Weekend Reading #51
Photo by Jason Wong on Unsplash
This is the fifty-first weekly edition of our newsletter, Weekend Reading, sent out on Saturday 18th January 2020. To receive a copy each week directly into your inbox, sign up here.
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What we're doing.
As another week draws to a close, we’re feeling tired, happy and above all, excited about what 2020 holds for our business. The coolest thing about Three Body Capital is that it’s given us a platform to connect with pretty much anybody we want to. We see this as a huge privilege. Only two weeks of the new decade have passed and already we’ve had the good fortune to meet with many interesting, smart and memorable people. To be honest, it doesn’t feel like work.
This week we spent time thinking about our marketing strategy for 3BC, our online deal platform for professional investors in private markets. You’ll be hearing more and more about this venture in the weeks and months ahead, as we launch the platform and build deal pipeline for our global network of investors. And hopefully, you’ll be seeing more of us too. This weekly newsletter is fantastic and great fun to put together, but there is no substitute for meeting face-to-face. In Q1 we plan to visit Indonesia, Singapore, Turkey and South Africa. So please get in touch if you fancy meeting up, catching up and sharing ideas.
What we're reading.
We also picked up a copy of an obscure but brilliant work of comic fiction. Don't Point That Thing at Me: The First Charlie Mortdecai Novel. It was first published in 1973 but didn’t gain any traction at that time. Recently, it’s become something of an unlikely hit, having been adapted into a (apparently terrible) film starring Johnny Depp. The chief protagonist, Charlie Mortdecai, is a somewhat tenuous member of the British aristocracy who doubles as an amoral art dealer with a penchant for crime. This reminded us of P G Wodehouse (another Three Body Capital favourite) and George Macdonald Fraser in its light touch and luxurious comedic style. Indeed, Penguin is pitching it as “part Ian Fleming, part P G Wodehouse”. It’s actually difficult to tell whether this is a thriller, a comedy or just good old satire. Either way, it’s a heck of a lot of fun!
The FT this week was seemingly dominated by articles exploring the rise of passive management and its implications for markets. No fewer than four pieces were published, here, here, here, and here). You have to wonder if these journos have been reading this newsletter!
Whilst thumbing through the FT we also spotted this somewhat worrying article on stock option financing, which is now very much a thing. We all know that many privately listed technology companies are choosing to stay private for longer in order to avoid the scrutiny of public markets. But now employees of these outfits are seeking to cash in their shares without waiting for IPO. So, startups and hedge funds are teaming up to provide financing in exchange for proceeds from future share. This is both very smart, and very risky.
And Matthew Ball is at it again, this time with an article tantalisingly entitled, “The Metaverse: What It Is, Where to Find it, Who Will Build It, and Fortnite”. In this piece, he observes that the Metaverse has become the newest macro-goal for many of the world’s tech giants – including Epic Games (the maker of the Unreal Engine and Fortnite) and Facebook – and that tens of billions will be spent on cloud gaming over the next decade based on the belief that such technologies will underpin our online-offline future. Read this if you’re interested in the future of everything.
What we're watching.
First of all, here’s what we didn’t watch this week: The Gamechangers. Everyone is talking about this Netflix documentary about the benefits of plant-based eating for athletes (and by implication, the rest of us). It follows former UFC fighter James Wilks who, while recovering from an injury, researches nutrition, and travels the world to discuss his findings with elite athletes who follow plant-based diets. Plant-based eating, veganism, whatever you want to call it, is a huge narrative that is only going to get bigger. So this is certainly on our shortlist of things to watch in January. Just don’t expect us to give up our beloved Five Guys any time soon!
One thing we did watch was this short documentary film from Vice about the legendary Wim Hof. "The Iceman", as he is known, is a Dutch extreme athlete renowned for his ability to withstand freezing temperatures. He attributes his incredible feats of endurance to his “Wim Hof Method”, a combination of frequent cold exposure, breathing techniques and meditation. Now that one of the TBC team has started incorporating these techniques into his exercise regime (bet you can’t guess who?), we felt duty bound to investigate. And what we learned was actually pretty cool. Watch the film and you might just surprise yourself.
What we're listening to.
Desert Island Discs with Michael Lewis is a must listen. Lewis is a best-selling non-fiction writer and journalist. He started his career in the fixed-income department of Saloman Brothers back in the 1980s, before leaving to write about his experiences of working on Wall Street. Three of his later books – Moneyball, The Blind Side and The Big Short – have been adapted into Hollywood feature films. This is a brilliant half hour of entertainment. Give it a go.
What we’re writing.
Our New Year's Resolution.
Tomorrow is a significant day.
Data from the world’s most popular activity tracking app suggests that 19th January has the dubious honour of being the day when most New Year’s resolutions will be abandoned. Strava is trying to brand it “Quitters Day” to drive downloads of their product, but to most fund managers this is nothing new – it’s just another example of mean reversion at play in our lives.
Regardless of how you feel about New Year’s resolutions, they are very much a feature of office life in January. Everywhere we look people are eating healthily, avoiding alcohol, hitting the gym and generally indulging in wholesome and (in some cases), completely unsustainable activities. We’re all secretly excited about our very own Three Body Capital Quitter’s Day, likely sometime in early February, when we will inevitably gather around the table at Five Guys Camden for burgers, fries, milkshakes and other delicious, mega-calorie victuals that nobody seems to eat in January.
In recent weeks, the internet has exploded with articles promising to “level up your life”, “unleash your potential” and a bunch of other irresistible promises. Self-help is a fully fledged industry, and the January onslaught of good intentions is just the tip of the iceberg. In 2017, the self-help market was worth $9.9 billion in the US alone, with a projected average annual growth rate of 5.6%. With the proliferation of digital platforms, it has expanded from paperbacks and cheesy conferences to websites, apps and streaming services. This stuff is literally everywhere, and (almost) everyone is now a self-helper, despite the somewhat paradoxical nature of the exercise:
“If you’re looking for self-help, why would you read a book written by somebody else? That’s not self-help. That’s help! There’s no such a thing as self-help. If you did it yourself, you didn’t need help.”
– George Carlin
Semantics aside, it’s easy to get lost in the flood of ideologies, life hacks and mental models that swirl around us as we go about our everyday lives. With so many ideas and techniques available to us, how do we move forward and actually execute on our promise? How can we fulfil our potential as investment managers and human beings in the months and years ahead?
Here’s how.