2023-11-30 22:13:07
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Shareholder value was more at risk prior to the bitcoin strategy. Most other business analytics companies went away or were absorbed into the tech titans. MicroStrategy was hanging on, but it was a melting ice cube, which then makes it hard to attract the best employees or maintain the best economy of scale, which then accelerates the melting of the ice cube.
And within the bitcoin strategy, taking on debt is the bigger risk. If bitcoin is in a bear market when their debt matures and without a lot of gains from the cost basis, that could cause them to dilute equity at a bad time, or have to sell bitcoin, or do other inopportune actions that would damage shareholder value.
Issuing overvalued equity to buy more bitcoin and thus improve the bitcoin-per-share metric, mildly de-risks the company by improving the equity/debt ratio, and is good for shareholder returns, assuming shareholders are bullish on bitcoin (which by this point, most of them are). It makes the overall company size way bigger, gives them a warchest of capital if they need it, helps them hire top talent including for their business analytics business, and reverse the melting ice cube trap.
MicroStrategy's bitcoin acquisition strategy has been really on-point.
I analyze a lot of stocks and see how they manage their shares. Most companies are rather pro-cyclical in this aspect. They buy back a lot of shares when times are good and shares are expensive, and then when there's a recession they reduce or eliminate their share repurchases, ironically when shares are cheap and it would be better to buy them.
A small percentage of companies have more forward-thinking executives that manage to do this more counter-cyclically. They buy back more shares then they are cheap, and they retain more cash or do other things with their cash when their shares are more expensive.
MicroStrategy has been doing this quite well, except it's about the strategy of issuing shares for bitcoin, which if bitcoin continues to be successful will have more impact overall.
When MicroStrategy wants to buy more bitcoin (which is always), what they seem to be optimizing for is how many bitcoin can they get per share. That's what builds shareholder value in this context. So when MicroStrategy stock is trading at a valuation premium relative to its underlying bitcoin, they can take that opportunity to issue more of these expensive shares, and buy bitcoin with those proceeds. When there is not a valuation premium, they can focus more on just buying bitcoin with incoming cash flow, or exploring other low-cost financing.
So far, they have been really on-point about managing this.
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2023-11-29 17:19:43
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An app that lets you privately hold money spread across multiple Chaumian mints in easy shared UX. Each mint could itself be federated. And then above a certain threshold of value, pull into self custody.
That’s pretty sovereign. No single entity can rug your whole stack, your stack is privately spread across multiple custodians in multiple jurisdictions, and the payment UX is great. And certain mints can add extra sub-apps like interactive maps to find local merchants that accept bitcoin, or interact with Chat GPT by paying sats, or Nostr-related stuff, or data storage, etc.
What would it look like, if an emergent money was being monetized?
Often when I talk with academics or other high-IQ critics of bitcoin, it’s the volatility and seemingly speculative aspect of it that turns them off. It’s almost distasteful to them. They can get behind the idea of global open-source payments and so forth, “but that’s not why people buy it” they’ll say. “They buy it because they’re speculating. It’s too volatile for its own good.” Some aspect of them dislikes it in principle, almost *because* one can make money from it.
But a new decentralized money, including its own unit of account and liquidity, doesn’t just emerge as a multi-trillion dollar-equivalent network out of the box. In order to go from zero to trillions in market capitalization and liquidity, it needs upside volatility. And with upside volatility comes speculation, leverage, and downside volatility. Cycle after cycle, it’s priced like an option. At first it’s like a 0.1% chance that it succeeds in the long run. And then in the next cycle it’s like 1%. And then in the next cycle it’s like 5%, and so forth. So, early capital allocators that have seen a thing or two and know the high failure rate of new ideas will say, “This’ll probably fail, but if it doesn’t, both the investment gains and the macro implications will be enormous.” And then 15 years into it with a few more cycles under its belt, the probability of success looks less like a distant moonshot and more like a real possibility, and then eventually starts to look like the base case. In the beginning the question is, “how will this succeed?” and at later stages the question becomes, “what risks could prevent this from continuing to succeed?”
The process of buying bitcoin is often a speculative process at first, but then as people learn more, they often view it differently. Those that really want speculation will then continue down the pipeline of altcoins- there’s always some shiny new object to try to speculate on. On the other hand, those who begin viewing bitcoin as money, start to view it as a defensive or risk-off act to hold a piece of this liquid and globally decentralized network of value. One would feel too financially exposed not to.
Losing someone young, or losing an older person while you are young, is always hard.
When my father passed away from cancer while I was in my early twenties, it wasn't surprising at all. This fact had been coming for two years, slowly. But when it came, it hurt just as bad. And till this day it still hurts.
I was at work and got a call; it was a hospital. They said my father had been suddenly transferred to hospice, and it wasn't looking good. He probably had a week at most. He was in another state. The doctor transferred my father to me on the phone and my father was weakly like, "hey...." and I said hello, and I said I'm coming now. He said, "No don't... uhh.... don't worry... you are far and have work... I'm fine...." I asked then why was he transferred to hospice if things were fine. He was like, "uh well... well you know.... uh.... it's fine...." And I was like, "holy shit I'm coming right now."
So I went to my boss and looked at him. I had previously told him that there might be a moment where I would have to just immediately leave without notice, no matter how important the meetings and such, because of my father. So in this moment I literally just looked at him in the middle of a busy day and was like, "I gotta go" and he was like "of course". So I drove there, two hours away and went straight there. My father weakly said on the phone not to go, but he never sounded like that, so I went immediately.
I got there, and my father was in a hospital in the death ward, and the guy who greeted me was a pastor rather than a nurse, which was not a great sign. I asked what was going on and he told me straight up that this was not good, that my father was likely dying within a week. So he brings me to my father. My father is barely awake. His memories and statements are all over the place, but I just hold his hand and tell him that it's fine and I love him. I'm just there. He kept fading out and I was like, "it's okay, just relax". He could see me and talk in a rough sentence or two and thanked me for coming, but started to fade away.
And then after like 30 minutes, he went fully unconscious. He was still roughly gripping and shaking the bed headboard and so forth but wasn't conscious (and I was like, "Are you all giving him the right pain medicines, this doesn't look good", and even the pastor was like, "yes I have seen many and this is not comfortable" and I was like an angry 23-year-old so I went out in the center area like, "what do all of you even fucking do here?! He is shaking the bedframe and looks in pain, and even the pastor agrees. Holy shit." So I went and got medical attention to deal with this, but felt slow and ineffective at this. They gave him more morphine and it calmed him down, but while it relaxed him, he ultimately didn't wake up again.
I spent the next couple hours there, and then left and called various family members for my second round when he was unmoving. I said if they want to see him, come now, in the next day or two.
But a little while later after I left, I got a call and was told he had died. Only I (and the nurses) saw him while he was still briefly conscious.
During that call itself, I was stoic. I was like, "Yes, I understand. Okay." and then hung up. And then I sat there for like five minutes in silence... and then cried. I got over it quickly and we did the funeral in the following days. My father had been struggling with cancer for years, so this wasn't fully surprising.
But what lingered was the memory. It has been 13 years now, and yet whenever I am in my depths I still think of my father. The memory never gets weaker. I think of his love, or I think of how attentive he was, or how accepting he was, or what he would say about my current problems.
People we love, live on through us. We remember them so vividly, and we are inspired by them.
If he was a lame father, he wouldn't have so many direct memories 13 years later. But because he was a good and close father, he does.
All of those memories are gifts. All of them are ways of keeping aspects of that person alive in our world. It's how we remember them in the decades that follow. Their victories, their losses, and everything in between. Virtues they quietly did that you find out later. Virtues you realize only in hindsight how big they were.
Overall liquidity conditions have been holding up better than the raw monetary aggregates would suggest over the past year.
A lot of this is due to the Treasury offsetting some of the Fed's tightening attempts. More structurally, however, I also think this partly because over time, what we use as "money", especially savings, changes over time.
Money market accounts in the form of T-bills, reverse repos, and so forth have become increasingly part of "money" in the fiat system.
Including near-money assets, the overall money supply has held up over the past year better than the normal monetary aggregates like M2 would suggest.
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I see a lot of posts about Thanksgiving discussions on bitcoin. It’s usually from the American-style perspective, like trying to convince your normie drunk uncle and aunt, and they often don’t see the demand since they have top-tier money and their downsides are subtle. They are like, “why the fuck does someone need a BitCoin?”
Meanwhile, my husband’s equivalent Thanksgiving discussion will be far easier, since he is in Egypt with our family managing a new property build-out for nine people that we are doing, and their bank just blocked my payments to them for the next capital infusion for no stated reason. So now we have to do a bunch of janky high-fee remittance workarounds for a time-sensitive payment (like making your mortgage) and then expend our human capital to go to the bank in the US and figure out where this got blocked (our bank didn’t specify, but implied on Egypt’s side). Every bank sucks here. None of them were clear, which means the customer has to investigate.
The idea of self-custodial global open-source money would be inherently interesting to my family’s dinner if it catches on and starts to have more liquidity points in Egypt like it has in Argentina, Turkey, and Nigeria.
Meanwhile drunk Americans will be like, “What does a BitCoin do, lol?”
Sometimes I get invited onto shitcoin or shitcoin-adjacent podcasts. And there materializes a dilemma.
Should Republicans go on MSNBC? Should Democrats go on Fox? I mean, probably, if you are comfortable with what your performance will look like with the hosts. After all, you're touching an addressable audience. To the extent that you're successful, you are pushing forward. You're not locked in there with them; they're locked in there with you.
So if they're large enough, I tend to do so, but I won't change what I say since I don't honestly care if I get invited back. If they want to mess around and have me there, I'm willing to mess around and talk real.
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Im always shocked that retailers still exist. I rarely do in-person clothes shopping anymore.
I had been meaning to go to Macy’s to buy some coats but kept delaying it. So I go today, get some coats, and it turns out they are 60% off for Black Friday even though it’s Wednesday, and even though there is no line/craziness today. So I’m like, “alright, thanks”.
Huge store, so many products, not many shoppers, and they must have a decent amount of unsold product for certain things. Based on what I paid for these coats I can’t see how they made any money from me and this is like, my once-per quarter trip to Macy’s.
I’m glad they exist so I can go sometimes, but I just look around and think “how are you all still here!?”
I’ve been critical of Musk on a number of topics, but they all come back to a lack of honesty, and a wide public bid/ask spread on that perception. Just that one thing.
I don’t think he is unintelligent, or racist, or antisemitic, etc. He is just not genuine. And he bends over for strongmen dictators while pretending to be a freedom advocate.
Likewise, you will rarely if ever see me criticize SpaceX results. I never criticize SpaceX rockets blowing up and so forth. Rocketry is fucking hard and it’s about gradual iteration. SpaceX is doing fine technically as far as I can tell as a space nerd. They’re getting better. The overall US space industry has been in absolute shambles for over a decade now, so I welcome some progress there. The only extent that I’ve ever criticized SpaceX is to remind people on the right that neither Tesla or SpaceX are the Libertarian dreams that many of them imagine. SpaceX has been reliant on many government contracts, and Tesla has been reliant on many government subsidies. For SpaceX I am not saying that’s good or bad per se (they do compete for it), but I’m saying we finance a good chunk of it out of taxes. But other than making sure people are familiar with the funding source, I haven’t criticized SpaceX yet.
I’m pretty specific.
Musk’s Twitter/X has recently lost a lot of big advertisers after some seeming endorsements that Musk made on some anti-Semitic posts.
Do I think Musk is anti-Semitic? No. I just think he is a cuck, frankly.
Like, he will say one thing if the wind is blowing that direction, and then say the other thing if the wind starts to blow otherwise.
He cares what Xi Jinping thinks which is pretty consistent, and cares about the political tide in the US which blows back and forth. His recent anti-Semitic confirmations were likely just an instance of him leaning too quickly in one way, and being caught out on it. He tried to be vague but it didn’t work. And then he backpedaled.
Meanwhile, Musk also actively caters to leaders of countries that request (and receive) the most content takedown requests on Twitter/X, like Modi and Erdogan, as long as they are potential markets for SpaceX and Tesla. Under the leadership of Musk, Twitter/X statistically agrees to government takedown requests for content at a much higher rate than the company previously did. It’s just mostly outside of the US now, so all of our domestic discourse is about freedom.
https://www.forbes.com/sites/katherinehamilton/2023/04/27/twitter-has-complied-with-almost-every-government-request-for-censorship-since-musk-took-over-report-finds/
Musk previously catered culturally more to woke folks, like in 2021 when he said Tesla would resume accepting bitcoin payments only when bitcoin was over 50% “clean”. He needed those ESG vibes back then. But now that the woke trend turned into a based trend, he shifted to ride more on that one instead. He posts way less about the environment and way more about socio-cultural issues now.
Musk is likely not dumb/small enough to be personally against any particular ethnicity or religion of people as a group. He clearly thinks bigger and more pragmatically than that.
Instead, he is just trying to stick his finger in the air, measure the winds, and lean in any momentum direction culturally.
Meanwhile the large corporate advertisers like Apple and Disney advertisers who dropped Twitter/X for advertising are also doing similar. They are pulling back in the heat of the moment to gauge public perception, and then will move forward slowly based on polls and research. It’s the same vibe as when they put up rainbow flags on their domestic Twitter/X accounts but then of course don’t dare do the same for their Middle East accounts. Region by region polling and brand management. Never genuine, always calculated.
Anyway, good morning.
I know it's all the rage these days in US politics, but I don't really care what someone's race, gender, orientation, or identity is.
I just care whether they are based or not. Like what expertise or other skillset they have, or how much I can reason with them.
In other words, as someone famous once said he would like to see, I judge people based on the content of their character.
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Less than 5% of my business revenue comes from advertisements, but occasionally I do one if I'm using a product anyway.
For example, I use a certain stock/ETF broker that I like a lot, so I also went ahead and had affiliate partnership with them as well.
But then after years they switched to some other link-tracking backend, which required a whole new third party account creation, etc. The prior one was seamless. So for the first few months I just didn't bother to care, and they kept reaching out to switch over to this new system and get back to advertising them. Eventually I was like, "fine" so I signed up for an account at the new backend. But it was buggy and glitchy, kept not working, they reset the account, and it still didn't work, so now I just don't advertise them anymore. Wasn't worth the hassle.
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It’s amusing that whenever on-chain fees have even a modest spike, people immediately freak out about the design state of BTC/LN.
It’s like, we go through one period of “fees are too low, bitcoin will become insecure, these are rookie numbers, we need to pump those numbers up with altcoins on Bitcoin” and then we skip any sense of middle ground, and go right to “omg with even several dollar equivalents of fees the LN is terrible and we should do this soft fork”.
In the future, assuming overall network adoption continues to grow, I expect fees to be higher on a more sustained basis, and so people will be less caught off guard in terms of how they are using the protocol. It’s that rapid transition from low fees to high fees that seems to catch so many people off guard.
I’ve spent a lot of hours analyzing “crypto” and keeping up with the fads, and to this day I still cannot find a problem that I have, and that it can solve.
Bitcoin solves my hard globally-portable savings problem. I don’t see better money than this. And that’s a big problem to solve.
Stablecoins solve some developing market intermediate-term money problems in very inflationary environments as a bridging tool while Bitcoin is still volatile. Okay. That’s big for now.
Digital collectibles are fine. I mean, I have cardboard Magic the Gathering cards worth thousands of dollars. So you buy an ape NFT and get membership to an exclusive ape club (which is like all dudes, nearly entirely devoid of women) and can show your status by displaying your supposedly elite avatar. I do see how there is a nonzero recurring interest in this sort of digital elitist collectible thing. But it doesn’t solve any of my problems or seem to be relevant on the macro scale. A niche thing that doesn’t appeal to me. Like, Pokémon might make a billion dollars but it won’t make a macro-scale trillion dollars.
DeFi is mainly about trading and leveraging worthless tokens. In a world where there are much more real-world tokens involved (eg tokenized Apple stock or whatever), then maybe there is more of a use for that. But until then it’s mainly a circular Ponzi. And even then, that industry is limited.
So almost 15 years into this industry, there have been a handful of interesting experiments, but barely anything other than bitcoin and stablecoins interests me at scale.
Beyond that, it is just things that they can empower.
Nostr, for example, doesn’t need a blockchain. There is no reason to go to the expense to maintain a global state. It certainly is empowered from the fact that Bitcoin and Lightning exist (new good money allows for new good technologies), so it’s a tangential technology.
The vast majority of “crypto” projects either don’t solve a problem, or just solve a smaller niche interest.
I watched a ton of Japanese anime and US animation growing up in the 1990s and 2000s. And I occasionally still watch a modern one like Attack on Titan although I rarely watch any series anymore. It’s just the occasional movie or book now.
But one thing that always provoked me, even as a kid, was when they made the hero in a dark story too kiddie. As a kid, I wanted to see teenagers or adults, not kids. And now as an adult that occasionally watches a show with younger family members, naturally I don’t just want to see kids now either.
I’m happy to rewatch old Disney movies because they don’t suck. People die. Shit gets real, and quickly. And yet these are kids movies.
Like, Kora blows Aang away in terms of realism in terms of how serious the surrounding context was. Aang’s story plot was deep and involved combatting genocide, for example. His entire ethnicity was rendered extinct (“The Last Airbender”) and it was about to happen to others, and there were deep plots on ethics, and yet this is the kid we have to watch for sixty episodes. It was a story about genocide for children, involving children. Couldn’t we have made him a teenager at least, so that when he fights men it is more believable? Meanwhile Kora was far more interesting and realistic, because she had a similarly severe set of surroundings including political intrigue, war, murder, torture, suicide, etc, but she was aged appropriately for that context to not be utterly distracting in terms of (even magical) realism. https://image.nostr.build/7fd4caf241e158f0a315f258380a21837cbc734680adcdfd27c314f9cfce5fb0.jpg
