We Study Billionaires - The Investor’s Podcast Network BTC005: Bitcoin & Michael Saylor - A Masterclass in Economic Calculation (Bitcoin Podcast)
Dec 23, 2020
Michael Saylor, Founder and CEO of MicroStrategy, shares his deep insights on Bitcoin and the evolving economic landscape. He explains how he defines inflation and articulates the benefits of including Bitcoin on balance sheets. Saylor discusses the strategic use of convertible debt for acquisitions and predicts a ripple effect in corporate investment. He critiques traditional economic metrics and emphasizes the importance of reevaluating them in the digital age, positioning Bitcoin as a key asset in navigating financial risks.
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Defining Inflation
- Inflation is the rate of price appreciation for desired goods and services.
- Define your personal inflation basket based on your aspirations and lifestyle.
Cost of Capital & Hurdle Rate
- Use the broad money supply expansion rate (M2) as a cost of capital surrogate.
- Add a risk premium to this for your hurdle rate, exceeding it for wealth preservation.
2008 vs. Today
- In 2008, higher interest rates allowed for adjustments to offset risk premiums.
- Now, near-zero rates limit this option, making further rate cuts unsustainable.