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available through Stargate. Hi, I'm Ral

Pal and welcome to my show, The

Journeyman, where I travel to that nexus

of understanding between macro crypto

and the exponential age of technology.

Now, I've obviously been in crypto for a

long time since about 2012 is when I was

first involved. But one of the great

interviews I did of all time was the

interview with Michael Sailor back in

2020 that kicked off this whole stampede

of the kind of Bitcoin treasury

strategy. And I'm traveling right now.

And so I thought, you know, what could I

bring you that would be interesting for

you to learn from the genesis of the

idea of why Michael Sailor did this.

Now, you've all seen hundreds of Michael

Sailor videos, but this was the first

long form one with him. It was the one

where we really dug into why he got

there, what he saw in it all, and I

thought it would help you frame it. So,

anyway, enjoy this video from 2020, and

I'll be back next week with something

fresh and new from an OG in this space

who got me into crypto back in 2012.

Okay, enjoy. Join me, Ral Pal, as I go

on a journey of discovery through the

macro, crypto, and exponential age

landscapes. In the journey, man, I talk

to the smartest people in the world so

we can all become smarter together.

Michael, great to get you on Real

Vision. You've become suddenly a legend

in the crypto business and kind of a

real thought leader for many people. and

I just thought it would just be

fascinating to get you on. But before we

go down that kind of crypto journey, I'd

love to hear a bit about your

background, where you came from, and

also Micro Strategies itself. Okay. Um,

I'm an Air Force brat. My father was in

the military. I lived on Air Force bases

my entire life. I got a scholarship from

the United States Air Force to go to

MIT.

I went to MIT and I and I was that

generation where I read science fiction

books. I read them all. A big fan of

Robert Heinline. I decided I was going

to be a rocket scientist and I got an

aeronautics and astronautics degree with

a specialty in spaceship design.

And uh while I was there, I um I

stumbled across uh this school of

management uh uh system dynamics uh the

construction of cons uh computer models

to predict the future. And uh I ended up

getting a second degree in science and

technology and society and the history

of science. So that that was formative

because it was all about paradigm

shifts, the structure of scientific

revolutions and how did people decide to

embrace nuclear power or electricity or

petroleum. And a lot of people think

that technology just kind of is a modern

thing. But of course, and they think

that technology companies are a class of

investments. And I I'm always amused

when finance people talk to me about the

tech sector

because they're only It's kind of an

ignorant statement. There's never been a

successful growth company that wasn't a

technology company. Once you understand

technology for the past hundred years,

John D. Rockefeller was a tech company.

You know, General Electric was a tech

company. craft and Hershey's were tech

companies. So, um, studying technology

for the past 100, two, three, 400 years

and why people do it. That was

interesting to me. I, um, thought I was

going to be a fighter pilot astronaut,

right? But, uh, so I learned to fly in

the Air Force and in my senior year, uh,

Reagan won the Cold War. They ramped

down, the military, cut it in half, and

I had a macroeconomic event combined

with just a random a random uh personal

event that catapulted me into business.

The macroeconomic event was the end of

the Cold War, the draw down of um the

United States military. Uh and uh the

United States had paid for my education,

and I was like on the hook to serve. I

thought I'd be in the military 10 years.

And um my final flight physical my

senior year at MIT, they diagnosed me

with a benign heart murmur and that

disqualified me from flying jets. Now,

by the way, the hilarious part of the

story is they kicked me out of uh the

aviation program. Uh I was a little bit

dejected and then the next week they

came and they said, "You can join the

Air Force Reserve and be a civilian."

and I was going to get paid three times

as much money as a civilian as I would

have made an inforce. So I thought,

well, you just gave me a free education

and I get to like not pay the money

back. By the way, the week before they

said, well, if you don't go in the

military, that's awall. You go to jail.

Okay, so I went from you're going to be

in the military for a decade or you go

to jail to Ronald Reagan is giving you

the gift of your freedom. And by the

way, to make it easier, if you want to

be in the military, you have to wait two

years working a part-time job before we

call you up and then maybe we'll call

you up. So, I kind of got a kick out of

the military and then a doctor said,

"You can't fly." And I was kind of

dejected and I thought, "Well, this must

be a sign from God. I should do

something else." So, I joined the Air

Force Reserve and I left MIT.

I um I worked for about two years and uh

I was going to go get a PhD

uh because I had a very simple list. I

you know every every red-blooded

American male in the 80s had this list.

Rockstar, astronaut,

fighter pod astronaut, Top Gun, right?

Obviously. Yeah. Professor. Okay. Or

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So, I tried my rockstar thing in high

school and then I realized rock stars

don't make any money or at least 99.99%

of musicians make like 20 bucks for the

game. Yeah, I tried it and I just can't

play guitar. I'm just not coordinated

enough. So, I had to give up for one

reason or the other. We give up on

Rockstar. That was our first goal. The

second goal was fighter pilot astronaut

and that that was dashed by some

physician. You were close. By the way,

the hilarious part of the story is a

decade later, I go back to the doctor.

He goes, "Oh, you're perfectly fine." I

said, "I can't be fine. I have benign

heart murmur. I have mitro valve

prolapse." He goes, "No, you don't." I

said, "But but but I'm sure I do. They

kicked me out of the Air Force because I

had it." He said, "Oh, that was a

mistake. They used to make that mistake

all the time. You know, we have much

better equipment now." So, so I left my

fighter pilot astronaut track because of

a mistake and I ended up uh ended up

working but I left a military track on

February March my senior year. I missed

all of the financial aid applications

for fellowships. I couldn't afford I had

no money. I couldn't afford to go to a

PhD program. So, I worked for a year. I

applied for all the fellowships. I got

into MIT and Harvard and I was going to

go get my PhD and be a professor and

life was done. And uh just as I did

that, I informed my boss and my boss

worked at the Dupont Corporation and he

had I had built a computer simulation to

predict the return on the investment of

about a billion dollars of capital

investment in titanium dioxide and they

needed that model to get the board to

give them the money. So, uh, when I

attended my resignation, the guy saw his

billion dollars of capital going away.

And I'm sure he said to someone that

works for him, "Go tell give the kid

whatever he wants, but he can't quit

yet." And I was 24 year old. I happened

to be important to a guy that needed a

billion dollars. You know, I didn't know

I was important. I was just the right

place at the right time. So he tells a

guy who tells a guy that comes to me and

says, 'Okay, well we'll give you a raise

if you stay. I said, 'I don't want a

raise. I want to be a professor. They

said, 'Well, what do you want? I said I

said, rockstar astronaut,

there's only one other thing I want. I

want my own company. So I said, I'll

stay if you finance my I I want uh I got

millions of dollars of contracts. I got

a quarter million dollars up front. I

got free office space for couple of

years. I got all the computer equipment,

IT support. 10 people from Dupont came

over to work for me. They didn't take

any equity. So, it's the best deal ever.

And I you I did this one negotiation, my

best negotiation of my life. They, you

know, I had zero money. In fact, when I

started this company, I went to a bank

and I got the only unsecured loan that

you can get as a 23 year old, which is I

said, "I want to buy $5,000 of

furniture." I mean, they gave me a

$5,000 furniture loan. I was living in

an apartment at 700 bucks a month with

uh with milk crates for bookshelves, and

I thought, five grand, that'll last me

six months. I maybe that'll make it. So,

I got a $5,000 furniture loan. Then I

said to Dupont, "I need a $100,000 cash

check upfront to start." You can imagine

these guys in suits. And they thought

the kid is out of his mind. And and they

said, "We can't give you that. You might

take that money and run off to the

Caribbean like maybe where you are right

now." And I was like, "Well, you know,

you got to give me the money because I

and this is my negotiating story. I

said, "You got to give me the money

because I have no money.

And they looked at me and they're like,

"You got a point there. You got no

money." So I they literally wrote me a

$100,000 check. And by Ral, at this

point on $700 a month rent, I literally

believed that $100,000 would last me for

seven years. I calculated I had seven

years of capital. Took the money and I

started Micro Strategy. And we're at 10

people the first year. And I thought,

I'm going to defer my PhD program and

when this thing fails, I'm going back to

college. And the next year we were 20

people. And the next year we were 40

people. The next year we're 80 people.

The next year we're 300 people. And the

next year people said, "You got to go

public." And and at some point I So what

year what year are we in? What year are

we in now? We started I graduated MIT

87. I started this in ' 89. Started

micro strategy in ' 89. Wow. And again,

I got so lucky, like lucky that I got

misdiagnosed by that doctor, lucky that

Reagan won the Cold War. Then I got

lucky that the dotcom boom took off

because if you recall between 96 and 99,

everybody was going public. And we were

just coming of age in 96, 97,

you know, and in 98 we came public, June

of 98. And of course if we'd come if we

had two years late wouldn't have

happened two years early wouldn't have

happened. We came out right that through

that window and by then it was just too

late for me to go back to college and I

was like stuck as a CEO for better

worse. So that's how Micro Strategy was

founded. It was if I c I couldn't do it

again like in that Twilight Zone episode

where the CEO goes back and gets all of

his knowledge to try again. and he ends

up the janitor. If you put me back there

again,

I'm like, well, I need the Cold War to

end and I need a doctor to make a

mistake and I need someone to tell me to

do the opposite of what I wanted to do

and then, you know, it's just all

random. So, were you a risk taker with

the firm? So, as you go through the the

journey from, you know, going public, so

everyone's a risk taker when you start a

business, you have to be, but then after

that, were you a risk taker? I mean how

did how did that kind of corporate

journey evolve you as CEO? You know I in

hindsight I was a risk taker but at the

time I didn't realize I was taking the

risk. The most dangerous kind of risk

I you know like uh like if I if I could

go back I would give myself counsel to

do things differently. But yeah we we

did take risk. Although um

one thing that I I did is I just was

always very passionate about technology.

So we launched Micro Strategy as a

business intelligence company and we

were always inventing the next thing. By

the way, the first um the first risk

that I took was I created a piece of

software to create computer simulations

on a Macintosh. And older, wiser minds,

professors from MIT told me, "Uh, that's

an awful idea. Um, the Macintosh is not

going to win. Everybody knows that

business people use PC." Okay, we were

like a million-dollar company then. I

said, "Well, I guess you're right, but

the Macintosh is much more beautiful."

and better technology than the PC. So we

doubled and doubled again

and they and the professor that gave me

that advice was still running a $300,000

a year consulting business and we are 4

million with with the wrong technology.

So then the professor asked me what I

was doing. I said, "Well, I'm creating

executive information systems using this

spreadsheet called wings with a

hyperscripting language." And that

professor said,"Well, all my friends

tell me that Excel is going to be the

choice for all big businesses and Wings

is going to fail." So I said, 'Well, you

may be right, but Excel doesn't have a

scripting language, so we'll try it for

a while. Well, we doubled again and

doubled again, and we got to be 30

million. And he was right, and he's

still running his $350,000 consulting

business. And then he asked me what I

was doing. And I said, 'Well, I've

decided to convert to Microsoft Visual

Basic and we're going to create

relational analytics on top of big

databases. And he said, well, do you

have any experience big database? I

said, no, none at all. And he said,

well, you know, Visual Basic is not what

people use for software engineering.

They use C++. I said, yeah, but I can't

figure that out yet. So, we did it and

we doubled again to $60 million. and he

was still running his $350 million

$350,000 consulting business, not making

a mistake. At which point I realized,

you know, you're kind of an idiot. You

need to write us the software in C++. So

we took the money that we made making

the first set of mistakes and we wrote

it in C++ and we doubled again. And

then, you know, I'm sure someone would

have said don't go public, but basically

I would say we mistake. You're not very

good at listening to people. That's your

problem. You know, I always chase after

these shiny things,

okay? But but there's a method to the

madness, which is you're better to be

correct and do something that works now

and then figure it out three or four

years from now than to do nothing and

sit and wait and be beat to death. So I

mean the short of the story is yeah I

took like six or seven risk and and

every three years we had to invent

something new web intelligence, mobile

intelligence. We launched a we launched

a business called alarm.com. Oh by the

way I got really enamored with domain

names. I you know I bought

microstrategy.com

for my email and then I got lazy and I

thought I hate typing micro. Wouldn't it

be better if I just had the email

sailorstrategy.com?

So, I bought it. You know, back in the

day when you could buy it for $100,000,

I bought the word strategy and still own

it. So, then I thought, this is kind of

cool. What other words could I buy? So,

I thought it'd be cool to be sailor at

michael.com.

So, I bought michael.com and then I

bought mike.com and then I was like,

then I bought wisdom. And by by the way,

the world needs hope, right? Everybody

needs hope. I own hope. I own hope.com.

So, I bought all these domain names.

Hope Allah. Do you still own them? Do

you still own them? I own Hope. If you

would like Hope, by the way, every about

once every month, someone wants to buy

Hope for me or they want some Hope, but

they always offer me like a hundred or

$200,000

and I'm hoping for a hundred million

dollars.

So, I just keep it. But that's a

meandering way of saying I got really

enamored with domains back in the mid

90s to the late 90s. And then I started

thinking these are like real estate and

cyerspace. What if we could

commercialize them? So I commercialized

strategy.com and I created this like uh

it was like a Twitter subscription. You

could sign up for alerts to anything

under the sun. And the company went from

zero to 100 million in one year and then

went from a 100red million to zero in

one year. And I you know it was

it was it was interesting. I learned a

lot from that. I had the skin flaided

off my back.

But, you know, then but then I went on

to alarm.com and but we'd launched these

under the micro strategy umbrella. And

the idea behind alarm was what if you

could wire all your home alarm systems

into the internet and they would talk to

you and talk to your phone and they

would tell they would call you and tell

you if someone broke into your house and

then and uh you know not a brilliant

idea today Amazon and Google and Apple

are doing it. Pretty unique in the year

1998 or 1999. Wow. So we launched that

and uh we launched it on alarm.com. So,

if you go and type alarm.com right now,

what you'll find it's a it's a billion

dollar company. Uh, we eventually spun

it off. We made a decent amount of money

off it. Then they went public with

Goldman Sachs and it's it's a billion

dollar NASDAQ traded company now. So,

that's one of my babies. It flew away

from home. I created another one called

But I bought Angel Ral Angel. A N G. My

my theory of these was very simple,

which is people have a hard time

spelling and they have a hard time

remembering things. So, everybody gets

taught how to spell angel or hope when

they're in high school or junior high.

So, if I tell you my charity or my

company or whatever is on Angel, you go

a A N G. You don't got to go to the

Google. You don't have to go to Yahoo.

You don't have to search for it. If you

search, by the way, for voice on Google,

you get a billion hits. You have to sift

through a billion. If your name of your

company is something voice or whatever,

voice of the people, there's a billion

things you're fighting with. If you own

voice.com,

you go to the top. By the way, not only

do you go to the top of the search

engine, right? Nobody needs the search

engine. You can bypass the search

engine. Everybody knows how to type in

voice, right? So the idea was own the

word in cyberspace. It's a scarce asset

right

for 10 you know thousand years people

been using the word so own the word. So

we basically commercialized on angel the

idea of interactive voice response like

Emma sorry not like Siri Siri or or or

or the like or Alexa and uh we did it

back in 2000. anybody could basically

build an interactive voice response

application. We plugged it into your

telephone and that started to work and

but it was a SAS application. We ran it

out of the cloud and you plugged it in

your telephone and we built it to a

certain point but it was a totally

different brand. It was a different

business model and and I had an

enterprise software company and this was

not enterprise software and it drove all

of the accountants crazy. So eventually

we realized it was more valuable to

someone else than it was to us. And we

sold it for about $120 million.

Uh and so that was my next little hit

with a domain. And then then at some

point I started to realize that if

you're not the best in the world at

something, nobody wants you for

anything. Okay? And it's like, you know,

in the early days we all thought, well,

I got $30 million. I can build this app.

Everybody wanted to be WhatsApp.

Everybody wanted to be Instagram or

whatever. I want I'm I gotta But if I

had a nickel for every time someone said

I have an idea for a mobile app, you

know, it's like, yeah, you do, right?

And it's worth a nickel. I launched all

these things. Some work, some didn't

work, right? And I, you know, I tried I

tried many of them. And then I

eventually realized that you need to

focus, right? It's the first hurdle

is is can you acquire a thing? Can you

build something? Okay, you generally

can. I mean, can you buy that thing? The

second hurdle is can you um can you

compete in that market, right? Can you

can you maintain a competitiveness in

that market? That means investing every

year as much as the next best person is

investing forever, right? Can you stay

competitive? That's a higher hurdle. But

the highest hurdle is can you

commercialize or can you profit from the

thing? So a lot of people can do a

thing. Yeah. Most people can't do a

thing better consistently forever. And

even if you can, can you make money off

it? Okay. So this is this is an

articulation of stoicism. Just because

you can do a thing doesn't mean you

should do a thing. And every young man,

he sees everything. He's like, I have to

do all this stuff. I have an idea for

this and this and this and this and

this. So I I went through that journey

of do this and do and it kind of worked

for you. You had more successes than

failures. I I failed up. I got a lot of

scars but I but it was humbling to I

mean you have to have the failures uh

along with the successes because if you

if you don't fail eventually you get

this big failure where it all comes

crashing down. So I guess I adopted

along the way this idea of stoicism and

I realized that you need to put all of

your heart and soul into one thing. And

so at that point we sold off the one

company, we spun off the other thing.

And I realized, you know, my destiny was

I could I could run Micro Strategy and

be the world's best business

intelligence company solely focused upon

that one thing. that's what we're going

to be. And um I went back to doing that

and I let the other things go and I let

the domain portfolio just sit and um it

and and we just we're the little engine

that could focused on making our

business intelligence better with web

intelligence and mobile intelligence and

cloud intelligence and and now our cool

thing is hyper intelligence. It's like

it's like know the answer before you ask

the question without clicking on

anything, you know, and I'll tell you

about that in a bit if you want. But

yeah, I'm super interested. I I was just

busy minding my own business. I got off

I used to tweet, you know, I used to

tweet all the time. I got off Twitter. I

focused on my core business. And then

eventually I came back. I discovered

Bitcoin. The day I put on Twitter that

we bought $250 million worth of Bitcoin,

the entire hive mind of crypto Twitter

came to life and they went through every

tweet that I had put out there, a

thousand of them, and then someone

dredges up the tweet where I had once

upon a time in my imminent brilliance

discovered that Bitcoin was dead and it

was going to zero. And I

enthusiastically posted that back in

2013. And and everybody wanted to know

what I thought about that. And and and

what I got to tell you is I didn't

remember I ever had an opinion on

Bitcoin until they reminded me that I

had once been utterly wrong on it. And

so I I guess that's very humbling. But

uh but I I love the entire crypto

Twitter community. I mean, I think

they're the smartest, coolest, most

interesting,

uh, charismatic individuals. You know,

when they're right, they're right. When

they're wrong, they're still kind of

interestingly right. And, uh, and I

think they make us better versions of

oursel. But putting that aside, I was

minding my own business running micro

strategy, try to be the best business

intelligence company we can. And I would

say that's 150% focus on the P&L. And I

was not you know and and with regard to

investment my investment world consisted

of this RL it's like

I was a technology investor in the year

2012 I published a book the mobile wave

and in the mobile wave I in essence said

software is leaping from out from under

your desk beyond your laptop onto a

mobile device. It's going from solid

state to liquid state to vapor state and

it's going to be like vapor all around

us. And what that means is that the

entire software uh world is becoming

uhworked

uhorked vapor state uh incredibly

powerful dematerialized versions of of

products and services. And so the

summary is is um Apple computers going

to rule the world. Buy Apple, Facebook,

Amazon, Google. Go. If you read the

book, you know, that's what I wrote. I

mean, the epiphany was 2009. I asked my

niece who was nine years old, you know,

what do you want for Christmas? And she

said, I want the big Apple. And I said,

you want a trip to New York City? And

she goes, no, I want an iPad. Okay. And

I thought, Apple's going to replace New

York City. Apple's going to rule the

world. So my investment thesis was quite

simple. You know, Apple, Facebook,

Amazon, Google. A simple way for a tech

investor to think is you buy a dominant

network according to Metaf's law that's

won the market, the mobile network, the

information network, the video network,

the social network. I just named Apple,

Google, YouTube, Facebook, the you know

commercial. Very simple. buy the

dominant network and wait while all the

naysayers on Wall Street and all the

talking heads and all the people that

know better tell you why you I you know

hedge I hate the word hedge like like

like

uh you know I could tell you Wall Street

luminaries in 2012 would lecture me on

they would say you know you shouldn't

buy too much Apple stock we've got a

we've got a mutual fund and what we do

is if your Apple stock gets to be too

much of

computer portfolio, we sell it and buy

HP and IBM to diversify you, you know.

And I said, well, guys, don't you

realize that eventually Apple's going to

eat them all and there won't be a need

for HP or IBM or anybody? And what

happens when Apple is 150% of all the

profit in the entire tech indust

industry, right? Like, well, we don't

see it that way. Okay, that's what they

thought. And then they go, well, you

know, we're going to protect you if uh

if your share of your portfolio is too

much technology. we're gonna sell

technology and we're going to buy all

these other assets. And I was like, but

guys, what happens when technology eats

everything and there aren't any other

assets? Okay, in my opinion, and I'm

going to be snarky here, I think an

ignorant investor thinks that technology

companies are a part of of the index or

they're a part of the industry. In my

opinion, as a science historian,

John D. Rockefeller was running a

technology company. If you study the

history of Standard Oil, he did

everything that Jeff Bezos did a hundred

years earlier. And if you study General

Electric, once upon a time, electricity

was pretty technically interesting. And

if you've actually been to the Hershey's

factory in Pennsylvania,

not a one of these investors could build

the damn thing. Hershey's factory is a

computer built in steel welded which is

the most majestic

majestic creation of mankind you could

possibly imagine. Imagine writing a

computer program and billions of dollars

of steel and moving parts that spits out

a hundred,000 candy bars an hour, you

know, without contaminating them. You

know, it it's you think it's not

technology or or craft. You know, I

create ketchup.

The technology was I had clean room

technology. I had to take the tomatoes,

manufacture the ketchup, put in a seal

container without any bacteria in it so

that it didn't rot over the course of

the next year. Okay? It's clean room

technology. No different than Intel

semiconductor chips. So, when these

people think, "Oh, well, we're not

buying a technology company." It's like

every company that ever succeeded was a

technology company and the only reason

it grew was it had technology superior

to everybody else. So I I happen to, you

know, back to 2012, I thought my

investment thesis is you buy technology

companies that have a dominant place in

their industry that are going to eat

everything and then you just wait while

all the people that don't really think

hard about this short you or diversify

out of you. And eventually some

80year-old investor that's got more

money than God will discover that Apple

computer is not some new fangled, you

know, uh, gimmick, right? Eventually,

and he will buy it at 10x what you

bought it for and but and then it will

double again, right? and he will make

some money and you will have made some

money, but you'll have to be beat to

death by well well-educated,

well-intentioned, diversifying experts

while you wait for that to happen. And

they're going to say things like, "We're

going to hedge you out of this or we

don't want to don't want to take too

much risk on Apple, don't want to take

too much risk on Google." What if you

had diversified your Google search

engine into every other search engine

for the last 20? You know, one of the

things I've talked about many times is

there's a lot of people who want to

trade. They think trading makes money.

When you look at people who built real

wealth, it's basically one bet. You

know, Bill Gates is who he is because he

didn't sell his stock essentially, you

know, and that's the same. People take

one clear bet, filter out all of the

noise, and just pursue it.

Raul, you know, I listen to to uh your

phrase irresponsibly long, right? But

but you know, it's really tongue and

cheek. You're not irresponsibly

long. You're you're just you're just uh

unfortunately rational.

Or maybe the word is is uh is like uh

maybe uh slightly early being rational

like you're making a rational decision.

Uh no un what's the word for unpopular.

You're rational and unpopular. Exclus

exclusively rational. Maybe that's the

word exclusively rational. So once you

understand what's going to happen, you

kind of got to do it. I I bought a lot

of Bitcoin recently, like over the past

before that. Why the hell did you have

so much cash?

You know, that was the question I was

thinking. Okay, great. You bought

Bitcoin. Alec, how come you had so much

cash? Aren't you supposed to make cash

if you're in business? You're supposed

to make money, but what do you do with

it? It's just sitting in the business.

Okay. Well, th this takes me back uh

back to where we went off on my little

tangent, which is I was minding my own

business running Micro Strategy where,

you know, running the P&L. I was a wage

earner. You know, you go and you make a

salary and you spend less money than you

make. It's like a it's a 20th century

idea. My dad taught me that like

depression error economics. Spend less

than you make. So, we were making money,

spending less than we were making,

putting cash in the bank, and and we're

struggling to compete against, you know,

my competitors are IBM, Oracle, SAP, you

know, Microsoft, they're all hundred

times bigger than us. We're the

independent, we're the, you know, the

Switzerland. So, we're doing that. That

kind of takes up a lot of your

attention. And I'm not really paying

attention to macroeconomics.

I don't you know the my my investment

thesis as I said was buy tech stocks but

like you can't buy tech stocks as a

public company CEO and put the treasury

into tech stocks and you certainly

couldn't do it in the year 2012. You

might do it in your personal portfolio

but but the the conventional wisdom if

you're running a corporate treasury is

you're going to buy you're going to put

cash and you're going to buy short-term

treasuries short-term T bills. And I

happen to believe before the financial

crisis, you know, I remember the time

when you can make five and a half

percent interest on overnight money.

We're getting five five and a half%

yield. You have $500 million, you're

getting paid $30 million. By the way, I

happen to remember when savings accounts

paid 6% interest. It's like, and by the

way, we didn't think we were getting a

good deal from the bank. We thought that

was totally reasonable.

In every conventional wisdom was the

risk-free cost to capital is 6 to 8% and

then you got to tack on a risk premium

of 4%. So your real cost of capital is

12% to do anything and that's the old

day. So that that's the way I thought

about the treasury and then I thought

and then there were other people. What

else can I do with the money? You can

buy your own stock back

or you can buy another company. Now I

teach a course in uh management theory

to all my managers and my number one

question is how do you wreck a software

company in my history and by Ral I I'm

like the longest presiding public

company CEO in the enterprise software

industry nobody has been CEO of a public

enterprise software company longer than

me 22 years 88 quarters I count them one

at a time everybody came and gone Okay.

How do you wreck a software company? You

know, you have an answer for me. What do

you think? Number one way to wreck it.

I'm assuming it's going to be acquire

somebody else. Make a acquisition. Make

a bad acquisition. Okay. Bingo. The CEO

of SAP comes in. He lasts for nine

months. He buys autonomy. They take 11

billion write off. It's pretty

impressive to burn 11 billion dollars in

11 months on one transaction that you

probably spent I don't know a few hours

on. I mean like how how many lifetimes

how many a million lifetimes to make 11

billion dollars. So um the number one

way to kill a company is make a bad

acquisition. So I got all this cash. Do

I go buy something? I I have lived long

enough to see 90% Yeah. How about

Microsoft buying Nokia? That was a good

idea, right? Uh by the way, you could

have seen that one coming a mile away.

That was the most awful idea you could

imagine. Uh you want to count the

number? 90% of all acquisitions end

awfully, right? And and there's a few

accretive ones. If you buy a small

company, pump it through a massive

distribution channel, jack it up by a

factor of 10 with no variable cost, you

know, maybe it works, but acquisitions

are bad. So, I'm not going to buy a

company. So, what else do you do with

the cash? You buy your own stock back.

Okay. How many how many companies have

gone Toys R Us gone bankrupt because

they bought that, you know, they lever

up, they issue a massive dividend, they

drain the capital, right? drain all the

capital out of the company. They're

running on um What happened if you were

actually running on uh on vapor when

COVID hit? Yeah. It's all over.

Everybody is insolvent. They're all out

of business overnight.

Okay. So, that's another way to kill the

company. You drain all your capital.

So, so what's left?

What what the heck is left? Okay. Steve

Jobs is my hero. Steve Jobs had a near a

near-death experience with his company.

Apple computer was almost, you know,

there was a point when Michael Dell told

Apple they should just give the money

back to the shareholders and shut down,

right? That's a tweet. You probably

don't like coming back.

Okay. So, Steve Jobs kept all that cash,

you know, till the day he died and they

accumulated. They didn't buy back the

stock. I would, you know, I thought

maybe I would like Micro Strategy to not

die and so I was going to keep the

capital. And by the way, so I can serve

the customers, you know, you have

nightmares of your CFO, the nightmare is

you let a customer down, right? like

some when someone actually invests $10

million in my company software and then

they build something with it and they

deploy it, you know, like you gonna go

tell them, oh, we decided not to update

the software. Let me put it a different

way. How would you feel if you put a

hund00 million into Bitcoin and then the

minor said, we're turning off the rigs

and the developer said, "We're not going

to patch the bug or upgrade and so it's

just going to stop working." Right? So

you have a you have an ethical moral

obligation to your customers. And a lot

of times these CEOs, they kind of they

kind of get cute. This the problem with

the the LBO guys. We're going to get

cute. We're going to buy I'm gonna buy

Marvel comics. I'm going to leverage it

up. Drain the capital out of it and

bankrupt Marvel. Right. Happened. Right.

Sad happened. Right. So don't want to do

that. So what can I do? I just leave the

cash in the bank and I'm I'm buying the

stock back at some rate and then along

comes COVID

and and COVID is this transformational

experience. You know Thomas Cune in the

structure of scientific revolutions

which is the seminal work on the history

of science. He wrote when the paradigm

shift comes along, right? The old guard,

you know, when we invent uh antibiotics

or or the science of sterilization or or

nuclear energy or whatever it is we

invent, the old guard rejects it. No one

accepts it until they're dead unless

there's a war.

And the one thing that'll get people to

change their mind is when they die and

their kids take over. That changes some

minds, right? Right. Yeah. And and and

the other thing that gets people to

change their mind is a war, you know,

World War II, you know, and and as as

Trosky said, you may not be interested

in war, but war is interested in you.

And when the war arrives, you all of a

sudden get interested in stuff that you

were able to ignore because it was of an

academic interest to people somewhere

else. So this year we got two wars. We

got a war on COVID and it and it and by

the way, what's the war on COVID done? I

would have fired you, Ralph, if you told

me you wanted to work from somewhere

other than my office. I you know, I

would have said, "You don't show up to

my office. You're not sitting next to

me. You don't have a job here." Last

year, I was firing people that didn't

want to come to work.

Let me tell you what happens next. COVID

hits, lockdown hits. I'm like, I'm

hating that idea. Then I got to have a

meeting. And at 9:00 a.m. in the

morning, we got a meeting and we're on

on video conferencing technology, A,

which I will not mention. And the line

drops, the sound doesn't work, there's a

warable, I blow, throw a little hissy

fit,

all my IT people scramble. Uh, by 11:00

a.m. we're on video conferencing

technology two and I got 12 executives

and we're talking blah blah blah blah

blah and two of the executives freeze

and one of them doesn't work and I throw

a second hissy fit.

by 100 p.m. they're like, "Well, you