MicroStrategy's infinite money glitch

[engineering]

You're barking at the wrong tree. Mircrostrategy is a profitable company and produces cash flow from business operations

They sold (oversubscribed) convertible notes within the past 4 months, do you think the buyers were too stupid and did not do proper due diligence?

Such arrogance from the naysayers here assuming investors into mstr shares and debts are all blind and dumb

Maybe, just maybe, they've done more research than all of you since they actually have money at risk


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Never assume that just because "they" are buying it it's a good buy.

The notion that because a company shows a paper profit it's a buy is silly.

You need to look a things like PE ratios, debt, etc.

Besides, you're wrong on even the basics MSTR is losing money. Go look at the financials.
Last quarter net income before tax $-214.38m
Before that
$+8.01m
Before that
$-38.05m
Before that
$-33.83m

People buy MSTR to gamble on Bitcoin not because of their operations as a software company.

 

[johnarb]

Never assume that just because "they" are buying it it's a good buy.

The notion that because a company shows a paper profit it's a buy is silly.

You need to look a things like PE ratios, debt, etc.

Besides, you're wrong on even the basics MSTR is losing money. Go look at the financials.
Last quarter net income before tax $-214.38m
Before that
$+8.01m
Before that
$-38.05m
Before that
$-33.83m

I don't know how to read the financials, but you need to look at the breakdown as others on YouTube have already done

mstr is profitable, $50-75M/yr cash flow from operations

Never assume that just because "they" are buying it it's a good buy.

People buy MSTR to gamble on Bitcoin not because of their operations as a software company.

You seem to be the one making assumptions of what others are doing with their money and investments

Perhaps you should tell us what you're invested in or shorting and your reasons so we do not assume

Where is your life savings and net worth invested in?

My biggest position is bitcoin and have said this even during the bear market past 2 years

[I can no longer say 90%+ as mstr options has produced $300k of realized cash profits I cannot touch due to tax obligations for next year and still holding mstr options July 2024 expiration]

 

[engineering]

I don't know how to read the financials,

"Quarter net income before tax"
Usually a brokerage provides summary financial information for any ticker.

To get a full picture:
Go to EDGAR and pull up their reports. The more you read, the easier it gets .

This might help

Just to reinforce: mstr 2023 10k:
Net cash provided by operating activities
12,712
Net cash used in investing activities
(1,905,237 )
Net cash provided by financing activities
1,889,886

For practical purposes, their function as a software company is not significant. Less than 1% of the cash that moved in the company was anything other than investing/financing.

I would not consider anyone that does not understand that the primary function of this stock is Bitcoin speculation as someone with a clue.


Personally, I'm mostly a diversified value investor. I limit my position sizes and am prepared to hold for years.

 

[johnarb]

Personally, I'm mostly a diversified value investor. I limit my position sizes and am prepared to hold for years.

Value stocks have not done very well past 5-10 years, tech stocks and the magnificent 7 have crushed their performance

If you understand why, you would be a Bitcoiner

Money printing has increased the value of all assets during the past decade, asset inflation in nominal value

Global central banks with the Fed and China and Japan are about to embark on a massive printing of money again, whatever excuse may come up

Your current hurdle rate is 5% with risk-free US Treasuries, plus with inflation that you know is much higher than published, are you really going to hold and cope for years thinking the world is going to change?

Money is broken. You are storing your wealth and life savings in inferior assets just to satisfy your internal Buffett intellectually-superior value analyst

Ultimately, you have barely kept up with the US $ debasement, you would have had much better performance being concentrated in the high-growth tech stocks or magnificent 7

You have been generous with your time in replying to posts here on ET, perhaps you might have time to read the book "The Bitcoin Standard", the pdf is free for download if you feel strongly against paying for it, the author encourages it

Before Saylor proposed the treasury move to bitcoin, he sent a copy of The Bitcoin Standard book to every board member and that they will have meetings to discuss

PS: I have destroyed the returns on investments against the Magnificent 7 being invested in Bitcoin for the past 5-10 years

 

[orbit23]

In my mind all these valuations and calculations are meaningless within the current context.

What is the PE of Dogecoin or WIF? It doesn't matter.

It's a pure attention economy at this point. Valuation of most assets is based on the attention it manages to attract.

And pretty much everything is moving together anyways. Good conditions, everything goes up. Poor conditions? Everything goes down.

Just top of the cycle things...

 

[GlobalMacro90]

In my mind all these valuations and calculations are meaningless within the current context.

What is the PE of Dogecoin or WIF? It doesn't matter.

It's a pure attention economy at this point. Valuation of most assets is based on the attention it manages to attract.

And pretty much everything is moving together anyways. Good conditions, everything goes up. Poor conditions? Everything goes down.

Just top of the cycle things...

I do get the skepticism but I would just say be real with yourself you were saying the same thing about bitcoin at $5000 and at $10,000 and now it’s at $65,000 and you were still saying the same thing. Maybe you need to rethink.

 

[engineering]

Value stocks have not done very well past 5-10 years,

Only some. Buying VLO at 66 worked fantastic.

Value index returns aren't going to double the SPY, but IMO there is significantly less risk of loss.
Having stable value is nice because next time the market takes a 40% hit, you can buy in at a good price. Let prices recover and the rotate some money back to value again.

Your current hurdle rate is 5% with risk-free US Treasuries

I love 5% risk free treasuries. I can keep money off to the side and earn over 5% with a one month commitment.

You are storing your wealth

I see it less as "storing my wealth" and more as, using it to fund specific activities. People have this weird assed idea that wealthy people have a Scrooge McDuck style vault full of cash.
Especially Bitcoin folks seem to have this blind spot.*
Wealthy people mostly use their money to buy a stake in income producing activities.

Bitcoin is just ledger entries. There's no voting shares. There's no product, plant or equipment. You're just buying a ledger entry.
Yes, cherry picked returns on Bitcoin have been impressive, but so are the returns on winning lottery tickets. When you look at the lottery or at Bitcoin generally, you see that it never returns any more than what was put into it. If you're good at predicting the price you might be able to make money, similar to a professional sports better or poker player. In all those cases, for you to win someone else must lose.**

*Often I hear Bitcoiners talking about getting outside the fiat system, etc. They generally ignore the point that the real issue is excessive government spending and taxation. Money printing is just a piece of the puzzle. They pretend that as long as you assets aren't denominated in dollars you are safe. The real situation is, you must pay taxes regardless. In addition all that government spending competes with your own spending power for goods and services.

**Technically, that's slightly unfair to Bitcoin. Assuming that people use Bitcoin forever. It could theoretically grow at a long term rate of global GDP growth.

 

[johnarb]

Bitcoin is just ledger entries. There's no voting shares. There's no product, plant or equipment. You're just buying a ledger entry.

No worries, friend, peace and I hope you do well with your investments

 

[johnarb]

Microstrategy in a quiet period now

Exciting time for mstr next week (next Monday) earnings release, longs or shorts place your bets

• Will mstr announce a stock split and/or issuance of more shares to buy more bitcoins?
• Will mstr announce another debt offering to buy more bitcoins?
• No announcement price of mstr crash?
• bitcoin goes up by coincidence price of mstr shoots up?

 

[maxinger]

MSTR chart
It seems to form the 3rd mega peak.

It doesn't look bullish anymore.


What a great waste of energy;
climbed up the mountain,
then down, then
climbed up the mountain again,
then down, then
climbed up the mountain again,
then down.

Might as well don't move at all.
Anyway, that was good body exercise.


Who knows, in a few months, it will form the 4th mega peak.

How to trade multi peaks?

buy low
When the price goes very high,
hold on to the position for many years.
When the price goes down,
don't panic. HODL. Go do averaging.

When the price goes very high,
hold on to the position for many years.
When the price goes down,
don't panic. HODL. Go do averaging. etc

what a world.