Asset Strategy Drives Success

Michael Saylor argues that in the current macroeconomic environment, companies must evolve beyond traditional operating models to include significant asset holdings, particularly Bitcoin, to combat inflation and maintain value.

• The Current Economic Environment:

  • Federal Reserve and EU Central Bank buying $1 trillion in bonds annually
  • Multi-trillion dollar government deficits
  • Continued stimulus spending expected for next 4-8 years
  • Asset inflation running at approximately 15%

• Impact on Traditional Business Models:

  • Companies must generate 20%+ growth to maintain stock value
  • Bonds paying less than 15% are destroying value
  • Commercial real estate with sub-15% yield is losing value
  • Cash holdings lose 15% annually (negative real yield)

• Asset Performance in Current Environment:

  • Gold has -3% real yield (mining/hypothecation rate)
  • Sovereign debt has -12-13% real yield
  • Corporate debt has -10% real yield
  • Companies growing less than 15% have negative real yield

• Proposed Corporate Treasury Strategy:

  • Convert treasury reserves to Bitcoin
  • Sweep all cash flows into Bitcoin
  • Borrow against future cash flows in dollars, convert to Bitcoin
  • Finance fixed assets in dollars, convert to Bitcoin
  • Issue equity at highest possible valuations, invest in Bitcoin

• Why Bitcoin as the Solution:

  • "Apex property" - most scarce monetary asset
  • Cannot be diluted through creation of more units
  • Encrypted money with minimal risk of:
    • Property tax impairment
    • Execution issues
    • Money printing dilution
    • Counterparty risk
    • Corruption

• Business Strategy Implementation:

  • Must disclose risk to shareholders
  • Provide exit opportunities for disagreeing investors
  • Rotate shareholder base to align with new strategy
  • Cannot succeed in business without asset strategy in current environment