Weekend Reading #49
Photo by Joshua Coleman on Unsplash
This is the forty-ninth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 4th January 2020. To receive a copy each week directly into your inbox, sign up here.
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What we're doing.
First, we want to take the opportunity to wish you a very Happy New Year and a peaceful and productive start to 2020. We hope to see and hear more of you in the coming year, so please don’t hesitate to get in touch with any thoughts on our newsletter. We are always learning (and hopefully) growing, and your feedback is precious to us.
Over the past couple of weeks we took some time out to rest and recharge over the festive season. Turns out this involves rather a lot of eating! Without wanting to succumb to cliché, January is going to involve a massive health drive from everyone at TBC, with a clear out of the office fridge first on the list! The last remaining vestiges of our office party will be giving way to fruit and lean protein but don’t worry, we will continue to guzzle gratuitous amounts of coffee (and in Eugene’s case, hot chocolate). Please get in touch with your wellness tips so that we can incorporate them into our approach – provided they don’t involve taking on mini-triathlons before breakfast!
What we're watching.
As you might imagine, the TV has got a good work out in recent days.
We started watching Netflix’s Medal Of Honour on a whim, but it’s now a staple. The show is a hybrid docu/live-action anthology series that portrays stories of personal sacrifice that resulted in America’s highest military distinction: the Medal of Honor. It’s full of triumph and disaster, offering an unflinching look at the cost of war on a personal and familial level. The dramatisations of the action are masterfully executed, too, placing you at the centre of the stories. Our favourite episode so far is the one that covers Edward Carter, a US Army sergeant relegated to the rank of private due to institutional racism in WWII. Carter was wounded in action during World War II and posthumously awarded the Medal of Honor for his actions taking out an enemy stronghold on March 23, 1945, near Speyer in Germany.
We also finally got around to watching The Purge. Yes, we’re a little late to the party, and honestly speaking, we were a little hesitant to check out this world because the marketing has been so intimidating and unsettling. But seeing that the first movie in the franchise had dropped on Amazon Prime, we dipped a toe and found it to be compelling stuff.
The films (all four of them) are set in a near-future dystopian America which observes a national holiday known as The Purge, in which all crimes, including murder are legal for a 12-hour period. The storytelling and dialogue is a little derivative, but the strength of the concept carries the whole thing home. The franchise has grossed close to $450 million against a combined production budget of $35 million, so it must be doing something right. That something is “high concept” theatre, an immersive world that forces us to ask troubling questions about inequality in contemporary society – and what we’d do if the unthinkable happened to us.
What we're reading.
Most importantly, we’ve almost completed our fund PPM, which is the legal document governing the terms around subscriptions to our fund. It’s 88 pages of mostly legal text, a tough read, but important. One striking thing is how antiquated the default text is, for example, suggesting that political risks/instability and natural disasters are only “emerging market” phenomena. Most investors (and most managers) don’t bother to even check their PPM – understandably so. It’s a pain to read, but they should. We can’t make the PPM interesting to read, but we might try to put in a summary that’s at least palatable to the everyday reader in front of it – if our lawyers allow it!
Long, lazy days in front of a roaring fire (or looking after screaming children) call for one thing, and that’s P.G. Wodehouse. We spent the holiday season reconnecting with a childhood favourite, Jeeves. Reginald Jeeves (referred to as simply Jeeves), is a fictional character in a series of comedic short stories and novels by Wodehouse set in 1920s and 30s London and New York. Jeeves is the highly competent valet of a wealthy and idle young Londoner named Bertie Wooster. The stories of the pair’s exploits are short, sharp and at times, painfully funny, offering an escape from prosaic everyday life into a world of leisure, relaxation, fun and pure silliness. Think of them as a tonic for the soul. There are 35 short stories and 11 novels to choose from, so if you’re not sure where to begin, check out this handy blog post.
Away from the refined world of aristocratic London, we read this piece from The Bitcoin Times. It argues with some conviction that, “Bitcoin is first and foremost a monetary phenomenon. The social climbers and false prophets who proclaimed it is a payments revolution have either come around or been repudiated by the market and washed out, embittered [...] The world did not need another Paypal. The world needed a new monetary institution.” The piece is interesting not because we agree entirely with it or not but rather because it illustrates there is an entire group of people who think very differently to the system as we know it. Many rush to compare it to gold. In our view it is very early and there are many different paths it could take. Yet the possibility that it grows into that over time is what makes it such an interesting instrument to learn about and monitor.
This tweet from Binance’s founder CZ also captured our attention – and our imagination:
“You don't need to predict the future to win. The trick is to be ready for a number of probable futures and react quickly when they happen.”
For a moment, we thought this had been lifted from our website! Multiple paths is something we keep at the very top of our minds here at Three Body Capital – it informs our thinking (and doing) across all branches of our business. The clue’s in the name...
Another tweet (this time from The Long View) also raised a wry smile following our recent deep dive into the rise of passive investing and its implications for active managers:
“Six asset managers control 92% of all ETF assets. The others—all 118 of them—are fighting over 8% of the assets. The top two, BlackRock and Vanguard, manage two out of every three ETF dollars in the U.S.”
This is a staggering insight into the success of the leading passive investment houses, the structure of the passive market, and the concentration of risk in our financial system.
And if you’re looking for some inspiration whilst you figure out your priorities (and perhaps even some resolutions) for 2020 check out this blog post from Morgan Housel on 10 big ideas that have changed how he thinks and drives most of what he believes. This piece got us thinking about the ideas that drive us – keep your eyes peeled for some thoughts on this in the coming weeks.
On a lighter note we just finished reading a breathtaking thriller called Moskva by Jack Grimwood. Many historical novels are either educational or real page turners but rarely both. This one was relentlessly paced and we literally couldn't put it down. It takes place in 1980s Moscow and by the end we were both entertained and far more knowledgeable about one of our favourite places.
What we're listening to.
We’re lifelong fans of BBC Radio 4’s Desert Island Discs, and this episode with Stephen Merchant is a corker. Merchant first came to fame with the TV sitcom The Office, which he co-wrote and co-directed with Ricky Gervais. He continued to work with Gervais on the series Extras, Life is Short and An Idiot Abroad. His comedy hero as a young man was John Cleese – and from the looks of his song choices, he’s clearly a Springsteen fan, which earns him extra brownie points in our eyes!
We’ve also been listening to a new book on Audible. The Courage To Be Disliked is not your average self-help tome – it takes the form of a conversation between a philosopher and a cynical youth struggling with self-acceptance. What you get is a deep and at times uncomfortable discussion of what it means to be a member of society. The book uses the theories of Alfred Adler, one of the three giants of 19th Century psychology alongside Freud and Jung, to explain how we can determine our own future – free of the shackles of past experiences, doubts and the expectations of others.