October2024 - $MSTR | Microstrategy is Modern Berkeshire Hathway

Microstrategy is a modern version of Berkshire Hathway

Microstrategy is a modern version of Berkshire Hathway by accumulating Bitcoins instead of premium equity stocks

Parallels between the two

MicroStrategy’s modern parallel to Berkshire Hathaway hinges on the strategic accumulation of Bitcoin rather than traditional equities, embodying a long-term investment thesis akin to Buffett’s philosophy but adapted for the digital age.

At its core, both companies leverage a concentrated investment strategy. Berkshire Hathaway amasses premium equity stocks in companies with strong fundamentals and enduring competitive advantages, expecting these investments to compound value over time. MicroStrategy, on the other hand, has positioned Bitcoin as its primary asset, viewing it not merely as a cryptocurrency but as digital gold—a store of value with potential for significant appreciation over the long term.

Given the holding period of the underlying asset either Bitcoin or Equities if expected to be “FOREVER”

The rationale behind holding Bitcoin “forever” mirrors Buffett’s advocacy for holding stocks indefinitely. This strategy minimizes transaction costs and exploits the compound growth effect. Bitcoin’s deflationary model, with a capped supply, theoretically ensures increasing scarcity and value over time, similar to how Berkshire’s stocks in companies like Apple or Coca-Cola have appreciated due to brand strength and market dominance.

However, while Berkshire’s diversified portfolio spreads risk across various sectors, MicroStrategy’s bet on Bitcoin introduces higher volatility but also potentially higher returns due to the nascent stage of cryptocurrency markets. Both strategies bet on the longevity and increasing value of their chosen assets, albeit in different economic forms, showcasing a philosophical convergence in investment strategy adapted to different asset classes.