Thanks James for setting my Sunday on the right foot yet again.
Regarding the what I’m watching…
I am aligned that with the time horizons of my investment theses.
Bitcoin: just continuing to study it as a philosophy and as an unfolding archetype of long term adoption and a unique financial expression of a natural power law.
Always open to opportunistic stacking like I did with a longer term standing order at $60k that was triggered.
Longer term thematic positions: continuing to study thesis advancement and viability.
I add to these through opportunistic short puts that add cash and/or lower basis continuously and provide a form of dollar cost averaging.
Pure Premium Harvesting:
Opportunistic put selling (sometimes call selling) based on a risk model I’ve been continuing to refine for many years that has resulted in over 96% of in un- assignment (strategically close or let expire).
Early stage investing: Meeting with founders and evaluating opportunistic investments into private companies in areas I have specific subject matter expertise. Very picky here.
Irresponsible investing:
Some qualitative investing and trading shorter term Bitcoin and Circle speculation based on longer term thesis.
For example, selling a lot of MSTR puts diversified by strike, expiration and volatility.
Interesting read! While aware of the “playbook” of borrow, spend, never sell, how do they actually service their debt? A cash-flowing Rockefeller is obvious, but Elon or Saylor borrowing against his personal BTC stack?
Do they let the interest get added back to principal at YE, and simply refi against the current (higher) asset value?
I know you can’t comment on how specific individuals do this, just curious about the typical options.
This is definitely one way they do it. As long as the asset you borrow from appreciates at a faster rate than the cost of the loan, then you are never actually selling any of the underlying asset. Helpful if the loan is longer term to overcome any asset mark to market volatility.
Also, if you do have cash generating businesses elsewhere but want access to significant capital for an asset purchase, then you borrow the large chunk of cash from the large illiquid asset and the cash needed to service that borrowing is manageable with your other activities.
My friends and family understand this, but they can’t understand holding bitcoin because it has no “cash flow”.
I usually just compare and contrast with gold and explain how it is the “digital form of gold”. This seems to trigger quite a bit of understanding.
Thanks James for setting my Sunday on the right foot yet again.
Regarding the what I’m watching…
I am aligned that with the time horizons of my investment theses.
Bitcoin: just continuing to study it as a philosophy and as an unfolding archetype of long term adoption and a unique financial expression of a natural power law.
Always open to opportunistic stacking like I did with a longer term standing order at $60k that was triggered.
Longer term thematic positions: continuing to study thesis advancement and viability.
I add to these through opportunistic short puts that add cash and/or lower basis continuously and provide a form of dollar cost averaging.
Pure Premium Harvesting:
Opportunistic put selling (sometimes call selling) based on a risk model I’ve been continuing to refine for many years that has resulted in over 96% of in un- assignment (strategically close or let expire).
Early stage investing: Meeting with founders and evaluating opportunistic investments into private companies in areas I have specific subject matter expertise. Very picky here.
Irresponsible investing:
Some qualitative investing and trading shorter term Bitcoin and Circle speculation based on longer term thesis.
For example, selling a lot of MSTR puts diversified by strike, expiration and volatility.
You asked.
-Dan
Thank you Dan and interesting approach. Not too different from a hedge fund style. Thanks for sharing!
Interesting read! While aware of the “playbook” of borrow, spend, never sell, how do they actually service their debt? A cash-flowing Rockefeller is obvious, but Elon or Saylor borrowing against his personal BTC stack?
Do they let the interest get added back to principal at YE, and simply refi against the current (higher) asset value?
I know you can’t comment on how specific individuals do this, just curious about the typical options.
Can always borrow more to service the debt. Also, as the underlying assets appreciate, the loan to value lowers and easier to borrow.
Essentially, can just keep tapping the appreciation of the collateral.
Just my assumption.
But that’s the right question.
This is definitely one way they do it. As long as the asset you borrow from appreciates at a faster rate than the cost of the loan, then you are never actually selling any of the underlying asset. Helpful if the loan is longer term to overcome any asset mark to market volatility.
Also, if you do have cash generating businesses elsewhere but want access to significant capital for an asset purchase, then you borrow the large chunk of cash from the large illiquid asset and the cash needed to service that borrowing is manageable with your other activities.
James, I'm curious why you didn't compare their wealth measured in gold?
* $1 billion in 1919 bought about 48.4 million ounces of gold.
* $1 trillion in 2026 buys about 237 million ounces of gold.
Great point and interesting. Though I may want to use a period-based average of gold price, as it has seen quite a bit of volatility on both ends!