This is a great opportunity to learn from Michael Saylor. He provides insights that come from his history of both success and failure in investing and creating.
Some of the things we learned from this video include:
Historical context on the way the old tech titans ended up “dematerializing” things as a business model. Google dematerialized every book and library. Netflix dematerialized every video. Amazon dematerialized storefronts. Apple dematerialized the many devices we all used to have to use for audio, video, phone, compute. Facebook dematerialized our social relationships. So, if you invested in those firms, it was a good run. But bitcoin was not understood for quite a while. For many, Bitcoin was seen as a tool for gamblers, hackers, anarchists and cyber criminals. But for those that watched closely, opinions changed. Saylor believes the best way to learn what Bitcoin is really about is to jump in and learn. Better late than never is his motto here.
Figure out the thing that is going to eat the world. Own it, hold it, and wait.
There are three ways to make money in this world, you make make something, you can trade something, or you can own something. With crypto, for many of us, it is an opportunity to own something. And, with the right crypto (bitcoin) it is an opportunity to own something that will keep its value over time.
He is of the strong opinion that if you believe in something you should not try to time the market because the market can, and very likely, will, disagree with you. He points out again and again how he has failed at trying to time the market, just to save a small amount.
Why does he like Bitcoin today?
He views Bitcoin as the first software network in the history of the world that can pool monetary energy. It can hold value for years without losing value. Other stores of value do not have that. A stock can go to zero. A house can be taxed. Gold has been used to hold value for years but it is not a virtual asset.
Bitcoin is a software network of great value that can be exchanged and is 50x bigger than its competitor.
Saylor likes that many disagree with him. We are so early that of the maybe 10,000 billionaire entities out there, maybe 10 of them “get it” when it comes to what bitcoin really is. Saylor likes that he gets it early.
He believes that so many risks have been seen and dealt with which removes fear and helps people understand the need for Bitcoin.
People claim Bitcoin is volatile. But it really isn’t when compared to other investments, and it seems that the next decade will probably not be as volatile as the last decade.
The monetary supply is expanding. It will probably expand at double the rate. This is stampeding many investors into a store of value. So many old classes have zero yield. If the monetary supply expands at this rate, returns on many classes, like bonds and treasuries, are actually negative. Investors are desperate to flee currency.
Bitcoin is the Facebook of monetary systems.
What happens when a billionaire shows up with a billion dollars and wants to drop it on the Bitcoin network.
Why was gold a store of value? till now there was no choice! It worked as a store in part because it was only diluted by mining at about 2% a year and demand and the growing economy was at about the same, and, it was the only choice.
Bitcoin is a better store of value because it is not being diluted like gold and does not require permission of a bank or government or politician to own.
Buying Bitcoin is buying the winner. Buy and hold Saylor says.
This is a monetary network never before seen, and we are buying it at the beginning of the s-curve.
Saylor also asks a hypothetical question for us to think about and provides an answer. What if you wanted to provide an asset to your children 30 years from now? What would your choices be? Would you buy a stock now and expect it to have value 30 years from now? Probably a bad move. Would you give them a house? That would be taxed and need upkeep. What about Gold? Could be cut, stolen, diluted. Bitcoin, on the other hand, is a store of value that is like a pure piece of financial energy that will not deteriorate and cannot be diluted or taken away by any government. It is held for no carry cost. It is like magic, for the first time in human history we have figured out how to send money forward in time without losing it.
Saylor’s view: You’ve got to own and hold something. Make it Bitcoin. Don’t sell a good thing. For Saylor, being a trader is not the way, it is being a holder. His view is that every billionaire on the planet got there by buying and holding something. Bitcoin is what he is holding next.
The tax code is hostile to moving things in and out of positions, which also makes it good to be a holder.