Berkshire Hathaway's $325 billion cash reserve is losing $32 billion a year, Michael Saylor said, and claimed he could convince Warren Buffett to accept bitcoin.
Michael Saylor, co-founder and CEO of Microstrategy (MSTR), criticized Berkshire Hathaway's cash management strategy in an interview on the PBD Podcast. He argued that Berkshire's $325 billion cash reserve is causing significant losses for shareholders, with a maximum after-tax return of only 3%, while the cost of capital is up to 15%. The result is a real rate of return of -12%, leading to a loss of $32 billion in shareholder value per year. Saylor stated:
"That $325 billion is costing $32 billion a year. They're losing $3 billion a month in capital."
Microstrategy, under Saylor's leadership, has strongly advocated the use of bitcoin as a reserve asset. He argues that BTC offers unique benefits, such as protection against inflation and currency devaluation, and encourages companies with excess cash reserves to consider bitcoin as part of their financial strategy. However, he also acknowledges that each business has its own financial goals, risk tolerance, and regulatory factors, so a one-size-fits-all recommendation is not possible.
Rather than recommending a single approach, Microstrategy sees the use of bitcoin as a case study on how a forward-looking financial strategy can be applied in modern companies. Microstrategy has actively accumulated 386,700 BTC according to the latest announcement.
Saylor also believes that even traditional investors like Warren Buffett could be convinced of the value of BTC. He shared in the podcast:
"I bet that if I had an hour alone with Buffett in a quiet space, when I walked out, he'd say, 'Bitcoin is really something to consider.' Charlie Munger (if he were still alive) would agree. We'd buy a little bit."
The CEO of Microstrategy continued to criticize individuals and organizations holding large cash reserves without exploring alternatives like bitcoin. "I'm ready to meet anyone with $100 billion in cash that's losing $10 billion in shareholder value per year. I'll come visit you and provide all the information necessary to convince you that it's time to switch to the Bitcoin Standard," Saylor emphasized, expressing his strong belief in bitcoin as a superior asset to protect and grow asset value.
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