Operation Saylor - Episode 31/120

Hi again and welcome to another episode of the Operation Saylor. This is update number 31, corresponding to January 2025.

If you are reading this for first time, you might want to check Episode 1, where my plan and details are explained. That will get you in context.

Hello again and welcome to another episode of the series. I hope you had a great start of the year. Operation Saylor certainly had one.

As I mentioned in the last episode, today I want to share some thoughts on the question of whether now is a good time to start an Operation like this one and my own thoughts on borrowing again to buy more Bitcoin.

I'll begin with two simple, axiomatic ideas: the first one is that market timing doesn't work. The same reasons that lead veterans to believe that we should simply buy with our monthly income, and that it doesn't make sense to time our purchases, apply just the same when buying with borrowed money. Timing is timing, no matter where the fiat shitcoin springs from.

The second idea is that nothing has changed regarding the case for Operation Saylor. The Speculative Attack still makes sense: Bitcoin is still supply capped, fiat keeps on getting printed, inflation keeps on ravaging. The same root causes that justified calling this Operation a strategy, and not simply a gamble, apply today just like they did back in July 2022.

Just with these couple ideas, you are probably getting where I'm going: yes, I do believe it makes sense to borrow money to buy Bitcoin today (CC @ek, #823734). Simply because, generally, it always makes sense. Just like we throw a tender grin at the noobies which ask on reddit: "I'm thinking about DCA 50$ a week into Bitcoin. Is now a good time to start?", I believe we should also realise ourselves how there is no such thing as a bad time to borrow fiat to buy Bitcoin.

Having settled the question, there's also a couple more angles I can add to support the idea of going for it.

One I love is that repeateadly borrowing and investing at multiple points in time reduces the volatility of your performance and makes the probability of a positive result higher (assuming Bitcoin goes up more than it goes down long term, that is). It works just like with DCA: by having multiple entrypoints, you grab some good and some bad, which softens outcomes. A way to visualize is that, if you believe Bitcoin will go up long term always, taking a chance at this is like tossing a coin, where the good outcome has a success probability higher than 50%. You can throw it just once and get lucky/unlucky, but if you throw it multiple times, you will inevitably gravitate towards the usually positive outcome.

Another angle is that risk decreases as time passes and Bitcoin climbs up the price ladder, so it makes sense to lever it up again a notch by borrowing more (assuming you're still happy with the same level of risk you had when you started out). The current state of Operation Saylor is a good example: when I started out, the relative weight of my liability to the bank in my personal balance sheet was much heavier than it is today, thanks to the positive return of the Operation itself. Is the same thing that's happening with Microstrategy since the bull run started: price goes up, debt to equity goes down, and so there's more margin to go long to the tits since the balance sheet looks stronger and stronger. I think a good way to manage this is to have a target value for the debt to equity ratio and try to stick around it. If for instance, you go for 25% (you are happy taking 25 cents of debt for every dollar of assets you have), then you stay put when you're above that value, and consider taking more debt on as the value dips below 25%.

I want to clarify that, if I take or have taken more loans, you won't see it reported here. I'm happy performing a bit of financial nudism here for the sake of sharing and discussing, but it has never been my goal to integrally reveal all I do. So keep in mind, even if you don't see more loans, that it might make sense to take more loans.

With that and the sweet feeling of having an unrealized profit of a 100K, I'll leave it here for today. As always, thanks for reading and I'll see you next month.