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A company that doesn't produce anything of value get infinite P/E ratio due to Bitcoin. Compared to companies like AAPL that consistently produce products and t

A company that doesn't produce anything of value get infinite P/E ratio due to Bitcoin. Compared to companies like AAPL that consistently produce products and tools that changes the lives of millions of people with only P/E ratio of 3x (<-- this means 30 something, not 3x as in 3 times, what I really want to say is, 30 something times)something. This world already broken beyond repair.

JohnJamesRambo 6y ago
Has Apple changed lives for the better though? I’m not sure anymore. A perusal of the literature on mental health effects of technology (specifically phone) addiction would say no. There are too many studies to post as a reference and they all say the same thing.
- christiansakai 6y ago
  The keyword is "compared". Read again.
- hahla 6y ago
  Has bitcoin changed lives for the better? I'm not sure what this has in relevance to the prior comment on PE ratios?
  - rafale 6y ago
    In countries with totalitarian and/or corrupt governments, it did. Venezuela, Argentina, Russia, China, ... Even the US is testing its people trust and confidence with its aggressive money printing. Doesn't feel like free markets when there is a buyer of a last resort with infinite money.
  - JohnJamesRambo 6y ago
    It has certainly changed my life for the better. I escaped a monetary system that was set to enslave me for life.
- newsclues 6y ago
  Would cryptocurrency be as prominent and valuable as it is, without the ubiquitous technology that Apple has given us with smartphones?
hfsp 6y ago
Apple P/E is around 30, not 3. You would do well to take the time to understand why MSTR did what they did. Hint: https://www.lynalden.com/money-printing/ https://www.lynalden.com/money-printing/.
- christiansakai 6y ago
  I wrote 3x not 3, let me update my post. I already read that Lyn Alden post. Way ahead of you buddy.
  - deleted 6y ago
    [deleted]
  - hfsp 6y ago
    You are asking "why btc". You have read Lyn's post on QE - great! Here's how I view it, and I believe Saylor as well: cash loses double digit % purchasing power annually for the things you want to buy and hold. You can hold on to your melting pile of cash, or you can deploy that capital elsewhere. Art, wine, stonks, negative/0 yielding bonds, real estate, crypto kitties, or an asset that has been appreciating at a clip of 200%/yr. Question is not why btc, but why would you put yourself at a disadvantage by holding fiat reserves.
    - christiansakai 6y ago
      The question is "Why BTC".
    - runako 6y ago
      None of these are the real question as regards a publicly traded company in the business software space. The better questions are: - Why is the Company holding so much cash? Most companies do not hold 60% of their market value in cash or other assets unrelated to their core lines of business. Why is MicroStrategy making this choice? - Why will the Company not return the excess cash to shareholders instead of running an investment book on the side? - Revenue is declining in a market that is experiencing growth. Why is management focused on the minutiae of treasury management instead of fixing the core business? It's not fiat vs BTC, it's about why is the company holding so much cash in the first place?
mxschumacher 6y ago
While I share the sentiment about microstrategy, I don't follow your point on Apple. It's trading at something like 29x earnings, a market cap of $2100 billion. It's not exactly cheap.
- christiansakai 6y ago
  As I posted in the replies, the keyword is "compared".
deleted 6y ago
[deleted]
dtwest 6y ago
It's essentially a public holding company for bitcoin now. So using P/E isn't a relevant metric, try P/B, or use P/E after subtracting the bitcoin value from market cap. Your valuation methodology is as broken as the world supposedly is.
- christiansakai 6y ago
  Please explain to me in plain English. I am dumb.
  - dtwest 6y ago
    A company that owns $100 of cash and does nothing, should be worth $100. It earns $0, but is still worth $100. Therefore, its P/E would be 100/0 = infinity. MSTR is becoming sort of like that. It very well could still be overvalued, but people aren't buying it for its earnings, they are buying it for the assets it holds (bitcoin).
    - christiansakai 6y ago
      Can I create an infinite energy money machine by doing this: BTC is held by MSTR, MSTR is held by ABC, ABC is held by FGE, FGE is held by XYZ? Eventually all companies hold it, and SP500 will be BTCPrice * 500. Everyone is rich. It's just a matter of time before it goes to the whole market. Everyone is rich.
      - dtwest 6y ago
        Nope can't do that. MSTR might trade at a premium to its BTC holdings but only because at the moment it allows people to buy BTC through more traditional investment accounts. Your hypothetical ABC wouldn't have any advantage over MSTR so it would trade at parity. I'm really not trying to be pro or anti BTC/MSTR here, just explaining whats going on. It's valid to think it's stupid/overvalued, but I'm just pointing out that its P/E ratio isn't the reason. And comparing MSTR's P/E to Apple's doesn't really make sense at face value.

JohnJamesRambo 6y ago

Has Apple changed lives for the better though? I’m not sure anymore. A perusal of the literature on mental health effects of technology (specifically phone) addiction would say no. There are too many studies to post as a reference and they all say the same thing.

christiansakai 6y ago
The keyword is "compared". Read again.
hahla 6y ago
Has bitcoin changed lives for the better? I'm not sure what this has in relevance to the prior comment on PE ratios?
- rafale 6y ago
  In countries with totalitarian and/or corrupt governments, it did. Venezuela, Argentina, Russia, China, ... Even the US is testing its people trust and confidence with its aggressive money printing. Doesn't feel like free markets when there is a buyer of a last resort with infinite money.
- JohnJamesRambo 6y ago
  It has certainly changed my life for the better. I escaped a monetary system that was set to enslave me for life.
newsclues 6y ago
Would cryptocurrency be as prominent and valuable as it is, without the ubiquitous technology that Apple has given us with smartphones?

hfsp 6y ago

Apple P/E is around 30, not 3. You would do well to take the time to understand why MSTR did what they did. Hint: https://www.lynalden.com/money-printing/ https://www.lynalden.com/money-printing/.

christiansakai 6y ago
I wrote 3x not 3, let me update my post. I already read that Lyn Alden post. Way ahead of you buddy.
- deleted 6y ago
  [deleted]
- hfsp 6y ago
  You are asking "why btc". You have read Lyn's post on QE - great! Here's how I view it, and I believe Saylor as well: cash loses double digit % purchasing power annually for the things you want to buy and hold. You can hold on to your melting pile of cash, or you can deploy that capital elsewhere. Art, wine, stonks, negative/0 yielding bonds, real estate, crypto kitties, or an asset that has been appreciating at a clip of 200%/yr. Question is not why btc, but why would you put yourself at a disadvantage by holding fiat reserves.
  - christiansakai 6y ago
    The question is "Why BTC".
  - runako 6y ago
    None of these are the real question as regards a publicly traded company in the business software space. The better questions are: - Why is the Company holding so much cash? Most companies do not hold 60% of their market value in cash or other assets unrelated to their core lines of business. Why is MicroStrategy making this choice? - Why will the Company not return the excess cash to shareholders instead of running an investment book on the side? - Revenue is declining in a market that is experiencing growth. Why is management focused on the minutiae of treasury management instead of fixing the core business? It's not fiat vs BTC, it's about why is the company holding so much cash in the first place?

mxschumacher 6y ago

While I share the sentiment about microstrategy, I don't follow your point on Apple. It's trading at something like 29x earnings, a market cap of $2100 billion. It's not exactly cheap.

christiansakai 6y ago
As I posted in the replies, the keyword is "compared".

deleted 6y ago

[deleted]

dtwest 6y ago

It's essentially a public holding company for bitcoin now. So using P/E isn't a relevant metric, try P/B, or use P/E after subtracting the bitcoin value from market cap. Your valuation methodology is as broken as the world supposedly is.

christiansakai 6y ago
Please explain to me in plain English. I am dumb.
- dtwest 6y ago
  A company that owns $100 of cash and does nothing, should be worth $100. It earns $0, but is still worth $100. Therefore, its P/E would be 100/0 = infinity. MSTR is becoming sort of like that. It very well could still be overvalued, but people aren't buying it for its earnings, they are buying it for the assets it holds (bitcoin).
  - christiansakai 6y ago
    Can I create an infinite energy money machine by doing this: BTC is held by MSTR, MSTR is held by ABC, ABC is held by FGE, FGE is held by XYZ? Eventually all companies hold it, and SP500 will be BTCPrice * 500. Everyone is rich. It's just a matter of time before it goes to the whole market. Everyone is rich.
    - dtwest 6y ago
      Nope can't do that. MSTR might trade at a premium to its BTC holdings but only because at the moment it allows people to buy BTC through more traditional investment accounts. Your hypothetical ABC wouldn't have any advantage over MSTR so it would trade at parity. I'm really not trying to be pro or anti BTC/MSTR here, just explaining whats going on. It's valid to think it's stupid/overvalued, but I'm just pointing out that its P/E ratio isn't the reason. And comparing MSTR's P/E to Apple's doesn't really make sense at face value.