Investing General Discussion
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Sanrith Descartes
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TOPT (the S&P 25) hit its low from when the ETF was created in Nov of 24 right around the election. Pushed the rest of my free cash in my main account on it. So the top 25 of the S&P is at its Nov election low.
My smaller accounts have cash still waiting for price points on AMZN and JPM and then I will be basically 100% invested.
My smaller accounts have cash still waiting for price points on AMZN and JPM and then I will be basically 100% invested.
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Zzen
Potato del Grande
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PTJ says let your winners run brother.
Also, I don't want to shit up this thread, but I am more interested in the opinions of investors rather than crypto bros (no offense). I am thinking about allocating up to 10% of my long-term portfolio to BTC. It feels like the time to get long is after Saylor gets washed out. He has been begging for Marge to call, and the market might give him what he has been asking for.
I have seen this this idea discussed by a few people I respect, but this does not seem to be consensus. Is it too obvious?
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Blazin
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I don't think you understand MSTR financial situation if this what you're looking for. MSTR stock could get clobbered but being forced to sell bitcoin is not a reasonable position. If you are getting this hogwash from social media do yourself a favor and block whoever it is spouting it.
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Zzen
Potato del Grande
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Fair enough. Fintwit is a cesspool, but I thought I had become better at filtering it. Bonk with the
Probably just DCAing to establish a position is the right move, if I decide to allocate anything towards it. Still have a couple of months-ish to see what type of new money I will have to invest. Just trying to learn.
Jysin
Ahn'Qiraj Raider
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I am an absolute Bitcoin noob, so forgive the question, but...
Isn't MSTR cost basis on Bitcoin at $62k? And the whole business is make new shares to dilute stock and raise more cash, which buys more Bitcoin? What happens if the price gets pushed below their cost basis? They have taken loans as well in the past if I am not mistaken. This deleveraging event should they get their cost basis blown out is what I understand the concerns to be.
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I have no idea what this is about, it barely looks like English.
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Sanrith Descartes
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It happened in the past when BTC was touching the high teens. They were below cost basis at the time. MSTR doesn't have to deleverage as long as they have people willing to give/loan them cash to provide them liquidity. I believe this is what happened the last time. Of course, I could totally be misremembering it.
Sanrith Descartes
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Flobee
Vyemm Raider
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MSTR didn't borrow against the BTC. They don't have a liquidation price in the normal sense. Bonds are written as convertible into MSTR stock and they're mostly 0% interest. I'm not going to pretend to deeply understand the plumbing but essentially volatility of the bonds is moved into MSTR while the bond maintains some % of the upside price movement of BTC/MSTR.
MSTR as a result has significantly higher volatility which I guess some type of trader really wants. Whether its upside or downside volatility. Some options stuff as I understand it. Creates demand for the stock.
He's selling leveraged BTC volatility to traders in the traditional market trying to hedge and selling derisked upside price movement to the fixed income market. They are happy to buy for 0%. Best performing bonds by a mile. Its why theyre always over subscribed when offered.
I've seen the number $13k thrown around for when MSTR is in trouble, but as I understand it their leverage is incredibly low of the trade overall. Also worth noting that the original MSTR business is cashflow positive and has been for a long time.
There are a bunch of podcasts out there explaining all of this far better than I can. Wouldn't recommend anyone bet against it until they understand it. Very few seem to.
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Blazin
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There would be no risk if Bitcoin drops below their cost basis, in the near term anyway. So from 2029-2032 if the price os MSTR is not higher than the conversion price then MSTR would owe the principal. To repay that MSTR would have to dilute shareholders, the debt is not secured by the bitcoin, the bondholder has no claim to it directly. They do have some "regular" debt and I believe there would be some stress around $10k price in bitcoin. This is an extremely common misconception right now that people think Saylors world blows up if BTC drops below 67 it has little to no impact at all in regards to solvency/obligations.
What it does do is reduce his ability to get new converts and buy more BTC. The strategy grows with a rising price. Nobody wants converts on a declining share price.
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I still barely understand how what you originally posted could be translated into this explanation.
Can you dial down the jargon and reference-less posts? If for no other reason than the last tattered vestiges of my sanity? Thanks
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