MicroStrategy True North Episode 11 discusses Bitcoin dips, leverage strategies, and future catalysts for MSTR stock in simple terms for beginners.
Timestamp Overview
[00:00:52 - 00:03:15] Introduction to MicroStrategy True North
- Jeff Walton welcomes everyone to Episode 11, noting recent Bitcoin price drops and testing investor commitment.
- Jeff Walton explains MicroStrategy True North as an investment club for long-term MSTR holders sharing insights publicly.
- Jeff Walton passes to Tim Kotzman for a disclaimer that the discussion is not financial advice.
[00:03:15 - 00:04:09] Disclaimer and Excitement Despite Dips
- Tim Kotzman emphasizes the talk is not financial advice but shares enthusiasm for buying during dips.
- Tim Kotzman mentions Marathon’s recent Bitcoin purchase and excitement among the group.
- Tim Kotzman notes short-term traders may not fit, as the focus is long-term.
[00:04:09 - 00:06:35] Defining Irresponsibly Long and Recent Performance
- Ben Werkman jokes about Grain of Salt’s fast arrival.
- Jeff Walton defines “irresponsibly long” as holding MSTR forever, beyond typical timelines.
- Jeff Walton highlights MSTR’s stock doubling in six months from $146 to $349, urging a broader perspective.
[00:06:35 - 00:09:05] Agenda and Community Stats
- Jeff Walton outlines the agenda: catalysts, current events, $42B plan, leverage, FASB accounting, and bears.
- Jeff Walton shares community stats: 23,000 irresponsibly long members and nearly 4,000 in MSTR Den Discord.
- Jeff Walton mentions Discord chats for equity, options, and OG investors.
[00:09:05 - 00:13:25] Catalysts Overview
- Jeff Walton discusses December Fed rate cut as a catalyst, despite market drop.
- Jeff Walton explains QQQ inclusion effective December 23, meaning constant buying from index funds.
- Jeff Walton lists upcoming events like options expiration, inauguration, and FTX repayments.
[00:13:25 - 00:17:00] FASB Fair Value Accounting
- Tim Kotzman notes FASB mandatory for fiscal years after December 15, 2024.
- Jeff Walton explains FASB allows companies to show Bitcoin gains in earnings, potentially attracting more investors.
- Soleil Nitu clarifies MicroStrategy adopts FASB in Q1 2025, not Q4.
[00:17:00 - 00:21:36] Fiscal Year Clarification and MNAV Discussion
- Tim Kotzman explains most businesses use January-December fiscal years.
- Jeff Walton dismisses MNAV as irrelevant, focusing on Bitcoin per share as key metric.
- Jeff Walton notes MSTR traded above 2x MNAV most of the year, despite fluctuations.
[00:21:36 - 00:25:35] ATM Usage and Strategy
- Ben Werkman explains ATM sales are controlled, not market dumps, using time-weighted average pricing.
- Ben Werkman clarifies Sailor doesn’t opportunistically sell; it’s predefined to avoid manipulation.
- Soleil Nitu reminds that price drops increase Bitcoin per share.
[00:25:35 - 00:29:33] Accumulation Phase Benefits
- Ben Werkman describes current phase as building higher base value for shares.
- Ben Werkman notes NAV contraction is temporary during accumulation.
- Grain of Salt highlights 9x faster Bitcoin accumulation since Q3.
[00:29:33 - 00:32:18] Bloomberg Video and Market Panic
- Grain of Salt recommends Sailor’s Bloomberg video explaining TWAP and strategy.
- Adrian Morris calls current phase “coiling the spring,” urging calm amid new entrants’ panic.
- Ben Werkman stresses long-term value creation, not short-term trading.
[00:32:18 - 00:35:36] Performance Metrics and Bullishness
- Ben Werkman shares MSTR up 458% yearly, emphasizing success.
- Grain of Salt notes 410% year-to-date, 511% one-year returns.
- Jeff Walton highlights rapid $42B plan execution.
[00:35:36 - 00:40:09] Leverage and Capital Plan
- Jeff Walton explains dropping leverage ratio allows more debt capacity.
- Jeff Walton notes Fed cuts make borrowing cheaper.
- Soleil Nitu points out doubled Bitcoin holdings ease S&P inclusion.
[00:40:09 - 00:44:15] S&P Qualification and Video Takeaways
- Jeff Walton calculates small Bitcoin rise erases past negatives for S&P.
- Grain of Salt predicts larger future plans post-Republican wins.
- Jeff Walton shares remaining ATM balance at $7.7B.
[00:44:15 - 00:47:45] Bullish Catalysts Ahead
- Grain of Salt lists catalysts like QQQ, SAB 121 repeal, FIT21.
- Ben Werkman debunks reckless leverage claims, noting low 0.35 ratio.
- Grain of Salt envisions $240B next plan.
[00:47:45 - 00:52:11] Future Predictions and Leverage Myths
- Grain of Salt predicts half-trillion plan if S&P included.
- Ben Werkman explains MNAV expansion needs ongoing Bitcoin growth.
- Ben Werkman clarifies debt adds assets, keeping leverage low.
[00:52:11 - 00:56:45] Institutional Interest and Stock Splits
- Grain of Salt suggests enthusiastic investors for larger raises.
- Jeff Walton notes index inclusions provide constant bids.
- Grain of Salt discusses potential future splits at higher prices.
[00:56:45 - 01:00:00] Closing Bullish Thoughts
- Grain of Salt emphasizes rapid plan completion as bullish.
- Jeff Walton wraps 2024’s last episode.
- Group discusses blackout periods vaguely.
[01:00:00 - 01:05:00] NAV Projections and Thesis
- Jeff Walton updates NAV spreadsheet, projecting prices at higher Bitcoin values.
- Jeff Walton reaffirms Bitcoin as best asset, expecting appreciation.
- Ben Werkman discusses Allianz’s bond purchase benefits.
[01:05:00 - 01:10:00] Insurance and Bonds
- Jeff Walton explains insurance asset matching, Bitcoin bonds’ appeal.
- Ben Werkman notes bonds reduce short pressure.
- Jeff Walton pushes back on risk mismatch for insurers.
[01:10:00 - 01:15:00] Evolving Markets and Other Companies
- Ben Werkman sees tactics changing with scale.
- Jeff Walton envisions bundled Bitcoin products.
- Ben Werkman mentions Semler, MetaPlanet entries.
[01:15:00 - 01:20:00] Miner Strategies and Taxes
- Jeff Walton notes miner’s buyback, not Bitcoin.
- Ben Werkman clarifies tax delays to 2026.
- Jeff Walton discusses potential tax rollbacks.
[01:20:00 - 01:23:00] Bear Sightings
- Jeff Walton mocks bear posts on misinformation.
- Soleil Nitu adds koala imagery for weak bears.
- Ben Werkman appreciates persistent bears like Schiff.
[01:23:00 - 01:28:55] Real Estate vs. Bitcoin Debate
- Jeff Walton critiques Schiff’s real estate comparison.
- Ben Werkman notes real estate value from refinancing.
- Soleil Nitu questions housing appreciation logic.
[01:28:55 - 01:34:42] Final Thoughts and Close
- Jeff Walton bullish on cheaper capital.
- Ben Werkman expects Q1 movement to bonds.
- Soleil Nitu jokes on diversifying to two stocks.
Notable Quotes
Bitcoin Dips
Surprisingly equities and commodities aren't number go up every single day.
Jeff Walton @punterjeff
Irresponsibly Long
Irresponsibly long to me means I'm holding it forever, longer than anybody probably thinks that I should hold on to this thing in size and scale.
Jeff Walton @punterjeff
FASB Impact
This upgrade to accounting standards will facilitate the adoption of Bitcoin as a treasury reserve asset by corporations worldwide.
Tim Kotzman @TimKotzman
ATM Strategy
ATMs are very controlled instruments... the intent of ATF selling is not to move the market.
Ben Werkman @BenWerkman
Accumulation Phase
During this period, while he's using the ATM, he's taking that capital, he's buying Bitcoin, it's increasing your Bitcoin per share.
Ben Werkman @BenWerkman
Bullish Speed
He did the ATMs. He's hit the limit on the number of shares... he did three years in three months.
Grain of Salt @Z06Z07
Leverage Myths
The leverage ratio is 0.35. That is very, very low.
Ben Werkman @BenWerkman
Future Plans
The next one, if this is 42 billion, the next one's 420 billion.
Grain of Salt @Z06Z07
Insurance Adaptation
The industry itself needs to adapt... this is a way to consider adapting into the new environment.
Jeff Walton @punterjeff
Securitizing Bitcoin
They're securitizing Bitcoin, and there's a lot of different ways to approach securitizing Bitcoin with these product offerings.
Ben Werkman @BenWerkman
Real Estate Critique
You hope the rents do [exceed expenses].
Jeff Walton @punterjeff
Long-Term Hold
The biggest bear move I can imagine... would be like eliminating all margin and leverage... and just going straight to straight shares.
Soleil Nitu @nithusezni
Questions & Answers
Question 1: What is MicroStrategy True North?
Answer: Jeff Walton describes MicroStrategy True North as an investment club for long-term MSTR holders sharing public insights on the trade’s nuances.
Question 2: Why is the group excited during Bitcoin dips?
Answer: Tim Kotzman explains the group sees dips as buying opportunities, with examples like Marathon’s purchase, focusing on long-term excitement.
Question 3: What does “irresponsibly long” mean?
Answer: Jeff Walton defines it as holding MSTR forever, viewing it as a long-term position beyond typical horizons.
Question 4: What is FASB fair value accounting?
Answer: Tim Kotzman and Jeff Walton explain FASB allows showing Bitcoin gains in earnings, mandatory post-December 15, 2024, aiding corporate adoption.
Question 5: Why doesn’t MNAV matter?
Answer: Jeff Walton states MNAV isn’t a key metric; the focus is Bitcoin per share, with Saylor prioritizing Bitcoin accumulation.
Question 6: How do ATMs work?
Answer: Ben Werkman clarifies ATMs use controlled, time-weighted sales to avoid market impact, not opportunistic dumps.
Question 7: What is the $42B capital plan?
Answer: Jeff Walton and Grain of Salt describe it as raising $42B for Bitcoin, executed faster than planned, leading to future larger plans.
Question 8: Is MicroStrategy overleveraged?
Answer: Ben Werkman debunks this, noting a low 0.35 leverage ratio, with debt matched by Bitcoin assets.
Question 9: Why buy convertible bonds?
Answer: Jeff Walton and Ben Werkman explain bonds give Bitcoin exposure with credit in capital models, appealing to insurers like Allianz.
Question 10: How does real estate compare to Bitcoin?
Answer: Jeff Walton and Ben Werkman argue Bitcoin lacks maintenance costs, countering Schiff’s rent-based critique.
People and Organizations Mentioned
- Jeff Walton: Host of MicroStrategy True North, long-term MSTR holder sharing insights; associated with insurance and Bitcoin advocacy on X.
- Tim Kotzman: Speaker providing disclaimers and FASB details; known for Bitcoin enthusiasm on X.
- Ben Werkman: Discusses ATM, leverage, and strategy; insurance background, active in MSTR community on X.
- Soleil Nitu: Comments on Bitcoin per share and long-term holding; part of irresponsibly long group on X.
- Grain of Salt: Shares bullish predictions and metrics; car enthusiast and MSTR analyst on X.
- Adrian Morris: Talks market panic and quantum; tech-focused MSTR advocate on X.
- Michael Saylor: MicroStrategy CEO, referenced for strategy and videos; founder of MicroStrategy, prominent Bitcoin proponent.
- Marathon: Mentioned for Bitcoin purchase during dip; Marathon Digital Holdings, a Bitcoin mining company.
- Adam Back: Commented on FASB tweet; CEO of Blockstream, cypherpunk involved in Bitcoin development.
- Allianz: Bought MSTR bonds; global insurance giant with over $1T AUM, based in Germany.
- Fed (Federal Reserve): Discussed rate cuts; U.S. central bank managing monetary policy.
- QQQ: ETF including MSTR; Invesco QQQ Trust tracking Nasdaq-100.
- MSCI: Index review mentioned; provider of global equity indexes.
- FTX: Repayments noted; defunct crypto exchange, bankruptcy proceedings ongoing.
- Berkshire Hathaway: Compared for insurance; Warren Buffett’s conglomerate.
- Coca-Cola: Leverage comparison; multinational beverage company.
- Semler: Potential Bitcoin playbook; Semler Scientific, healthcare firm holding Bitcoin.
- MetaPlanet: U.S. listing; Japanese firm adopting Bitcoin treasury.
- CleanSpark: Issued bonds for buyback; Bitcoin mining company.
- Peter Schiff: Bear critic; gold advocate, CEO of Euro Pacific Capital.
- Joseph Carlson: Bear poster; financial YouTuber focused on value investing.
- Alex K.: Misinformation thread; likely a financial commentator on X.
- Flow Side: Negative poster; crypto skeptic on X.
- Samantha LaDuke: Blocked responders; financial analyst critical of MSTR.