally. 0:02:26.160 --> 0:02:28.160 Other businesses are starting to do this, and I'll show 0:02:28.160 --> 0:02:29.880 you how that's working, but we can do it at 0:02:29.880 --> 0:02:31.560 different rates. But let me show you the math. Okay, 0:02:31.600 --> 0:02:34.639 So they've taken on kind of two different types of debt. 0:02:35.120 --> 0:02:38.400 One they take on debt and they're their highest they're 0:02:38.480 --> 0:02:42.280 paying is crazy one point seven to six percent interest 0:02:42.360 --> 0:02:44.720 on that, and then for the notes that are convertible, 0:02:44.880 --> 0:02:48.359 they're paying zero point eight. So they're literally borrowing billions 0:02:48.440 --> 0:02:52.320 of dollars at zero point eight percent. Wow, I wish 0:02:52.400 --> 0:02:54.840 I could get that, but we can't. Now, if we 0:02:55.000 --> 0:02:57.240 look at this, we can say, let's just take the 0:02:57.360 --> 0:02:59.040 highest amount I didn't go through and look at all 0:02:59.040 --> 0:03:01.720 the different percentage in trying. Let's just assume that all 0:03:01.840 --> 0:03:05.000 the debt, the three point nine billion, is all at 0:03:05.000 --> 0:03:06.800 the one point seven to six amount, which is not 0:03:06.919 --> 0:03:08.840 so it's actually less than this number. But for the 0:03:08.960 --> 0:03:11.040 easy math, let's assume it's at the one point seven 0:03:11.040 --> 0:03:14.040 to six. That would mean that they owe sixty eight 0:03:14.240 --> 0:03:17.200 million dollars a year just an interest, sixty eight million 0:03:17.240 --> 0:03:20.200 a year in interest. Okay, Now what does that mean 0:03:20.240 --> 0:03:21.800 for us? And how does this work in the infinite 0:03:21.800 --> 0:03:25.440 money glitch? Well, they're borrowing billions three point nine billion, 0:03:25.600 --> 0:03:28.880 they have fifteen billion in bitcoin, but they owe sixty 0:03:28.919 --> 0:03:31.560 eight million just in the debt service. But here's the thing. 0:03:31.600 --> 0:03:34.280 If we take a look at bitcoin, since micro Strategy 0:03:34.280 --> 0:03:36.760 has been doing this, which is the last four years, 0:03:37.040 --> 0:03:39.440 we can see in the last four years, since twenty twenty, 0:03:39.560 --> 0:03:43.720 bitcoin has been averaging a fifty five percent return per year. 0:03:43.760 --> 0:03:46.240 Now we can look at different time periods. We can 0:03:46.280 --> 0:03:48.000 go since the beginning of time. It's you know, the 0:03:48.040 --> 0:03:50.120 last decade, it's about one hundred and fifty percent, but 0:03:50.160 --> 0:03:52.120 I think the last four years is a pretty good 0:03:52.160 --> 0:03:54.160 time period to look at. Fifty five percent compared to 0:03:54.160 --> 0:03:56.560 the S and P five hundred and thirteen percent, Nasdaq 0:03:56.600 --> 0:04:00.520 thirteen percent, bonds, losing money, silver, two percent, goals, et cetera. 0:04:00.800 --> 0:04:04.920 But fifty five percent. So again back to the simple, 0:04:05.000 --> 0:04:09.600 easy math. They're borrowing at one point seven six percent 0:04:10.080 --> 0:04:12.480 and they're buying an asset that's going up by fifty 0:04:12.560 --> 0:04:15.600 five percent the four year average. So what this means 0:04:15.720 --> 0:04:17.480 is that they're making fifty five they're paying the one 0:04:17.480 --> 0:04:21.960 point seventy six they're netting. They're profiting fifty three point 0:04:22.000 --> 0:04:26.359 two percent per year by borrowing low and buying high. 0:04:26.560 --> 0:04:28.680 Maybe we call this a specuative attack. They're buying in 0:04:28.720 --> 0:04:32.400 a cheap, failing currency and they're buying in a harder currency. 0:04:32.440 --> 0:04:34.160 Now we can do the same thing. There's companies do 0:04:34.200 --> 0:04:36.159 the same thing, and you don't have to be a 0:04:36.200 --> 0:04:39.080 billionaire to do this. So let's break down how we 0:04:39.120 --> 0:04:42.480 can do this now. First thing, why are they even 0:04:42.520 --> 0:04:44.680 doing this? Besides the fact of making a lot of money, 0:04:44.680 --> 0:04:48.000 We want to understand micro strategies, big pivot Now. Michael 0:04:48.000 --> 0:04:51.839 Saylor has been on many shows conversations talking about this. 0:04:52.520 --> 0:04:54.400 I speak at a bunch of conferences with him, I've 0:04:54.440 --> 0:04:56.400 been at his house, I've had dinner with them multiple times. 0:04:56.520 --> 0:04:58.360 We've discussed this in great detail, and it's not a 0:04:58.400 --> 0:05:00.000 big mystery. Like I said, He's on lots of shows 0:05:00.120 --> 0:05:02.880 talking about it. And basically, micro Strategy is a software 0:05:02.920 --> 0:05:05.919 business and their business model was sort of trending down. 0:05:06.360 --> 0:05:08.640 The business model of a software company is great because 0:05:08.640 --> 0:05:11.960 there's a lot of recurring revenue MRR monthly recurring revenue, 0:05:12.240 --> 0:05:14.440 but it's very hard to continually build new software and 0:05:14.440 --> 0:05:16.520 stay up to date. And so he said, look, you know, 0:05:16.560 --> 0:05:18.240 I looked at this from a perspective of we have 0:05:18.279 --> 0:05:20.559 a lot of cash, but the cash is losing value. 0:05:20.560 --> 0:05:22.480 This is in twenty twenty when they were printing trillions 0:05:22.480 --> 0:05:24.680 of dollars of stimulus. So the cash is losing value 0:05:24.760 --> 0:05:26.760 very very fast. I don't know if I really want 0:05:26.800 --> 0:05:29.279 to invest it back into the software business. But we 0:05:29.320 --> 0:05:32.440 have this good cash flowing asset, so what should we do. Well, 0:05:32.480 --> 0:05:34.760 we looked at all the options we put into bonds 0:05:34.800 --> 0:05:37.640 or real estate or stocks or whatever, and we realized 0:05:37.680 --> 0:05:40.159 that the best place we could put billions of dollars 0:05:40.760 --> 0:05:43.599 for one hundred years. That was the qualification. The best 0:05:43.600 --> 0:05:45.200 place to put a big chunk of money for a 0:05:45.240 --> 0:05:47.640 long period of time was bitcoin, and so they did. 0:05:48.360 --> 0:05:50.840 Now I want to say right here that smart people 0:05:50.960 --> 0:05:53.520 change their mind. And this is for all the skeptics 0:05:53.560 --> 0:05:55.440 that are out there that think this is all a 0:05:55.480 --> 0:05:58.400 bunch of scam and joke and magic internet money. Michael 0:05:58.400 --> 0:06:01.400 Saylor did too. This is a whee from him December 0:06:01.440 --> 0:06:05.120 eighteenth of twenty thirteen, and he said that Bitcoin's days 0:06:05.120 --> 0:06:07.600 are numbered. It seems like just a matter of time 0:06:07.800 --> 0:06:10.400 before it suffers the same fate as online gambling. So 0:06:10.400 --> 0:06:12.839 in twenty thirteen he thought it was a scam, He 0:06:12.880 --> 0:06:14.600 thought it was a joke. He thought it was going 0:06:14.640 --> 0:06:17.320 to go away and then get rid of it. However, 0:06:17.680 --> 0:06:20.640 then just a few years later, seven years later to 0:06:20.680 --> 0:06:24.680 be exact, on September fourteenth, twenty twenty, Microsoft micro Strategy 0:06:24.720 --> 0:06:28.400 completed its first acquisition of sixteen almost seventeen thousand bitcoin. 0:06:28.480 --> 0:06:31.760 Amazing Bitcoin had an accurate purchase price of seven one 0:06:31.839 --> 0:06:34.240 hundred and seventy five million dollars. So he went from 0:06:34.320 --> 0:06:36.760 twenty thirteen saying, look, this is a joke, it's a scam. 0:06:36.760 --> 0:06:38.960 It's never gonna last. Going to go away to twenty 0:06:39.000 --> 0:06:42.479 twenty buying billions of dollars with it, and now twenty 0:06:42.520 --> 0:06:45.240 twenty four being what we call the Gigchad. He's like 0:06:45.600 --> 0:06:47.800 the biggest advocate of this, and he talks about it 0:06:47.839 --> 0:06:50.400 all the time. So they had to pivot away from 0:06:50.440 --> 0:06:53.120 the software, but they still have the software business. We're 0:06:53.160 --> 0:06:54.880 going to talk about this when we get deeper into 0:06:54.920 --> 0:06:56.840 the into the plan of how you can apply this. 0:06:57.240 --> 0:07:00.799 But what they really built wasn't just a way to hedge. 0:07:01.080 --> 0:07:03.200 I put here, the hedge isn't as good as a 0:07:03.360 --> 0:07:05.720 leveraged play. So whether they were just trying to hedge 0:07:05.760 --> 0:07:07.240 their position, like he wasn't just trying to say, how 0:07:07.279 --> 0:07:10.600 do we preserve our cash by putting it into another asset, stocks, bonds, 0:07:10.600 --> 0:07:12.840 et cetera. It wasn't a hedge. He was trying to 0:07:12.880 --> 0:07:14.880 find a way to leverage it up to do some 0:07:14.960 --> 0:07:18.400 financial engineering. Well, he is an engineer from MIT, That's 0:07:18.400 --> 0:07:20.440 why he thinks this way. All right, So now that 0:07:20.480 --> 0:07:23.440 you sort of understand the why, you might ask yourself, 0:07:23.600 --> 0:07:25.600 if you're in the same boat, do you have money 0:07:25.600 --> 0:07:28.080 that's in an asset that's not performing well, and would 0:07:28.120 --> 0:07:30.440 you like to put that money into the best performing 0:07:30.520 --> 0:07:32.680 asset And would you like to follow an engineer from 0:07:32.800 --> 0:07:35.520 MIT and learn how to do some financial engineering. Well, 0:07:35.920 --> 0:07:38.880 let's figure that out. What is the play for you? Then? Okay, 0:07:38.920 --> 0:07:41.280 So the key is, like I said, from an MIT engineer, 0:07:41.320 --> 0:07:43.840 how did he financially engineer this? And it's not just holding, 0:07:44.400 --> 0:07:47.080 not just holding, It wasn't just hedging, but it was 0:07:47.440 --> 0:07:51.080 financial engineering to actually leverage this up. And really, what 0:07:51.120 --> 0:07:54.520 micro Strategy offered to the market was what we call 0:07:54.880 --> 0:07:57.960 volatility as a product, which sounds crazy, right, And that's 0:07:57.960 --> 0:08:01.040 because for the average investor, they think that volatility is dangerous. 0:08:01.080 --> 0:08:02.360 It's one of the things that you hear about bitcoin 0:08:02.440 --> 0:08:06.520 the most, it's too volatile. Well, it turns out professional 0:08:06.520 --> 0:08:11.239 investors and allocators they want volatility. They want it because 0:08:11.560 --> 0:08:14.320 volatility is this how do you make money if an 0:08:14.320 --> 0:08:17.640 asset say straight you don't you need volatility, and people 0:08:17.720 --> 0:08:21.400 want to. Professional audicists want to bring volatility their portfolio, 0:08:21.600 --> 0:08:24.080 believe it or not, when well, that's why they're the 0:08:24.080 --> 0:08:27.920 smart money. And so he offered volatility as a product 0:08:28.200 --> 0:08:30.920 and he has a stock now that moves multiples on 0:08:30.920 --> 0:08:33.719 top of bitcoin. So Bitcoin's already too volatile for some, 0:08:34.080 --> 0:08:35.880 and now it moves multiples on top of that, which 0:08:35.920 --> 0:08:39.800 means it's even more volatile. But of course, volatile means 0:08:39.880 --> 0:08:43.040 moving up and down, not just down, but up and down. 0:08:43.040 --> 0:08:45.720 And what we can see here is that micro Strategy 0:08:45.760 --> 0:08:49.360 has been outperforming everything else. As a matter of fact, 0:08:49.400 --> 0:08:52.200 we can see this sort of teal green line right here. 0:08:52.600 --> 0:08:55.680 That's micro Strategy and it's close, sort of neck and 0:08:55.720 --> 0:08:57.880 neck with this blue line right here, which is in Vidia. 0:08:58.320 --> 0:09:01.559 So in Vidia and micro Strategy absolutely crushing it. Everything 0:09:01.600 --> 0:09:04.800 else is down below this orange line right here, that's 0:09:04.800 --> 0:09:09.600 where Bitcoin is. And then down here this yellow line 0:09:09.640 --> 0:09:12.520 that just basically sits flat ray here that's the QQQ. 0:09:13.240 --> 0:09:16.679 Then this blue line that's even a little bit lower 0:09:16.679 --> 0:09:19.040 than the yellow line, that's the SPY, the S and 0:09:19.040 --> 0:09:23.160 P five hundred. So stocks are down here, Bitcoin is 0:09:23.240 --> 0:09:27.840 right here, in Vidia is right here, and micro Strategy 0:09:28.120 --> 0:09:31.640 is sitting right there completely outperforming everything because of the 0:09:31.679 --> 0:09:35.640 financial engineering that we have. Now it hasn't just been 0:09:35.679 --> 0:09:38.600 outperforming all of those things and even Bitcoin, but when 0:09:38.640 --> 0:09:40.840 we look at it priced in bitcoin this is an 0:09:40.840 --> 0:09:43.280 important thing. I do everything like this. We can see 0:09:43.280 --> 0:09:46.720 that micro strategy priced in bitcoin since January of twenty 0:09:46.760 --> 0:09:48.840 twenty three, not since twenty twenty, but since twenty twenty 0:09:48.880 --> 0:09:52.800 three is up almost two hundred and eighty percent priced 0:09:52.800 --> 0:09:55.760 in bitcoin just since January twenty twenty three. So it's 0:09:55.800 --> 0:09:59.319 been working really really well. Now back to the sort 0:09:59.320 --> 0:10:00.960 of the math. How does he do this? It seems 0:10:01.080 --> 0:10:05.079 very risky, right, Leverage is bad. Leverage is dangerous, especially 0:10:05.360 --> 0:10:08.600 on a very volatile product. So how does Michael Saylor? 0:10:08.600 --> 0:10:11.320 How does it engineer from MIT manage the risk and 0:10:11.360 --> 0:10:14.240 something like this? Well, they manage the risk with cash flow. 0:10:15.080 --> 0:10:18.360 A small business owner, are you buried in all types 0:10:18.360 --> 0:10:20.560 of work keeping you from the real thing that makes 0:10:20.640 --> 0:10:23.240 you money? Well that's where Just Works comes in. They're 0:10:23.240 --> 0:10:26.080 the all in one platform that supports small business growth. 0:10:26.240 --> 0:10:28.880 You can get all their tools that help with benefits 0:10:28.920 --> 0:10:33.480 like payroll and HR and compliance with transparent pricing. Now 0:10:33.559 --> 0:10:37.080 they help you hire top talent internationally internew markets, quickly 0:10:37.360 --> 0:10:41.480 scale international operations without the workload, and forevery how do 0:10:41.559 --> 0:10:43.440 I do it? Question? You can reach out to their 0:10:43.440 --> 0:10:47.000 expert staff from sole proprietor or a team of twenty. 0:10:47.360 --> 0:10:50.960 Just Works empowers all kinds of small businesses with real 0:10:51.080 --> 0:10:55.360 human support. So visit Justworks dot com slash podcast to 0:10:55.480 --> 0:10:58.440 join the thousands of small businesses that trust Just Works 0:10:58.559 --> 0:11:01.640 to take care of payroll and if it's compliance and more. 0:11:01.679 --> 0:11:07.680 Again that's Just Works dot com slash podcast. So, as 0:11:07.720 --> 0:11:11.880 I said, micro Strategy has been borrowing three point nine 0:11:12.000 --> 0:11:15.640 billion dollars. They have to pay sixty eight million dollars 0:11:15.679 --> 0:11:18.720 a year in interest. What happens if the price of 0:11:18.760 --> 0:11:22.080 the asset goes down? What if bitcoin drops to fifteen 0:11:22.080 --> 0:11:26.120 thousand or ten thousand? So what he just has to 0:11:26.160 --> 0:11:28.360 pay the sixty eight million dollars a year. Well, how 0:11:28.360 --> 0:11:30.600 does he do that? Well, turns out he has a company, again, 0:11:30.679 --> 0:11:32.720 a software company that throws off a lot of free 0:11:32.720 --> 0:11:36.080 cash flow. So his company, micro Strategy, is throwing off 0:11:36.200 --> 0:11:40.280 last quarter one hundred and eleven million annualized I'd be 0:11:40.400 --> 0:11:43.400 over four hundred million. This is a five year chart 0:11:43.480 --> 0:11:46.920 of the gross revenue on a quarterly basis, and what 0:11:47.000 --> 0:11:49.120 we can see is this is one hundred and thirty 0:11:49.559 --> 0:11:53.520 right here and right down here is about one hundred. 0:11:53.920 --> 0:11:56.760 So we're in this about one hundred and fifteen one 0:11:56.840 --> 0:12:01.080 hundred and twenty million dollars of gross cash flow per 0:12:01.280 --> 0:12:04.760 quarter or over four hundred year. So he's making four 0:12:04.840 --> 0:12:08.600 hundred ish and he owes sixty eight ish. And so 0:12:08.679 --> 0:12:11.120 that's how he hedges his downside, even if the collateral, 0:12:11.160 --> 0:12:13.600 even if the price of bitcoin drops to five ten thousand, ten, 0:12:13.679 --> 0:12:15.880 whatever it is, as long as he can continue to 0:12:15.880 --> 0:12:18.559 pay the sixty eight million dollars in interest. He can 0:12:18.600 --> 0:12:20.880 do that now because of that, because he has the 0:12:20.920 --> 0:12:22.800 cash flow. This is key when we get back to 0:12:22.800 --> 0:12:24.640 how we apply this on our own. Because he has 0:12:24.640 --> 0:12:26.800 the cash flow to cover the debt service, he can 0:12:26.840 --> 0:12:30.200 continue to leverage it up without the risk. You see, 0:12:30.200 --> 0:12:32.280 most people get themselves into trouble. They burn their house 0:12:32.320 --> 0:12:35.839 down with the leverage. But he is managing his downside. Okay, 0:12:35.880 --> 0:12:37.959 is that sound good? Now? How do you and I 0:12:38.080 --> 0:12:41.040 how do we steal this strategy? How do other companies 0:12:41.480 --> 0:12:45.040 steal this strategy? Okay, well, before we get into how 0:12:45.080 --> 0:12:47.120 you and I and how other companies are stealing the strategy, 0:12:47.120 --> 0:12:48.240 I want to give you the name of a couple. 0:12:48.480 --> 0:12:50.800 Before we get into that, let's talk about just the 0:12:50.800 --> 0:12:53.360 elephant in the room. Should you be buying micro strategy, 0:12:53.400 --> 0:12:56.439 or should anybody be why wouldn't they just buy bitcoin directly? 0:12:56.520 --> 0:12:59.679 And this is a good question to understand bitcoin or 0:12:59.720 --> 0:13:03.520 micro strategy, which one's better, especially considering that micro strategy 0:13:04.000 --> 0:13:07.800 is a big, hefty premium over to just buying bitcoin directly. 0:13:08.640 --> 0:13:11.400 So let's answer this question. Number one. The way that 0:13:11.440 --> 0:13:15.400 micro Strategy has developed this or financially engineered it again 0:13:15.840 --> 0:13:18.839 is that for about every one dollar that bitcoin goes 0:13:18.920 --> 0:13:22.640 up in price, micro Strategy goes up by two dollars 0:13:22.840 --> 0:13:26.000 on their market cap. That's pretty interesting, and that's because 0:13:26.000 --> 0:13:29.000 of the levers they put into the system. Also, micro 0:13:29.120 --> 0:13:34.200 Strategy has much better regulatory protection and clarity. What do 0:13:34.240 --> 0:13:36.080 I mean by this? I am not telling you that 0:13:36.080 --> 0:13:37.920 the governments are going to make bitcoin illegal, they're going 0:13:37.960 --> 0:13:39.240 to take away or right to own it. I don't 0:13:39.240 --> 0:13:41.000 think that's the case, not in the United States theame way. 0:13:41.040 --> 0:13:44.400 I think that ship is saled. But still today there's 0:13:44.440 --> 0:13:48.000 a lot of institutions, funds, things like that that don't 0:13:48.040 --> 0:13:51.000 allow you to buy bitcoin right it's a commodity and 0:13:51.040 --> 0:13:53.960 they can only buy equities for example. Maybe some people, 0:13:54.040 --> 0:13:56.679 maybe foreigners, they can't buy the bitcoin ETFs that are 0:13:56.679 --> 0:13:59.680 available and so it's very easy any one of these 0:14:00.080 --> 0:14:03.480 foreign people, institutions, etc. Can just buy in equity, and 0:14:03.520 --> 0:14:08.600 so there's regulatory protection around equities. They're already very well established, 0:14:08.720 --> 0:14:11.160 but the commodity side, or the ETF side of bitcoin 0:14:11.240 --> 0:14:14.320 is still unclear of how different funds mandates allow them 0:14:14.360 --> 0:14:16.760 to do that. So you can really think of micro 0:14:16.840 --> 0:14:20.360 strategy really as like a high octane ETF. It's easy, 0:14:20.440 --> 0:14:22.120 click up a button, I can bring it in, I 0:14:22.160 --> 0:14:24.040 don't have to custody it. I don't have to worry 0:14:24.040 --> 0:14:27.920 about cold storage or any of that, and it goes 0:14:28.000 --> 0:14:32.520 up at a much more multiple than just bitcoin ETF. 0:14:32.520 --> 0:14:34.400 If buy the bitcoin ETF, for every one dollar goes up, 0:14:34.440 --> 0:14:36.640 micro strategy is going up by two dollars. But listen, 0:14:36.800 --> 0:14:39.480 there are trade offs. I'm not saying you should go 0:14:39.520 --> 0:14:41.560 buy a micro strategy. What I'm saying is they're different, 0:14:41.640 --> 0:14:44.320 they hold different roles in your portfolio. Break that down 0:14:44.320 --> 0:14:46.520 for you in a second. But there are tradeoffs. Like 0:14:46.600 --> 0:14:48.560 I said, one, with micro strategy, you don't have to 0:14:48.560 --> 0:14:51.000 worry about the onboarding and the storage and all those things, 0:14:51.200 --> 0:14:53.400 but you also have a lot more volatility you have 0:14:53.480 --> 0:14:56.680 to work with or deal with I should say. And 0:14:57.160 --> 0:15:00.240 one of the things with micro Strategy versus bitcoin is 0:15:00.280 --> 0:15:06.120 because of the debt service, it has these reflexive feedback loops, right, 0:15:06.200 --> 0:15:07.880 So Bitcoin sort of sits in the middle and it 0:15:07.880 --> 0:15:10.440 continues to go up. Now, what we can see is 0:15:10.560 --> 0:15:13.160 how that's worked out for micro Strategy in the last 0:15:13.200 --> 0:15:16.080 four years and since twenty twenty, we can see that 0:15:16.160 --> 0:15:20.520 micro Strategy has outperformed everything with a one three hundred 0:15:20.560 --> 0:15:23.360 and thirty nine percent return, while Nvidia, which is also 0:15:23.400 --> 0:15:25.840 all performing a thing, is up nine hundred and fifty percent. 0:15:26.240 --> 0:15:28.160 So that's a pretty big deal. Down here, we have 0:15:28.200 --> 0:15:31.560 Tesla one fifty three, Google one forty, Microsoft one ten, 0:15:31.640 --> 0:15:36.200 Apple one hundred ninety nine, Meta eighty one, Amazon sixteen percent. 0:15:36.520 --> 0:15:40.200 So because of this financial engineering from an MIT engineer 0:15:40.200 --> 0:15:43.360 like Michael Saylor, he's been able to propel his company 0:15:43.480 --> 0:15:47.880 to outperform everything else. Okay, so how do you steal this? 0:15:47.960 --> 0:15:50.560 How do other people steal this exact same strategy? How 0:15:50.600 --> 0:15:53.120 can we do it? Because I can't borrow at zero 0:15:53.160 --> 0:15:55.440 point eight percent like he does, and I'm sure you 0:15:55.480 --> 0:15:57.440 can't either. Okay, there's a couple of ways we can 0:15:57.480 --> 0:16:01.280 do this. Number one, basically we're leveraging debt. Now, this 0:16:01.320 --> 0:16:04.320 is something I've talked about for a long time. This 0:16:04.360 --> 0:16:06.800 really kind of came into my purview when I was 0:16:06.800 --> 0:16:09.640 studying the history of the Weimar Republic, the hyperinflation that 0:16:09.680 --> 0:16:12.360 happened there, and a man in Hugo Stenez became one 0:16:12.400 --> 0:16:15.000 of the wealthiest men in Germany at that time, and 0:16:15.080 --> 0:16:18.040 he did it by forming a speculative attack, which is 0:16:18.080 --> 0:16:20.040 basically borrowing as much money as you can in a 0:16:20.040 --> 0:16:23.000 failing currency to buy harder assets. He was borrowing in 0:16:23.040 --> 0:16:25.680 the German Mark, and he was buying factories and hard assets. 0:16:25.840 --> 0:16:28.240 And this is sort of what sailor's doing. He's borrowing 0:16:28.280 --> 0:16:30.920 in dollars which are losing value, and he's buying bitcoin, 0:16:30.960 --> 0:16:33.320 which is harder and going up. So we can leverage debt. 0:16:33.360 --> 0:16:35.920 Now again, you and I can't go leverage debt. We 0:16:35.960 --> 0:16:37.800 can't go borrow a billion dollars a zero point eight, 0:16:37.840 --> 0:16:41.280 but we can still borrow. For example, you probably have debt. 0:16:41.320 --> 0:16:43.320 You might have a house loan, a car loan, a 0:16:43.320 --> 0:16:45.840 boat loan, something like that, and you could either one 0:16:46.000 --> 0:16:49.440 pay down more principle on that credit card, that house, 0:16:49.560 --> 0:16:51.920 that car, etc. You can pay word principle, or you 0:16:51.960 --> 0:16:53.800 can take that money instead of paying more down on 0:16:53.840 --> 0:16:56.040 your home, paying off for fifteen years, you could take 0:16:56.040 --> 0:16:57.880 that money and you could go buy bitcoin with it. 0:16:57.960 --> 0:17:01.040 That's essentially the same as borrowing. Right already have debt out. 0:17:01.240 --> 0:17:03.280 If I'm not paying the debt down faster buying something else, 0:17:03.320 --> 0:17:06.200 I'm basically using borrowed money for that. It's one way 0:17:06.200 --> 0:17:07.919 to look at it. Another way to look at it 0:17:07.960 --> 0:17:10.440 would be borrowing money out of my house. Maybe I 0:17:10.520 --> 0:17:14.440 took a home equity line, a credit line, something like that. Obviously, 0:17:14.560 --> 0:17:16.240 maybe my car's paid in cash. I can get a 0:17:16.240 --> 0:17:18.360 title loan against my car. I can get a credit card, 0:17:18.400 --> 0:17:19.880 and I can borrow against my credit card. And I'm 0:17:19.920 --> 0:17:22.399 certainly not saying that you should do those things. What 0:17:22.440 --> 0:17:26.720 I'm saying, though, is we're leveraging debt now. Should we 0:17:26.960 --> 0:17:29.040 or shouldn't we do that? Well, that's a personal question, 0:17:29.080 --> 0:17:30.879 but let me break down some math for you. So 0:17:30.880 --> 0:17:32.159 the first thing is we want to think about what 0:17:32.280 --> 0:17:35.040 is the average gain that we expect bitcoin to have 0:17:36.040 --> 0:17:38.680 minus the debt service we're going to have to pay. 0:17:38.720 --> 0:17:43.040 So I showed you with micro strategy, they're gaining about 0:17:43.080 --> 0:17:47.000 fifty five percent a year. But they're paying you know what, 0:17:47.160 --> 0:17:48.959 is it less than two percent? It was like one 0:17:49.000 --> 0:17:51.320 point eight, right, so they're paying less than two percent. 0:17:51.400 --> 0:17:53.719 Now I can't get at that rate. But if I 0:17:53.800 --> 0:17:55.800 don't pay my mortgage down, my mortgage is at like 0:17:55.840 --> 0:17:58.520 three and a half. So I can get an asset 0:17:58.520 --> 0:18:01.000 that's doing fifty five percent pay three and a half. 0:18:01.359 --> 0:18:03.840 Maybe I get a car loan instead of paying cash 0:18:03.840 --> 0:18:05.200 for my car, I get a car loan and maybe 0:18:05.200 --> 0:18:07.880 that's eight percent, So now it's fifty five percent gain 0:18:08.280 --> 0:18:10.800 minus eight percent. Maybe I go get a hard money 0:18:10.840 --> 0:18:13.159 loan and maybe it's ten percent or twelve percent, So 0:18:13.200 --> 0:18:16.480 now it's fifty five percent minus ten percent. So now 0:18:16.520 --> 0:18:20.000 I'm netting forty five percent? Am I okay with that? 0:18:20.280 --> 0:18:23.199 Does forty five percent sound good? And that's a personal 0:18:23.280 --> 0:18:25.920 question for you. I can't answer that. Now. The key 0:18:26.040 --> 0:18:28.800 is is not to use leverage and burn your house down. 0:18:28.920 --> 0:18:31.480 I've done that before. It's not good. Don't do it. 0:18:31.600 --> 0:18:33.800 So how do we do it? Well? We protect our downside, 0:18:33.840 --> 0:18:35.960 just like Michael Sailor does. We need to make sure 0:18:35.960 --> 0:18:39.480 that we have the cash flow coming in to cover 0:18:39.800 --> 0:18:43.640 the debt service. Don't expect that every single year you're 0:18:43.640 --> 0:18:45.520 gonna make enough money to pay off the debt. Because 0:18:45.640 --> 0:18:48.240 sometimes there's down years you need to protect your downside. 0:18:48.400 --> 0:18:50.840 Michael Sailor, of course, has a software business that's throwing 0:18:50.840 --> 0:18:52.720 off a lot of free cash flow. For me, I 0:18:52.760 --> 0:18:55.720 have businesses, I have other cash flowing assets, so I 0:18:55.720 --> 0:18:58.680 can borrow some of this debt, put it into bitcoin, 0:18:58.920 --> 0:19:00.800 And as long as I have the cash flows coming 0:19:00.840 --> 0:19:02.679 in from other sources that can continue to pay that 0:19:02.760 --> 0:19:06.320 debt service, then I've at least limited the exposure to 0:19:06.359 --> 0:19:07.960 my downside. I want to make sure I can cover 0:19:08.000 --> 0:19:11.560 that debt. Now, a question you might ask is, if 0:19:11.600 --> 0:19:13.680 this is so good and mark you make it seem 0:19:13.720 --> 0:19:16.480 so simple, are more people doing this? Or I should say, 0:19:16.480 --> 0:19:19.040 maybe who else is doing this? Well, let's take a 0:19:19.080 --> 0:19:21.359