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Have you seen what Microstrategy is doing?

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  • adventure
    replied
    Originally posted by jacoavlu View Post

    they purchased their btc with cash reserves that Saylor couldn’t figure out anything better to do with.

    Their notes were just issued so we will see what they do with their new debt.

    don’t conflate a discussion of a story I find interesting, with my opinion. I would find it similarly interesting if Microstrategy had chosen to put their reserves in gold.

    Yeah, this is interesting. There are so many investment options, why this one? Just buying a mutual fund, or BTC is easy - and doesn't take the work VC does... I'm interested to see how much capital is made available for lending in 2021 - There is certainly a lot of capital sitting around.

    Leave a comment:


  • Tim
    replied
    “hes not framing this as an investment. They’re looking at btc as their treasury reserve asset. ”

    •Hedging is a risk management technique to reduce risk, basically a zero sum game.
    •Hedge fund is an attempt to leverage profits by increasing risks.

    Currency hedging is the most familiar treasury function. Net foreign currency exposure is hedged. No matter which way it fluctuates, the result in base currency is the same.

    Taking an “open” position is speculation. It is absolutely ignorant to spin this as a “treasury reserve”.

    Give me the btc receivables/payables.
    If the convertible notes were denominated in btc, the btc holdings would be a hedge. The is what the treasury asset would accomplish.

    This is just currency speculation. Be like Nick!

    https://www.google.com/amp/s/amp.the...995-20-archive

    Leave a comment:


  • xraygoggles
    replied
    Originally posted by Lordosis View Post

    Asymmetrical risk is easier to identify after the fact.
    After you missed out on millions? I guess.
    Last edited by xraygoggles; 12-17-2020, 06:03 PM.

    Leave a comment:


  • Lordosis
    replied
    Originally posted by xraygoggles View Post

    I think it's more used in the world of hedge funds, using macro and micro trends along with algorithms. So no, not every stock would apply. It doesn't apply only to stocks also.

    The way I use the term is basically trying to prognosticate certain trends which are occurring or imminent.
    Asymmetrical risk is easier to identify after the fact.

    Leave a comment:


  • jacoavlu
    replied
    Originally posted by Tangler View Post

    The word: BIG is what you missed. I know it is there, along with the unknown winners you and i don’t recognize.
    my bad, I did miss that

    Leave a comment:


  • xraygoggles
    replied
    Originally posted by CordMcNally View Post

    Wouldn't every stock technically be an asymmetric risk using that definition?
    I think it's more used in the world of hedge funds, using macro and micro trends along with algorithms. So no, not every stock would apply. It doesn't apply only to stocks also.

    The way I use the term is basically trying to prognosticate certain trends which are occurring or imminent.

    Leave a comment:


  • CordMcNally
    replied
    Originally posted by xraygoggles View Post

    I would call Bitcoin more of an asymmetric risk. Meaning the potential upside is exponentially larger than the potential loss.

    Tesla was another asymmetric risk last few years, if you were paying attention. Some other ones in 2020 would be real estate in VHCOL areas (SF, NYC); Ethereum; Gold futures; SPAC warrants; equity LEAPs; cannabis plays. I've dabbled in some of these, and I'm not complaining at all with the results to date.
    Wouldn't every stock technically be an asymmetric risk using that definition?

    Leave a comment:


  • Tangler
    replied
    Originally posted by jacoavlu View Post

    already in vtsax
    vtsax owns a little over 3% of MSTR
    0.0036% of your vtsax investment is in MSTR
    The word: BIG is what you missed. I know it is there, along with the unknown winners you and i don’t recognize.

    Leave a comment:


  • xraygoggles
    replied
    Originally posted by Tangler View Post
    1. single stock (uncompensated risk vs VTSAX)
    I would call Bitcoin more of an asymmetric risk. Meaning the potential upside is exponentially larger than the potential loss.

    Tesla was another asymmetric risk last few years, if you were paying attention. Some other ones in 2020 would be real estate in VHCOL areas (SF, NYC); Ethereum; Gold futures; SPAC warrants; equity LEAPs; cannabis plays. I've dabbled in some of these, and I'm not complaining at all with the results to date.

    Leave a comment:


  • mgchan
    replied
    Originally posted by Tangler View Post
    Wow.

    Several reasons i personally would avoid this:

    1. single stock (uncompensated risk vs VTSAX)
    I'd say the compensation is the 90% more money you could have earned in the last 2 months buying MSTR rather than VTSAX.

    Not that I'd advocate buying MSTR (might as well just buy bitcoin or something similar), but obviously there is some compensation. For the risk, there's a potential reward.

    Leave a comment:


  • jacoavlu
    replied
    Originally posted by Tangler View Post
    Wow.

    Several reasons i personally would avoid this:

    1. single stock (uncompensated risk vs VTSAX)
    2. I don’t understand it (even if i were to pick stocks)
    3. They bought bitcoin
    4. feels like another hype machine like Tesla
    5. If it makes it big, it will show up big in VTSAX anyway.
    already in vtsax
    vtsax owns a little over 3% of MSTR
    0.0036% of your vtsax investment is in MSTR

    Leave a comment:


  • EntrepreneurMD
    replied
    Overstock has already tried this with some but limited success.

    Leave a comment:


  • Tangler
    replied
    Wow.

    Several reasons i personally would avoid this:

    1. single stock (uncompensated risk vs VTSAX)
    2. I don’t understand it (even if i were to pick stocks)
    3. They bought bitcoin
    4. feels like another hype machine like Tesla
    5. If it makes it big, it will show up big in VTSAX anyway.

    Leave a comment:


  • jacoavlu
    replied
    Originally posted by Max Power View Post
    You can find whatever you like interesting, but I see no reason to applaud it. This is just a company making a speculative investment... then borrowing to double down on it also. I just don't see how that's ever a solid move (for individuals or corporate). Why didn't he start a Bitcoin investment company that could go bankrupt if he's wrong... instead of likely ruining a good one and driving some folks to leave and/or sell out their shares? All of this from what is likely his midlife crisis?

    They didn't take out loans to create assets such as develop a new product, build new stores, market a new product that tested well, hire talented new engineers, build new production factories, expand international, etc. They didn't borrow to ride out a tough economy and make bills and payroll in the meantime. Those would be the (possibly) smart reasons. They borrowed it to gamble that many other people will buy Bitcoin in the future... there is no other way to win now.

    Even assuming he is correct, a software guy borrowing money to all-in invest in digital currency speculation is totally out of his element. Even the financial companies do that stuff with caution and stay behind the cutting edge when it is something so silly. It is akin to Facebook doing the VR headsets now or when Gillette tried to do shampoo and small elecronics which crashed and burned... totally out of their realm. It is called "Diworseification," and it's not a new thing...

    "AVOID DIWORSEIFICATIONS
    Instead of buying back shares or raising dividends, profitable companies often prefer to blow the money on foolish acquisitions. The dedicated diworseifier seeks out merchandise that is (1) overpriced, and (2) completely beyond his or her realm of understanding. This ensures that losses will be maximized.
    Every second decade the corporations seem to alternate between rampant diworseification (when billions are spent on exciting acquisitions) and rampant restructuring (when those no-longer-exciting acquisitions are sold off for less than the original purchase price). The same thing happens to people and their sailboats."
    - Lynch, One Up On Wall Street
    I’m not sure if you’ve followed the story other than what is my admittedly poor synopsis here. I think you of all people may align with much of Saylor’s thinking, except for the fact he favors btc and not gold. But the thought process is similar

    hes not framing this as an investment. They’re looking at btc as their treasury reserve asset. That which they expect to best maintain purchasing power over the very long term. He actually talks about the greater fools theory and he talks a lot about gold. His thoughts on how gold fails over the very long term. Gold miners vs gold investors.

    Leave a comment:


  • Max Power
    replied
    Originally posted by jacoavlu View Post

    they purchased their btc with cash reserves that Saylor couldn’t figure out anything better to do with.

    Their notes were just issued so we will see what they do with their new debt.

    don’t conflate a discussion of a story I find interesting, with my opinion. I would find it similarly interesting if Microstrategy had chosen to put their reserves in gold.
    You can find whatever you like interesting, but I see no reason to applaud it. This is just a company making a speculative investment... then borrowing to double down on it also. I just don't see how that's ever a solid move (for individuals or corporate). Why didn't he start a Bitcoin investment company that could go bankrupt if he's wrong... instead of likely ruining a good one and driving some folks to leave and/or sell out their shares? All of this from what is likely his midlife crisis?

    They didn't take out loans to create assets such as develop a new product, build new stores, market a new product that tested well, hire talented new engineers, build new production factories, expand international, etc. They didn't borrow to ride out a tough economy and make bills and payroll in the meantime. Those would be the (possibly) smart reasons. They borrowed it to gamble that many other people will buy Bitcoin in the future... there is no other way to win now.

    Even assuming he is correct, a software guy borrowing money to all-in invest in digital currency speculation is totally out of his element. Even the financial companies do that stuff with caution and stay behind the cutting edge when it is something so silly. It is akin to Facebook doing the VR headsets now or when Gillette tried to do shampoo and small elecronics which crashed and burned... totally out of their realm. It is called "Diworseification," and it's not a new thing...

    "AVOID DIWORSEIFICATIONS
    Instead of buying back shares or raising dividends, profitable companies often prefer to blow the money on foolish acquisitions. The dedicated diworseifier seeks out merchandise that is (1) overpriced, and (2) completely beyond his or her realm of understanding. This ensures that losses will be maximized.
    Every second decade the corporations seem to alternate between rampant diworseification (when billions are spent on exciting acquisitions) and rampant restructuring (when those no-longer-exciting acquisitions are sold off for less than the original purchase price). The same thing happens to people and their sailboats."
    - Lynch, One Up On Wall Street

    Leave a comment:

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