MAD Macro - Buyers Live Higher
Michael Saylor Buys More Bitcoin, Issues More Stock
Who Would You Vote For in 2028?
Michael Saylor made another large purchase of bitcoin during the month of November. He paid an average price of 36,700 for $590 million of bitcoin. His last big purchase was in February 2021 when he bought about $1 billion at an average price around 50,000. In fairness to Michael, his total holdings have an average cost of 30,250 and a value around $5.2 billion. So at bitcoin 38,000 he has a profit of more than $1 billion. But he keeps raising his average price. As VanEck’s Charlie Cameron likes to say, “buyers live higher”. MicroStrategy and Michael Saylor have an interesting strategy. Issue stock and buy bitcoin, KISS (Keep It Simple Stupid). MicroStrategy has a mark-to-market profit of about $1 billion after issuing stock, borrowing money, and leveraging the balance sheet to buy bitcoin for five years. At least it’s easy to understand. I believe bitcoin is taxed as a collectable because it’s considered a commodity. Collectables have a tax rate of 28% if held for a year. We know Michael will never sell, but when he does there is a tax bill to pay.
Last night FOX news held a debate for the 2028 U.S. presidential election. You need to give them credit for being forward thinking. If only the Tin Man and the Orange Monster would debate each other. That would be fun and sad. I am guessing that never happens, which will be strange. Somehow next year’s election will be between two people that roughly 70% of the population actually hate. No debates, just hold your nose and vote. No wonder consumer sentiment is so low.
Markets are a little lower this morning after a choppy trading day yesterday that finished near the highs. November was a kick ass month for the markets. The better than expected CPI was the main event and triggered the new investment theme, the Fed is done. The DOW made news highs for the year yesterday.
I added an interesting chart of FDI (Foreign Direct Investment) into China, today. I wonder if Xi thinks this is a good thing? I updated the U.S. Dollar Index, U.S. 2yr yield, U.S. 10yr yield, U.S. 10yr-2yr yield spread, WTI crude oil, spot gold, spot gold weekly, bitcoin, bitcoin long-term, S&P cash, NASDAQ 100 cash and the DOW cash charts below.
The U.S. dollar is retesting the break of the 200 day average. Interest rates are a little higher over the last two days and the curve continues to steepen.
OPEC agreed to cut production by another 1 million barrels through Q1 2024. Interestingly they have invited Brazil to join OPEC+. I continue to believe this is a great price to buy crude oil. I think there is plenty of good price support from $67 to $72. Gold is unchanged and bitcoin is higher on the Michael Saylor buying and optimism over a possible SEC bitcoin ETF approval.
I included some long-term cash charts today of the S&P, NASDAQ 100 and DOW for perspective.
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Unless otherwise stated, Bloomberg is the source of all data and charts.
S&P 500 futures are a type of derivative contract that provides a buyer with an investment priced based on the expectation of the S&P 500 Index’s future value. Nasdaq 100 futures are commodities futures products traded within the equity futures sector. West Texas Intermediate (WTI) oil is a benchmark used by oil markets, representing oil produced in the U.S. Brent Crude Oil is a blend of crude oil recovered from the North Sea in the early 1960s, whose price is used as a benchmark for the commodity's prices. The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners. UBS Bloomberg Constant Maturity Commodity Index is a total return rules-based composite benchmark index diversified across commodity components from within specific sectors.
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