DOES STRC REALLY HAVE THE BEST RISK ADJUSTED RETURN? Recently, Michael Saylor claimed that STRC can have a Sharpe Ratio of 3, 4, or even 5. They say, "Don't Trust, Verify", so I calculated the Sharpe Ratio myself...

He cracked the code.

this is on the border of financial malpractice. you cannot meaningfully compare the Sharpe Ratio or volatility adjusted returns of something that is supposed to be pegged to a par value, vs a linear asset like S&P 500 ETF. the former is not supposed to have any volatility at all. if it does have volatility, that means the market is pricing in literal failure (bankruptcy) of the scheme. and in that case, volatility of STRC would be increasing at a much faster rate than other assets. in a slightly different probabilistic outcome, TSLA or NVDA might've dropped 15% instead of 10%. while STRC would've dropped 70% instead of 10%.

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11.5% strips the Vol, and pays one hell of a dividend. #STRC

@saylor Also the only one that has no cash flow to pay it.

@saylor $STRC your Income. 🟧 Stay Charged.

Nice commentary, but I will challenge the premise that a Sharpe Ratio is a measure of risk adjusted return. In reality, it is a measure of volatility adjusted return. Risk and volatility are not the same. Either way, a high volatility adjusted return is still noteworthy and STRC is a game changer.

The Sharpe Ratio answer depends entirely on which returns you feed in. Model on coupon-only cash flows and volatility is near zero - that's how you get 3+. Include market price movement of STRC itself and the number drops significantly. Both are technically correct, just measuring different things.

Super helpful explanation! Thank you!

@saylor Bonze-scam

What’s the sharp ratio for strc now?

Love this post :)

@saylor Sharpe on a token that launched 2 months ago is mostly just volatility theater. 3 year trailing data or it didnt happen.

@saylor Prepare your gentle parts to be stretched next few months.

@saylor

@saylor His shitstock down continuously 9 months straight ... don't support that mdrfkr... 🖕🏽🖕🏽🖕🏽🖕🏽

"Excluding the periods it didnt work, it always works!"

@saylor STRC is designed for when BTC is going sideways. It’s not made for BTC going straight up or down. So for now, it’s great. Once the bull returns, It will suffer from capital flight

Strc is part of the mstr ETF fee.

@grok are there any holes in his arguments?

The biggest threat to strc is the usd collapsing

@saylor Xom

@saylor Great explanation of the Sharpe ratio with real world examples. Well done.

prediction markets already priced this in. try to keep up. 🐺

@saylor let’s get it homie

@saylor Does this video show the chart of trailing sharpe ratio for a non biased view? Or cherry picking the non volatile weeks?

@saylor

Actually, Ronald Reagan said "Trust, but verify", but your point is valid!

@saylor You can’t say a Sharpe Ratio is a legit metric on an asset that’s less than year old. Say what it really is - A “Low Junk” Single B- Uncollateralized Preferred Equity.

Loving all the great content, Mike. I'd love to get you on the pod next month and dig into your story! Shoot me a DM. 😎

Based.

@saylor Only fools buy STRC over bitcoin