Videos & Podcasts Of The Week
A Quick Rant On Microstrategy, Some Thoughts On Current Events And Cabinet Picks & Three Other Podcasts Worth A Listen
If you have been paying any attention to financial markets in the last week, you probably would have noticed that Michael Saylor has been busy running his own version of the Hunt Brothers silver squeeze with bitcoin. MicroStrategy MSTR 0.00%↑ has gone parabolic with Bitcoin’s recent run after the election, and the opinions on the company issuing equity and convertibles to buy bitcoin ranges from “Saylor invented the magic money tree / infinite money glitch” to “this is clearly a Ponzi”, but it’s fascinating to see what is going on from a distance. People have talked about the stock trading at a premium to the underlying bitcoin, or that his prediction of 13,000,000 per bitcoin by 2045 puts bitcoin’s market cap at 273 Trillion (or well over 2x the world’s annual GDP today), but it looks like euphoria to me.
Bitcoin might play round number bingo with $100,000, but I wouldn’t be surprised if Microstrategy and Michael Saylor get rinsed at some point in the next 12 months. Saylor has been busy taking victory laps on various media appearances, and he has said some interesting things over the last couple weeks. My favorite part of one of his appearances was his thoughts on Buffett and how Charlie Munger (the same guy who called Bitcoin rat poison) would have liked it, but I digress.
They are destroying $3B a month in shareholder capital. They are generating a 3% after tax yield at best and the cost of capital is 15%. Take 12% negative real yield, $325B times 12% is what the shareholders are paying for that. If I had an hour alone with Buffett in a calm environment, I'd walk out and he'd say that this Bitcoin $BTC thing is a pretty good idea, Charlie would've liked it and we're going to buy some.
- Michael Saylor on the Patrick Bet David Podcast
Current Events & Cabinet Picks
So the biggest piece of geopolitical news was that the US is letting Ukraine use our missiles inside of Russia, which prompted the use of an intermediate range ballistic missile is response. I hope things don’t escalate, but when you have groups in the US (and the UK, who also authorized Storm Shadow missiles) that clearly seem to want an escalation, but it will be worth watching over the next couple months. The snap reaction I have seen multiple times is something along the lines of “Biden is trying to start WWIII before leaving office.” Everyone wants to talk about Biden, and I can’t be 100% certain, but I’m pretty confident that whoever is calling the shots right now in D.C. is not Biden.
The other thing that has been interesting to watch has been the Cabinet picks and other nominations. The podcast above is an interesting conversation (with a couple guys I have had on my podcast, along with other guests) on some of the recent developments with Matt Gaetz, what’s going in with the Cabinet, and other things going on here in the US. Some people are freaking out about different picks, but I want to see what actually happens in the first half of 2025 before jumping to any conclusions. It will be interesting to watch, but they talk about what the most important positions are and what they are keeping an eye on moving forward.
The Milkshakes Pod w/ Michael Every
This was one of the most interesting videos I have watched in the last couple weeks. Brent Johnson is notorious for his dollar milkshake theory, which is an interesting lens to view the world. This was a great video on the intersection of state craft and power politics with fiscal and monetary policy. They talk about how tariffs could be implemented without creating supply shock, with some form of delay timers. Every also covers why tariffs won’t crush the US and the reasons for manufacturing to return to the US, and the potential Capex boom associated with that move.
In short, demand here is big enough with our enormous consumer base for manufacturing to come home, and tax cuts and other incentives will lead to growth, and companies will want to bring back production to have exposure to US consumer. Europe, on the other hand, is in a pickle with a collapsing German government and Macron’s French government is also in an interesting spot. They also talk about how Trump might play hardball with Europe, and how he might try to put Iran back in a box (depending on Iran’s nuclear capability) by sanctioning oil sent to China or other actions. It’s also worth reading Every’s Rabobank note from a couple weeks ago if you have time.
In Good Company w/ Stan Druckenmiller
I have seen this video get shared around several times over the last couple weeks, but it’s worth a watch if you haven’t already seen it. They talk about Stan’s outlook for things, but also talk about several stories from the past. Right now, he’s worried about inflation coming back, but not worried about a recession. It was interesting to get his views on what is going on, but I found his big picture thoughts on investing and his stories from the past more valuable. Stan talked about being stubborn but being able to change his mind and not being afraid of concentration (he did say that if you’re going to concentrate, it’s better to have 5 different asset classes to play in). If he really believed something, the position could never be big enough.
He also talked about the importance of position sizing, batting average vs. slugging percentage (which I talked about a bit in a previous post), and why he tries to look ahead 18 months when looking at any investment. He also talked about the difference in the skill set of an analyst and a portfolio manager. The stories were also very interesting, from the notorious bet against the British pound, to the Swedish Kroner and the Thai Baht. He explained why he put 100% of the fund in the short the pound, long the Deutschmark, and why Soros wanted to ramp it up to 200% of the fund. He also recalls buying the top in the 2000 tech bubble and why he took a sabbatical after that. Because any good investing podcast wouldn’t be truly complete without mentioning AI, he also shared his thoughts on why machines won’t take the place of humans when it comes to investing, but they could be a useful copilot.
Sable Offshore Bonus: Value Hive Investor Letters
If you want a couple company specific ideas, the Value Hive investor letter audibles are always interesting. If you’re mostly interested in Sable Offshore SOC 0.00%↑, you can skip to the Greenhaven Road Capital section. The deep dive on Sable starts at roughly 32 minutes, but it’s worth a listen if you’re starting from scratch on the company.