3 Stories of Crazy Geniuses: Fenn’s Treasure, Michael Saylor’s Infinite Money Glitch + more

So I think the theme of this episode is rich guys, crazy or genius. We've got the Bitcoin guy who's doing the treasure hunt and he's either crazy or he is a genius, right? Is he crazy or is he awesome? Ralph Lauren, crazy or genius? Looks like he came down on the side of genius. I have another one for you. Dude, have you heard about this guy who's doing the $2 million treasure hunt?

No, I have no idea what you're talking about.

Okay, well, can I interest you in a treasure hunt story?

Yeah, $2 million, that sounds good to me.

There's this guy named John Collins Black, and there's not a lot of info about this guy, but he has basically hidden somewhere between $2 and $3 million across America right now in different treasure chests. So he's got 5 treasure chests out there, Each with a bunch of treasure inside. And this specifically, it's not just like cash, it's things that are valuable. So he spent the last 5 years buying valuable kind of artifacts. So one of them has, you know, rare Pokémon cards, a 2002 holographic Charizard card. He's got one with George Washington's jelly glass that he bought out of an auction. There's things from, from old shipwrecks. And in total, the stuff is worth $2 to $3 million. He split it between 5 treasure chest, and he's hidden it in physical locations across America. And then he released a book that's called— there's a treasure or something like that.

I buried a treasure. There's a treasure inside.

And it's basically just clues to find his treasure. And so there's maps and clues, and you can buy this book right now and go find this treasure.

Dude, wait, hold on. It's even funnier. It's on Amazon. It's a book on Amazon called There's a Treasure Inside. And the book is $35. So he's going to recoup a little bit of his money.

A little bit of it, a little bit of it, but probably not as much. So he's got like, you know, a hidden, a Colombian green emerald and all kinds of stuff inside. And I find this kind of fascinating. So this guy's story is interesting. He was like a musician in LA that didn't really work out. And then he was like, okay, he started creating websites for helping people find jobs and that started going good. He used that to buy Bitcoin earlier. Early-ish on. I guess the story is he's a Bitcoin multimillionaire who was also fascinated by adventure. And so there's this thing called the Fenn treasure. Have you ever heard of this?

Okay. Yeah. Fenn treasure. It's a cache of gold and jewels that Forrest Fenn, an art dealer, hid in the Rocky Mountains. Yes, I actually do think I've heard of this. I believe Zach Crockett, Zachary Crockett, who used to work for me at The Hustle, wrote a big article where he spent a week trying to find this treasure.

How did he do?

I don't think anyone has found it.

So, so 5 people died trying to find this treasure because he, it was like, is it up in the mountains? Whatever. So they're climbing. So 5 confirmed deaths chasing the treasure. Then he announces somebody found it. I think this was in 2020-ish, 2022. He says that, um, Somebody found it and then he dies months later. It was revealed that former journalist and medical student Jack Stoof found it and then he auctioned it off for a total of $1.3 million of what he found. And so this guy, John, or whatever, Collins Black was searching for that in 2020. And so he was like, during COVID he had searched for the treasure. He thought this was really cool. When he, when we were all in lockdown, he decided I'm going to do one of two things. He either was like going to create a children's book publisher or create a treasure hunt. He did both. And so he created this, he started accumulating assets for this treasure hunt.

I have a friend named Chip Forsyth. Chip Forsyth is a crazy person. I've been friends with him for 10 years. His brother is AJ Forsyth, who started iCracked, if you remember iCracked.

Yeah.

And Chip will go out, he's friends with these guys who raise funding to go find shipwrecks that they think have— well, I guess some of them are valuable just because they're shipwrecks, but some of them are valuable because they were like ships that had gold or other valuable stuff in the ship. And they raise money to go out and find these shipwrecks. And he tells me all about it. And it's like the type of story where the people who are into this, it's the only drug that fills that need. Do you know what I mean?

Yes.

Like it's, it's like a, it, it, it is an intoxicating thing to find this.

Like it's romantic. There's a romantic idea about a treasure hunt, right?

Yeah. Like it's awesome. And so like, I understand why it's not my obsession, but I understand why it is other people's obsession.

The other thing that I think is interesting is choosing to release a book for this. I feel like there's a missed opportunity. I feel like he should have done something with TikTok or social media where I feel like there was a more viral way to release the clues. To let people unlock the clues or search for this thing together.

Like a weekly or monthly announcement. Yeah.

You know, I don't know if you've seen, there's these things that go really, really viral on TikTok. It'll be like some woman say, telling this 39-part story of how her husband cheated on her. And these things just amass, it's like a true crime. They amass like tens of millions of followers that are trying to just follow them. They wait for that next piece of the story to drop. And I do think that there was probably a way to do this that something somebody could do, which would be to let, do a bit of a treasure hunt, but use social media, use TikTok as a way to uncover the clues as they go. And then people go in the real world using those clues rather than a book. Steve Bartlett, who's the podcast host of, what's it called? Diary of a CEO. Before that, he had an ad agency or whatever. Before that, he worked for me back when he was maybe 19, 20 years old, 21 years old, something like that. He was just like a young guy that we had that was like a growth marketer and his job was to come up with great growth ideas. One of the things that he did at the time that I remember was he grew his Twitter and Instagram accounts like crazy by doing a very simple thing. He was doing these like cash drops where he'd put just $200 in an envelope and he would say at a college town, I think it was, he'd be like, we've dropped it here. He would post a video of him hiding it and then there would be videos of people going and trying to search for it. And they'd be basically, they would tweet where they hid it, um, in some way. And then they would tweet people going and finding them. But I don't remember if it was him that did this or somebody else that was doing this. I'm going to start doing that. It was a great idea. And it was like $200. It wasn't even that much money that they were doing. And they were doing these mystery cash drops as a way to just generate hype. But the genius of it was the content that they created kind of before the drop and then after the drop of people searching. It made it feel like a big deal. And then they would do the next one and the next one. I think it was just an account called like Mystery Cash Drop that was doing this, that was working, that's getting really big. This was like 10 years ago. So I'm trying to remember.

The guy who ran that account messaged me. He listens to the pod. Like, it's— you never heard of this guy, Mystery Cash Drop?

Uh, he messaged me. This was before we even started the podcast. This is a long time ago.

No, but he still does it.

Like, oh yeah, it was @HiddenCash. I think that was the—

HiddenCash. One of these guys just messaged us. You don't remember this? And, uh, for some reason it came into our world where I forget what happened. Someone tagged us on his Twitter thing and he was like, I love those guys. And then he DM'd me and just said, hey, something like that.

So maybe I got this wrong. Maybe Steve wasn't the guy doing it. Maybe Steve showed me this and we were going to like copy the strategy. I don't remember the link. Steve definitely put me onto this because it was happening both in San Francisco and also in the UK. The account now is suspended for hidden cash, which I remember happened back then. It got suspended. I'm not 100% sure, but why? But let me just read this article. This was back in 2014. So this is literally 10 years ago. It says an anonymous benefactor has been leaving cash hidden across San Francisco, inviting strangers to find it via a series of clues. They left money under chairs in public parks and stairways or in public bathrooms. And they basically post a picture of them holding the cash and then like a zoomed in thing of where they put it. Like, it's like under a toilet, but you don't know which toilet. And then they They, their quote was, I've made millions of dollars the last few years, more than I could ever imagine. And yet many friends of mine cannot afford to buy a home in the Bay Area. This has caused me quite a bit of reflection, and I'm determined to give away some of the money I make to charity and, and to do fun creative things like this. And that, uh, he or she will leave it once or twice a week. Did somebody should just do this again? This was 10 years ago. It would work today.

I think this is awesome. Uh, I think I'm gonna start doing this. The, the other day, the other day, like a hobby.

It's like, uh, running.

We just were jogging.

We're talking about like, I think I'll, I think I'll pick up this hobby.

It's like I want to play real life Willy Wonka. Like, I just want to, like, start control— I just want to, like, start controlling people's lives $100 at a time and just seeing, like, if I can, like, make all the monkeys dance. That's kind of like what this is. It's like you just, like, want to be a puppeteer $100 at a time a little bit. But it is, like, kind of fun. Hey guys. So a huge part of the growth of this podcast is thanks to our presence on YouTube. And without YouTube, I don't think we'd be as big as we are now. And it's all because of you guys for watching. We see you in the comments, even the negative ones. It definitely bothers me, but I read all of them and we see how powerful this platform is for growing an audience. Well, if you're planning for the next year and you're thinking about investing in a YouTube strategy for your business, then you have to check out this new guide from HubSpot. It covers everything you need. So building a content strategy, it covers understanding the YouTube algorithm and how to leverage SEO tactics. and then it also talks about the different content types and examples to create engaging content. So don't miss out, grab the guide and set yourself up for success next year. Now let's get back to the episode.

I think one of the problems is like you get that initial hit of like excitement and attention and everyone loves it, and then it's gonna fade away and then you're gonna keep hiding the cash, but you're not gonna get that same hit. So you're gonna have to, it's like an addict, you have to do more in order to get the, so then you're like, Hmm, you know, it'd be a shame if somebody got hurt finding it, but that would make for a whole nother news cycle around this. And then you sort of, you just keep escalating the prizes and the danger.

And it becomes weird after a while. It's like, hey, Willy Wonka, why do you have a chocolate river and invite children over all the time? Like, this is just dangerous. Do you know what I mean? Like, at some point it's going to be like, hey, could you, can we go out to dinner and you not like hide $200 while we're walking into the restaurant?

The funny thing is we're so old that like everybody who's listening to this that's like under the age of 25 is like, yeah, you know, this is how every YouTuber, you know, tries to get famous is doing this exact same thing.

Yeah. They're like, uh, what are you going to do next? Go give like a homeless guy $100 and film yourself, like giving him a haircut like that.

Exactly. I think maybe the takeaway is, uh, you know, what's old is new, uh, for some of these things, like the, what the Hidden Cashes guy was doing. It's not really all that different than what MrBeast does and, uh, has done to great effect.

All right. Can I tell you a story about a different way to look at adventure? About someone who's like, I've obsessed over a little bit. And I think, you know, this person, you know of them. And I think I'll, I'll tell you a few facts that kind of like shock you, but also I think you're gonna be into this person more than before. So the story is about a guy named Ralph Lifshitz. He was a Jewish kid from New York City, grew up, I believe in the '30s. And the story is basically that he wanted to be an actor. He grew up poor, but he loved like seeing all these movie stars on TV. And he was like, you know, I love that you can dress up and pretend to be another person. And if you pretend hard enough, people kind of start treating you seriously and start treating you like that person. And I love that. I love that. And I also love the idea that you can write a story and make it a movie, and I can live my life through that lens, that, that the lens of that movie. And it gives me hope. So he was like intoxicated by this, but he sucks at acting. And so he's like, I can't go to Hollywood. I can't become an actor. However, what I can do is I can shape these movies and direct these movies, not with a camera, but with clothing. And so he gets super into clothing.

What kind of leap of faith was that? I can shape these movies, not through writing or acting, but through clothing?

Yeah.

So it's a pretty ridiculous statement.

No, it's not. I'll give you an example. So he was like, he's got this quote where he was like, I love how, like, these actors, like, I, like, you could dress up as, like, a military person and you kind of feel a little bit tougher sometimes. Or I could dress up like a farmer and, like, I actually want to go outside and, like, get dirty a little bit. I could dress up like a cowboy and I want to go and, like, do cowboy shit. Like, if you dress up with a suit, people kind of take you seriously. And I think that's cool that you can, like, pretend, but it kind of, like, what's the difference between pretending and reality if you do it long enough? Like, it kind of becomes, like, the same thing. And so he was like, I can't really act, but like, I can dress up like these characters and I kind of a little bit start actually feeling like these characters. And eventually Ralph Lipschitz, he got made fun of a lot because his name, even like the Jewish kids were like, dude, your name has the word shit in it. Like, that's like, like you dork. And so he changed his name to Ralph Lauren. And so he starts, that is Ralph Lauren, the clothing company. He starts selling clothes for Brooks Brothers, like in their store. And then eventually at the age of 28, he starts his own business and he's like, my first thing that I'm going to sell is ties. He likes ties and he goes and he pitches something like Bloomingdale's and he's like, hey, can you guys sell my ties? And the guy's like, these are great ties. I would love to sell them, but it has this name Ralph Lauren on the back of the tie. Like no one wants that shit, dude. Like no one knows who you are. I don't give a shit about Ralph Lauren. You gotta take that off there. And he had, it's kind of a Sylvester Stallone moment where he was like, look, I'm a nobody, but I need my name to be on these ties. Like, this is just a deal breaker. And Bloomingdale's was like, all right, well, no, we're not going to do this deal. And so eventually he keeps on hustling and he gets his ties into like Macy's or something like that. In the first year of business, he does like half a million dollars in revenue, which is a home run. Uh, he did this in the '60s. That's the equivalent of like $3.5 million today. Home run. After year 3 or 4, he starts coming up with different ideas and he comes up with this idea of Polo. So the Polo brand, the college shirt that you see everywhere, and he parlayed—

by the way, what's, what's the backstory of that? What was his inspo? Do you know for the Polo shirt?

Like the inspo was basically, like I said, he grew up as this poor Jewish kid in New York, but what he loved was this idea of like class and old money. Uh, this idea of like WASP, even though he's not a WASP, he like loved the idea of like sophistication. And to him, the sport of polo, that like screamed like both utility because it's a sport, but also like sophistication because it's like supposed to be like rich people who play it. And the collar that polo players wear, they would always wear a collar and in particular they would button down the collar. So an Oxford button-down cloth shirt, that comes from the sport of polo. And so do like certain style boots, certain style pants. And so there was a little bit where it was like already considered like a fashionable sport. And so he says like, I'm going to name my brand Polo. And so he builds Polo and this shit over like the course of a handful of years, it takes off. So now Ralph Lauren, he's worth something like $10 billion. He still owns, I think, 80% of the company and he's a great businessman, but that's not what I actually am impressed by him. What I'm impressed by him is two things. The first, he has this idea of like, you are the director of your own life and your life is basically a movie. And he has this idea where he was like, I would wear clothes that would— I almost, I think Tony Robbins said this, or you told me that Tony Robbins said this, where he was like, if I want to act tough or confident, I make my body tough or confident. So what do you call that thing where you like, like flex your power posing, where you like flex your chest when you're not feeling comfortable. And you put your body into like a confident position and your brain kind of follows your body. He sort of is saying the same thing, but with clothing where he was like, you know, if I wanted to feel a little bit more sophisticated than I actually felt at the moment, I would dress a certain way and like my brain would follow. And I find that to be like a really cool idea. And the second thing that he did that was really interesting is I don't know if you remember this because we were kids. But do you remember Ralph Lauren advertisements? Do you remember any of those, like the photos in magazines?

No. What was it?

What was interesting is that what he would do is he would, he had, he used a lot of the same models and the models oftentimes were not professional models, but what he would do is if he wanted to, like, he would set the stage. So basically he would act like he's filming an entire movie. And so they would rent a home in the Hamptons. Let's say it's like a the ad is for some type of summer, summer wear for the beach. He would rent a Hamptons house and he would be like, well, if I'm a, like a wealthy family in the Hamptons who has this like beautiful home, like how, what would you guys be doing right now? Like maybe you'd be playing football. Maybe you'd all be sitting on, in the parent's bed in the morning as if like the kids just like woke you up. But he would create these like elaborate sets where he would like make you live like you are in a movie on set. And so he is like, we're gonna all like pretend that this is like real. And they would do this whole elaborate thing just for a handful of photos. But if you look at a lot of the ads, they're really like in-depth. And it made me start thinking a lot about like with startups and what you and I do. We sometimes are just reactive to like, to like whatever, like customers are saying, not more so like, how do we set the stage for what, what do we want the world to be? And I think Amazon used to do this small thing where they're like, before we launch any product, I want you to write the press release. Like, tell me, what do you want a customer to feel about this? Or how do you want this to be described when it's all said and done?

Right.

And because the internet has such a low barrier to entry and it's really easy to adapt and change things, rarely do we sort of think ahead and like, this is like my vision for the world. And at least everyone in my small world, how I want them to feel, how I want my customers to think, how I want them to appreciate us.

I do think there's something cool about— I'm looking up old vintage Ralph Lauren ads, and I see what you're saying, which is like a really heavy lean into like, yeah, like true lifestyle shoots rather than studio or sort of framed, um, you know, just like, let's go here, let's get the single shot, you in front of the water, boom. Yeah, that's churn and burn. It's like, well, this is somebody's house in the Hamptons wearing these clothes, doing what they do with all of the little, you know, family photos in the background and whatnot. Like it's, it looks a lot more authentic. And this is one of those things that's interesting because as a business person, it never pencils out on a spreadsheet to do this, right? Like up, upfront, there is no way to sit here and justify this, but then there's things in your gut and there's the, the, the people who do, who actually do make the bet and do pull it off. And then in retrospect, it sounds obvious. You know, I'll give you an example. There was a brand, e-commerce brand, and they were talking about influencers. It was like, well, what's the— what's— they're talking about an influencer campaign. They were going to spend $1 million on an influencer campaign with these Instagram moms. And I said, what's the return on ad spend of that? You put $1 million in, how much are you going to get back directly? And they're like, uh, it might be, you know, 50%, meaning we might put a dollar in, might get 50 cents back.

Uh, that's not the way to do it.

What's your Facebook— what's your Facebook ads return on ad spend? And they're like, uh, it's like, you know, $1.40. Put a dollar in, get $1.40 out. Why are you spending $1 million on these influencers? And are you able to measure the halo effect? I'm like using all this jargon. And he goes, hey, does your wife, like, does she follow like any of these people? And I show my wife and she's like, yeah, all of these people. He goes, ask them like a couple of questions about these people. Like, hey, do you know like how many kids they have? What's their names? What products do they use? What's the last product you bought that you heard them mention? And like my wife could just rattle these from memory. My wife's memory is like, I could, you know, we watched all of Game of Thrones. If I asked her today, what's a Lannister? She'd have no idea. She thinks it's part of a staircase. And so I'm like, she knows exactly what's going on with these influencers. And he goes, that's why we're spending $1 million with influencers. And, um, I was like, okay, you know, there's these things that if the result is not easy to measure, but it is true, right? It's got to be both. It's got to be actually, actually work. And not be easy to measure, those things are usually pretty mispriced, meaning that not as many people are willing to do them because most of us want the safety and comfort of things that are proven, measurable, and I can spreadsheet my way to conviction.

Well, it's basically all rooted in, can I justify this if I'm about to get fired? Yeah.

Or just even my own self-doubt, right? Even at like my companies, I'm not always thinking I'm going to get fired. Who's going to fire me? I own the company, but I don't want to be an idiot and I don't want to lose it. I don't want to fail and I don't want to lose money. And it takes courage to make bets. And courage is easier when you can put, when you, when the logic, when you can logic your way there, when you can spreadsheet your way there. Do you do any of these courageous bets that are non-spreadsheet? Because I think you, I think part of the reason you idolize these is that you didn't typically do that.

I didn't typically do that and I still struggle with it, but I have to, like, when I watch some of these things, like, uh, we talked about Martha Stewart recently, and now we're talking about Ralph Lauren. Like, when you talk, like, and when you talk about some of these, like, culture-changing brands or companies or people, are us internet or startup-y people, there's like, we think we are above the fold where we're like logical and we are like, well, it's easy. You put this much money in, you get this much money out. Like, why would anyone do anything otherwise? But then there's one step above that, which is It's the right thing because it's the right thing. Like, right. You know what I mean? Like, it's like, it's, um, like, uh, you know, I can't measure this thing, but like, I know it's awesome.

Right. Do it because it's awesome.

Yeah. And so there's like, we try to act like we are some like savant internet nerds where it's like the math says X, Y, and Z, but there's always, there's one above that, which is, yeah, but it's, it just makes sense. And so, and Peter Thiel, who's like the savantiest of savants. Has said like, there's this fifth tentpole of this equation, which is called brand. And he goes, I don't understand brand though. Uh, but like, I know it exists, but I don't understand it. And that's what we're talking about here, which is like, it just feels right.

Yeah. Yeah, exactly.

So, so long story short, I don't do this, but I respect it and I know that it's necessary and I want to do more of it.

Are you doing any of it with Hampton? Like, is there one you could think of that you do?

Yeah. Like we have, we own this podcast called Moneywise and like it, like the only way that we think that it returns an ROI is if someone joins and they said they heard about it through us. But that's the, that's like the low end of the totem pole of like, is it easily trackable? Right. Um, but then no, no, like I don't do enough, but I do need to do certain things like this. The, the, the problem with this is you get caught in the day to day and you also get caught in the bills. And there's also a lot of stories of Ralph Lauren where like he almost lost the company many, many, many times. Where he like just didn't pay attention. And in one hand, you need a visionary who doesn't pay attention to the profit because sometimes the shit that makes the most profit doesn't make sense right off the bat.

Right. So I think the theme of this episode is rich guys, crazy or genius. We've got the Bitcoin guy who's doing the treasure hunt and he's either crazy or he is a genius, right? Is he crazy or is he awesome? Ralph Lauren, Crazy or genius? Looks like he came down on the side of genius. I have another one for you.

All right.

And it's Michael Saylor. Have you seen what Michael Saylor is currently doing with the market and Bitcoin and his stock?

I don't understand it exactly, but I understand that he's always up to something. Like, like I, I always, I know that he's like the Barry Bonds of business where like there's always an asterisk next to everything he does.

Yeah, that's a good explanation. Okay, so can I explain what's going on? MicroStrategy is a software company. They sell software, you know, at the time they're selling software products and the software business might make like $75 million a year of profit. It was like a small cap stock.

It had been doing great for like ever. Like it was a great, like he'd been rich for a long time, right?

Yeah. The business had been, he, I think he's the longest tenured CEO of a public company.

Yeah.

Meaning he's been the CEO of this company for like 24+ years or something like that. And, but the stock had been flat. If you look, if you just zoom out on the chart, it looks like a very flat line. And when he came on the podcast, it was because at the time he was doing something very interesting. He had taken his company's cash reserves, like their treasury, which normally you either keep in cash, maybe treasury bills. Or you use it to buy back the stock. And instead, he used it to buy Bitcoin.

So basically, MicroStrategy was a software company. The software company had hundreds of millions of dollars in their bank account, which they're supposed to just hold in case they need it. And his plan was, I'm going to invest that money in Bitcoin.

Yeah, we're going to switch our treasury strategy to being Bitcoin. So September 14th, 2020, Bitcoin's priced at $10,000 a coin, and he buys $175 million worth of it, and then a month later or so he buys another $250 million of it.

Which, looking back at it, that sounds great.

Yeah, at $10,000, $11,000 a coin. And he has since been buying, uh, more and more Bitcoin. He now holds $37 billion of Bitcoin.

MicroStrategy.

MicroStrategy does. He himself also, I think, personally owns like hundreds of millions, if not a billion dollars of Bitcoin.

Wow.

They are up $15 billion on their Bitcoin position. In 4 years. So he's generated $15 billion of value doing this strategy. So it starts out by saying, I'm going to convert my, you know, step 1, convert our company's idle cash into Bitcoin. Okay, did that. But now the company doesn't generate— and the idea was every year when we generate more free cash flow, we're going to do the same. We're going to, you know, we make $75 million, we're going to buy more. But over time, he starts doing more aggressive bets. So what he starts doing is he starts issuing these convertible bonds. And now, so he goes to the market, he says, hey, Uh, here's a corporate bond. You can buy the bond. We're going to take the proceeds from the bond sale and we're going to go buy Bitcoin. And he does that over and over and over again. And on top of that, if you look at MicroStrategy stock today, so when he was last on the podcast, well, let's just actually say this.

In March of '20, the stock was $10. In March of '21, the stock was $78, and today it's $410.

Correct. And it is. So it's up in the last 5 years by 2,600%. Okay. So it's shot up. It's, uh, if you compare it to even Nvidia stock this year, it's outperformed Nvidia, which is pretty insane. And so what is going on here? Um, this, you know, his company is now worth $80 billion as of, you know, as of today.

And how much revenue and profit does the actual business.

The actual software business is declining 10% a year and is something like a couple hundred million in revenue and under $100 million of net income. So it is a rounding error. It is not— it is no longer relevant to the stock price.

And does he have employees who like work there?

Yeah, they still have employees that just keep running that software business, but the stated strategy is our job is to acquire Bitcoin in the most effective ways possible and hold forever. That's what he wants to do.

That's an influence. That's an inspiring talk every Friday at your all-hands, right? Bitcoin price is up.

Great job, everybody. We did our job. And to his credit, he's been buying throughout all the dips. Bitcoin price went up to $60,000, then it goes down to $16,000. And even during that process, you know, Bitcoin in December 2022, Bitcoin price is $17,000. He buys another $50 million. He buys another $14 million, buys another $150 million. He has continued to buy throughout the whole process. And Bitcoin's at an all-time high. And, uh, as of today, he just bought another $5.4 billion of Bitcoin at the, uh, you know, sort of all-time high price.

How did he have the money to do that?

Again, he's raising money in these bonds. And so there's here. Okay. So what's interesting about this? Here's what I want to talk about is genius or crazy. I guess I hesitated to even bring this up because A, this is outside of my zone of competence, meaning like I don't know corporate bond strategies. I don't know why. Uh, I don't know how options traders look at this. I don't know what the bond market is like. That is not something that I've spent 20 years of my career in. I'm a startup guy. Okay. So on one hand, unqualified to talk about this. On the other hand, I've been a crypto holder and believer since far before Michael Saylor and have seen throughout each cycle how new players come in with new strategies and build massive profiles and success on the upswing. And I've seen things go very, very badly. Last cycle, there was Sam Bankman-Fried with FTX, there was Do Kwon, there was Three Arrows Capital. There were several people that for a moment in time looked like absolute geniuses. They were hailed by everybody. They were on the COVID of magazines, you know, Sequoia's investing in, in FTX, and everything looks incredible. And, uh, then it all comes crashing down, either due to bad acting or bad risk management.

I don't know anything about crypto, and I can give you an example of a red flag that was on air on our podcast. So I don't remember exactly, I think it was 30 or 45 minutes in, I asked him a question. I go, so Michael, you're buying all this Bitcoin with your company's money, cool. What are the downsides? Because like, it appears as though like one of the downsides could potentially be you're losing focus on your main money-making software. But, and I think you think that's worth it, but what are some other downsides? And his answer was, there are no downsides. And I was like, well, I mean, like every decision has a downside. Like the downside of being healthy is that you have to go to bed early when you want to go out and hang out with your friends. Like, but it's worth it. Like there, there are downsides. And he kept insisting there are no downsides. And in my head, I thought, if you can't be honest to me about this, like, pretty straightforward thing, is there anything else that you're being dishonest about?

Yeah. There are no downsides, said every charlatan ever, right? That is a, uh, it is, could be a red flag. That doesn't mean it's damning. Now let me give you—

it does not mean it's damning, but it was a red flag.

Let me give you the generous interpretation of this. So I actually agree with Michael Saylor in one weird way when he said there's no downsides. Which is that for him personally, there were really no downsides at the time. At that time, if you go back and you listen carefully to Michael Saylor's interviews, most of the interviews, he just talks about how he had the epiphany and he realized that Bitcoin is the way and he started doing it. The true story is that there's one like precursor to that epiphany, which was that he was stuck between a rock and a hard place. He had this software business that was successful, was profitable. And I think at the time it was even, you know, had shown growth or had been showing growth over the last 10 years. And he was getting zero credit in the stock market for it. And he's like, what am I supposed to do? Like, we're a successful company. We've been operating successfully for, you know, 15 plus years. And the market is basically saying, give us back the cash. We don't, we will not value you for any of the cash you have on hand, you should just give it back to us. We are going to give you no stock credit for how you might invest it, how you might use that cash, how you might grow your business. We're going to give you zero credit for it. And so he had this problem, which was no matter what he did with his company at the time, he couldn't get the stock price to go up. He couldn't increase shareholder value. And so he had, in some ways, nothing to lose because he was stuck and he had been stuck in this plateau for so long. And the market, he had said, he says in some interviews, like the market was giving me a very clear message. We don't believe that you can invest this cash in any way that's going to grow your business. Well, then he's like, well, screw that. Why don't I just do something else with it? If I can't grow MicroStrategy with it, maybe I can grow it through investment. And he went and he looked at real estate and he looked at gold. He looked at all the different ways that he could do it. And he basically at that point deduced that Bitcoin was his best bet to invest the money. To actually grow the stock.

And was he like a crypto guy? So 2020, for a lot of the hardcores, was late in the game for crypto. Was he like—

he was skeptical. He did not believe in Bitcoin. Somebody had told him about it. He didn't believe it.

So he wasn't one of these like early hackers.

He went and watched a bunch of Pomp's interviews and he started reading about it. He started learning about it. The other thing that was true was that he looked at the amount of inflation and he realized that the kind of stated goal of 2 or 3% inflation was misleading, that it didn't count a bunch of other things. It also didn't take into account the fact that if you were an investor, you just put the money in the S&P 500, it was growing at, you know, 10, 15% a year. And he was like, look, if I can't beat that, there's really no reason to invest in my company if I don't have the ability to beat that rate. And so what he wanted to do was, you know, like most Bitcoin maximalists, they just, at the end of the day, they look at fiat currency and they believe that Here you have a weak currency, and if you could ever, if you could borrow a weak currency at 0% interest rate and use it to buy a hard currency like Bitcoin, that's a good trade. So that's the two things that he wanted to do was he wanted to get out of fiat because he didn't like the direction that fiat was going with inflation. And secondly, he knew his stock was stuck. Okay. So that was that part back then. But at that time, he wasn't doing this thing where he's borrowing billions of dollars to buy Bitcoin. And so let me just like kind of walk you through the model of what he's doing now. Okay. So basically MicroStrategy issues debt. They use that convertible bond, corporate bond. And so that like today they just did a $5 billion, whatever corporate bond offering.

Who'd they raise it from?

Bond buyers, the bond market. So there's trillions of dollars that get invested in bonds. And one of the things that, you know, you might say, why does, why do, why are people buying a MicroStrategy bond? Is it because of the underlying business? And it was—

Versus just buying Bitcoin that themselves, or just buy Bitcoin themselves.

The, the arbitrage is that he realized there's, you know, a trillion-dollar-plus market of people who, of people who buy bonds, that because of their structure, they're not allowed to buy securities. So they can't buy stocks, they can't buy real estate, they can't buy, uh, Bitcoin directly, they can't buy the Bitcoin ETF. So the bond market cannot access Bitcoin unless they access it through a bond.

Got it. That's interesting.

The mandate of those funds is that they can only buy bonds. That's why people gave them the money, was you're going to buy bonds. It's a 0%, uh, interest rate, but it— you can convert the bond into MicroStrategy stock at a certain price, at $300, $400, $500, $600 a share, higher than the current price of the thing. So it's like a long-term call option on MicroStrategy.

Okay.

So if you were in the bond market and you wanted access to Bitcoin, but your bylaws and your mandate does not allow you to buy Bitcoin directly, then that's a crazy loophole.

That's a crazy loophole.

Supply demand. So he's the only supply on the market to absorb this, this demand that's there to, to get access to Bitcoin type of yield. It's by, by issuing these, these things. Okay. So that's the first part. So then he buys Bitcoin and he goes and he tells the whole market, I'm, I'm a forever buyer of Bitcoin. I will increasingly be buying billions and billions of dollars of Bitcoin. I'm doing it at the market price and I will continue doing that. That instills a bunch of confidence in the Bitcoin market because Bitcoin says, wow, there's this whale who says, I don't give a damn, I'm doing this, I'm deep-pocketed, and I'm going to keep doing this. And so he takes supply off the market, he signals to the market that I'm a forever holder, and he says, I'm going to keep buying bigger and bigger amounts as we go. So the Bitcoin price goes up. So now Bitcoin price goes up, which then causes his stock to go up because his stock is based on the fact that they have $30 billion of Bitcoin sitting there. And the stock goes up, And then he sells more equity at a premium and he buys even more Bitcoin. Now he's selling equity shares to buy Bitcoin. Rinse and repeat.

Is he selling any of his equity in the company?

Um, I don't know. I'm not sure.

And is he liable for any of these, uh, convertible bonds or these bonds?

No, it's not like a personal guarantee. No, it's a corporate bond. If this goes south and this collapses, then his You know, net worth, which is highly based on his holdings of MicroStrategy, are going to go down, right? And his reputation and everything else.

And what's his net worth now? How much of MicroStrategy does he own?

He owns 9.9% of MicroStrategy.

So as of today, just off MicroStrategy, he's worth, uh, $8 billion. Okay. In 2020, the company was worth $1.4 billion, so he was worth a measly $140 million. So he's grown from $140 million net worth assuming that it's his only money, which it probably isn't, all the way up to close to $10 billion.

So it definitely had asymmetric upside versus downside for him, right? Like, uh, hitching his wagon to the Bitcoin rocket ship represented a way for him to, like, you know, go explode up in a good way, in a way that he was never going to be able to do with just MicroStrategy, the declining software business. At the same time, you know, there obviously is reputational risk and there's capital risk. Now, Okay. So how is it going? They've basically acquired almost 400,000 Bitcoin. Um, they've outperformed every company in the S&P 500. And last week alone, it saw $136 billion of trading volume. To put that in perspective, even GameStop during the GameStop— GameStop never saw this. So he's basically created— he's intentionally turned him— turned MicroStrategy into a meme stock, meaning he's detached it from the underlying business in the way that GameStop did. And, and created a product that the option traders want, that the bond traders want, that the Bitcoin maximalists want, that the Bitcoin skeptics hate and want to go short. Now, what, what could go wrong? Let's go to, let's go to there. Um, and by the way, let's also say the craziness of not only doing this, but then spending the last 4 years just on tour being a Bitcoin evangelist is also like a really extreme step to take, right? Like there were no, half measures in what he did. This is a, uh, you know, sort of Elon Musk style, all in, reputationally all in, financially all in.

And he has that personality. He's got the type of— I don't know him other than the 60 minutes we spent virtually with him, but he seemed like he had the personality where he's super high IQ, super low, like emotional, normal human emotions where he's like, right. But it makes sense. The math says this, therefore I do that. Even if that is a ridiculous thing to most people's standards.

High IQ, high T count. Yeah.

Like, yeah, like he, he ponies up.

Okay. So now what's the, you know, at the same time, maybe I'm just like a PTSD from past crypto cycles, but like I mentioned, every crypto cycle this happens, somebody gets uber aggressive. They're seen as a genius, they overextend or they commit malpractice and they come crashing down when the cycle, inevitably these things are all cyclical when it goes down. Last cycle it was FTX, it was Do Kwon, it was Three Arrows Capital. These were multi-billion dollar vehicles that were created very quickly. They burned bright and then they fizzled out due to one of those two reasons. I'm on the lookout right now. Bitcoin's at an all-time high. Instead of just jubilation, I'm just keeping an eye out. Fool me once, shame on you. Fool me twice, shame on me type of thing. So I'm just keeping an eye on what might it be this cycle. On the other side, he's made a couple of genius calls. So back in, I want to say, when was it? 2007-ish timeframe. There's a bunch of interviews of Michael Saylor talking about Apple, maybe 2012. And he basically is talking about, he's on a thing and he's like, Apple's going to go to $2,000 a share. And he's like, you don't understand what's happening. Apple is inventing, the same way that he's talking about Bitcoin, how Bitcoin is this, you know, the greatest invention ever, how it's going to be millions of dollars a coin. He was talking about Apple the same way. He's like, you have a supercomputer in your pocket. Do you understand what this means? You know that 4 billion people are going to be carrying this thing around and that Apple's going to be making X, all the numbers just sounded insane to people at the time. And when he was talking about it, and it's all come true, like his, his entire bet on Apple, he's like, he's like, I don't know why you would own any stock besides Apple. And like, if you had listened to Michael Saylor at that time, so he's always, he's always had this, like, you all are stupid.

This is obvious. And he's right sometimes.

Yeah. I mean, I don't know. It's, these are oversimplifications, but yeah, like, I guess the guy's fascinating. He is a fascinating guy. I think you described him well. He's extremely high IQ. He's extremely high cojones, and when he gets conviction on something, he sounds insane. And so, okay, I think the main thing is where does this go wrong? So I think the main place it goes wrong, obviously, if Bitcoin's price starts to crash, the problem will be if for whatever reason MicroStrategy stock, which today trades at like a 2.5x multiple of NAV, you know, NAV is the net asset value. So like the underlying asset that it holds, right? It owns $33 billion of Bitcoin. So the question is, why is it an $83 billion company?

Which is what you think it should be. It should, if you own it, it should be like a $35 billion company. Yeah. It should be, it should be whatever the asset is. Plus like the multiple of profit for software.

It's a Bitcoin holding and acquisition company. And so maybe you say, okay, here's its holdings. Great. And then on top of that, maybe there's some premium for the fact that it's able to acquire them on leverage. It could do things that a Bitcoin ETF can't, right? So a Bitcoin ETF can't issue a bond. It is different, but the question is, is 2.5x the right multiple?

Yeah, that's crazy.

And the question is, the down spiral looks like this. The unwinding looks like this, which is MicroStrategy, for whatever reason, either because Bitcoin price goes down or the stock market just changes its tune on it, starts to not trade at such a premium to the nav. And now all this money that it's borrowed, these bonds expire 2027, 2028, 2029. If those were to convert, he would be forced into selling Bitcoin. And once he becomes a forced seller, now the whole market, the whole Bitcoin market will start to crash because it'll say, oh my God, MicroStrategy is going to have to unwind its entire Bitcoin position. That's going to be $35 billion or more of Bitcoin hitting the market.

How much is Bitcoin worth? Like how much, what percentage of a player is he?

He owns about 1% of the Bitcoin float today and he's trying to get, you know, 2% basically.

This guy's intense.

Yeah. This guy's— I guess my short story is I don't know what's going to happen. I guess my disclaimer is this: I do not know what's going to happen. More than that, I'm a novice when it comes to this. However, I've been in a few crypto cycles before, and I've seen in every single crypto cycle, when crypto goes up, somebody starts being very aggressive, acquiring, uh, buying, buying crypto using leverage. Like he's doing right now. It hasn't ended well in previous cycles. And right now everybody is calling this the infinite money glitch. You go on YouTube, you search MicroStrategy, infinite money glitch. He's a god. He's the best. And it always makes you wonder, what is the scenario where this unravels? And do I believe that that could come true here? There is no strategy that is risk-free. There is no free lunch. And I think that right now the entire narrative is about how this is a free lunch, how this is a free money glitch. And I don't believe that. I don't know enough to know the specifics about this, but my spidey sense is tingling.

Who's the, um, the most conservative Bitcoin per— so, uh, conservative being, um, like they're rational and they could explain the pros and the cons without being overly emotional. Who, who's that in the Bitcoin world?

So that's a good question. Who do I trust the most to have a rational opinion about Bitcoin? That's a great question.

Yeah. Who could be, who could—

so there's, there's this a guy like Andreas Antonopoulos who I believe is that, but he's a technologist. So you don't, you listen to him about how Bitcoin as a technology has great potential. So, you know, you read his book, which is called The Internet of Money, and he's extremely rational and he's a good faith actor.

Who's the person that's like, you know, if we all buy into this and if it works, you know, the upside is this. But if we don't, the downside is this. And this is like, who just says like, like, here's all the potential.

I think a lot of people say that. I think a lot of people understand this. A lot of people say like, look, Bitcoin has these properties. It could become X. It could become the next gold. Actually, most people fall into the bucket of they don't price that as 100% certainty, right? They say it's possible and there's a potential for that. That's why I own some of it, but I don't put my entire net worth in it. And that is also possible that it doesn't. Doesn't get adopted, or that there's a technical flaw, or that governments beat it down in these ways, or that it becomes unpopular for these reasons. And that's the risk in this, right? Like, there's a bunch of people that feel that.

Those vocal thought leader rationalists, what do they say about Michael Saylor?

They don't take a position. Like right now, even as I'm saying this, I'm thinking to myself, yeah, I'm going to go cut this in post because Why take a position? What's the upside?

The upside is, well, there is some upside.

I might be right a few years from now.

You're going to look good by predicting things. And there's also the upside of just doing what's right and telling everyone, don't waste your fucking money on this thing.

Yeah, but I guess it's, you have to be A, smart enough to understand it. B, you have to have the desire to look right by putting your neck on the line with a prediction.

Yeah, the Bitcoin community has— doesn't seem like it typically has the, like, the moral fiber. No, no, I wasn't gonna say that. I was gonna say, uh, they don't mind expressing— they don't— they're very vocal.

They, you know, if someone thinks you're full of it, they also very wishful about their bags, right? That's— I think that goes back to your question of who could you trust to not speak just hopefully about their bag, right? They just, they want it to be true so much that they convince themselves it's true and risk-free.

What I'm trying to get at is who's the person who I can trust to find out what the opinion of Michael Saylor is.

I have searched long and hard because before this podcast I did research to say, can— and I literally tweeted this out. So if you think I'm an idiot, I also think I'm an idiot. My tweet today was, can someone with a better brain than me explain what Saylor is doing? A, no strategy is without risk. What are the risks? What is the math? If Bitcoin drops to X dollars, it becomes a problem. And B, why is the stock trading at such a premium to NAV? That post has, you know, maybe 100+ replies. I read every single one of them. I read other threads that people have put out about this. If there was one great explanation, I would've just pointed you to it and I would've read it out loud. I have not found one myself. That doesn't mean it doesn't exist. I have not found one myself that I can read and I could say, oh, in simple terms, I understand why he's doing this, why it's working today, what the risks are, how it would unravel if it unraveled.

I'm only recently at the age where I don't trust everyone. Uh, like, like, like up until recently, like my logic was constantly like, well, the institutions are buying into this, therefore it must be safe. Or like, you know, like whoever's raising the money for this guy, like surely they know what they're talking about. So now I'm, I, I've just 2 years ago got to the age where it's like, you know, they're flawed humans just like me. And so I don't know who to trust with any, with these types of situations. Because I'm so uneducated on the topic, but I have, uh, my spidey sense is tingling. I wouldn't— I, with my own money, I wouldn't touch any of this. Yeah, yeah, that's what I would say right now. I have, I have no proof, uh, other than it just, it doesn't feel good. Do you know what the, uh, I think, I think the Supreme Court or someone like that, like, defined pornography, uh, like they said, like, you know, it's hard to— they're like, it's hard to define but you know it when you see it. You know, what's the difference between pornography and like a nudity in a National Geographic TV show? You know it when you see it. I don't exactly know it when I see it, this situation with him, but I know that something doesn't feel right and I can't explain why.

Okay, so here, here's my commitment. Um, I brought this up today half-baked, and I admit that. Um, I'm gonna go and try to find the smartest people I can to explain this to me until I'm satisfied with the simple explanation of what's going on. And then I'll share that. If I leave this in, I'm saying that as a bookmark to say, let's hold opinions till part 2. I might just take this whole part out because I'm uncomfortable with the level of half-informed speculation that was in this section.

Uh, I think it's interesting. I think it's interesting, but you know that like shockingly people look to you foot forward like this. Like you are so— like I asked you that question, uh, of like who's rational that people look to. There are many people who would say Sean.

I am rational, but you had two criteria: who's rational and intelligent. But a lot of people— one that I fall a little short on in terms of these things, right?

And I think, I think that you vote like vocal— like, like I'm still working through this problem. I think that's actually quite valuable.

Yeah, I guess I'm just like only 10% of the way working through it and I'm just thinking maybe I should have gone to 50% before coming on the pod and talking about it. But I will say this, a lot of, a lot of the people have done well with Bitcoin and the people who understand Bitcoin, it is the Midwit meme. Like they, they look at Bitcoin and they look at all the information and then they reduce it down into a very simple, way of looking at things. And the simple way of looking at things, which is either this is a better version of gold, and so it'll be, you know, it's a tech improvement on gold. There's people who reduce it down and basically just say, would I rather have hard money or soft money? Meaning, would I rather save wealth in a— would I rather store wealth in a currency that can't inflate mathematically or a currency that will inflate? And if you just whittle things down like that to a level of simplicity, you can be right without even knowing all the details. And so I think one of the challenges with your question of who are the smart, intelligent people is that the smartest, most rational people I know about Bitcoin a long time ago, you know, 8 years ago, told me a very simple thing, bought it, put it in cold, cold storage and moved on with their life. Um, and they don't follow all the twists and turns and they don't try to hop on the next wave and the next trend and they don't do crazy options trading or 100x leverage. They don't do any of those things. And they made a simple opinion based on a very simple assessment. Um, and they've proven to be right and not overcomplicating it. This has been the signal of who's actually intelligent about this versus somebody who's every day on the news, has an opinion on every single thing, is trying to outsmart everybody. Those tend to not be the people that I actually, you know, trust their opinion on this stuff.

Have you seen that show Love on the Spectrum?

Yeah, I have actually. It's a show about autistic people dating, right?

Yeah. And there's this one episode where these two— a guy's dating this girl and he was like, "Do you like tacos?" And she goes, "Yeah, I like chicken and cheese." And he was like, "I don't have anything else to say, but I want to let you know I'm having a good time." And I want to normalize that in both dating and on this podcast, which is And that's sort of how I feel right now, which is I don't have anything else to say, but I want to let you know I really enjoy this topic. That's it. That's the vibe.

That's the vibe.