Weekend Reading #96
Photo by Jenny Kalahar on Unsplash
This is the ninety-sixth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 5th December 2020.
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What we're doing.
We continue to grow 3BC’s partner network, further enhancing our ability to reach and engage large numbers of investors. We are really enjoying working with partners to understand what makes investors tick, and target deals accordingly, and we’re looking forward to building out the functionality of our platform to enable us to provide more targeted recommendations based on user analytics. The “Netflix of private deals” might sound a little hyperbolic, but our endgame is to emulate that level of algorithmic personalisation, with a human layer to facilitate monetisation.
It was a rip-roaring week in the markets pretty much everywhere, and we were kept well entertained all the way through it. Many of the themes we have previously written about continued to manifest and gain momentum as the bull market continued apace.
What we're thinking.
This week we’ve been thinking a lot about Disney. When the Coronavirus hit there were many doomsday predictions about how the closures of the largest generator of operating profit, theme parks, would lead to extremely tough times for Disney and its stock price. But the best businesses in the world adapt, and they do so fast. The power of Disney is in its IP. The evolution of virtual worlds like Fortnite in addition to the success of Disney Plus have shown the enduring appeal of the brand. This week’s all time high share price is a celebration of that. It’s also no coincidence it coincided with the appearance of Marvel character, Galactus, inside Fortnite for an event which attracted a record 15.3m concurrent players. A few days later, Fortnite followed up with a special offer to unlock Star Wars series character, The Mandalorian, as a bonus for signing up to the new season. Few could have imagined this type of IP manifestation even a few short years ago, but it turns out that 3 years shy of its 100th anniversary, Disney has many stories yet to tell.
We continue to spend a lot of time (probably too much time) on Zoom. We’ve noticed that more and more people are using filters to obscure the background of their home office / spare room / kitchen, and we don’t judge – we just think it’s a shame.
Seeing where someone is calling from has a huge impact on the atmosphere of the conversation and helps to build rapport. If your house is a mess because your children have gone berserk, we don’t care! If you’re calling from your bedroom because it’s the only place you can find some peace and quiet, we don’t care! And you’re sitting in your gym kit because you just came back from a much-needed run, we definitely don’t care! Lockdown hasn’t been easy on anyone, but one of the benefits of this whole experience has been a refreshing pause in the formality that has traditionally accompanied the business of finance. Let’s keep it that way.
We have also been thinking about discipline. Like Charles Poliquin, the famous fitness coach, we believe that self-discipline is overrated.
This might sound counter-intuitive but hear us out – if you have to force yourself to do things, it’s a sign that you are not doing the right things in the first place. We believe that leading a fulfilling and successful life is about being honest with yourself and pouring your energy into relationships and activities that feel right. In other words, the greatest work you can do shouldn’t feel like work.
This week we have also been fascinated by the continued success of Twitter tech growth stock accounts. While this may seem obvious in a market where everything is going up, our attention has been drawn to the tone of many of these accounts. We have written before about how social media influencers are taking the western world by storm (after already having taken China by storm) and how this applies more and more to the world of financial markets. When you see “growth investor” twitter accounts promoting a bouquet of retail favourite tech performers and boasting of hundreds of percent of performance, you realise they are targeting a retail base who is lapping it all up and has the means to trade like never before. You have to question how deep into the frenzy we are. The performance of many of these influencers is impressive, but a dash of humility would serve them well. Despite what many have recently become accustomed to, markets do go down every now and then too. Usually when you are least expecting it!
What we're reading.
This week saw the latest extraordinary achievement of Alphabet’s AI genius, Deepmind, in which its Alphafold AI system solved the 50-year-old problem of predicting how a protein folds into a 3D shape.This achievement came around way earlier than most were expecting. This is an incredibly exciting development, and the scientific implications are immense not so much in this exact discovery (which is indeed significant) but in that yet again it is an illustration of the power of machine learning and its growing applications to solving what are even today thought of as unsolvable real-world problems.
“We have been stuck on this one problem – how do proteins fold up – for nearly 50 years. To see DeepMind produce a solution for this, having worked personally on this problem for so long and after so many stops and starts, wondering if we’d ever get there, is a very special moment.”
– Professor John Moult, Co-Founder and Chair of CASP, Unviersity of Maryland
We’re massive fans of the stage production of Hamilton, but we’d never read the widely acclaimed biography of the show’s protagonist by the great biographer, Ron Chernow. Well, this week, after a few years of the intimidatingly large book sitting atop our ‘to read’ pile, we spent our evenings finishing it off and we’re delighted that we did. It’s superb.
The story of Alexander Hamilton is remarkable in so many respects, with the many elements of his life adding up to an amazing record of social history from a time when the world was changing and fast evolving, primarily with the rise of the US as an independent global powerhouse. And in the same way that Lin-Manuel Miranda’s stage version puts a unique spin on these historical events, Chernow’s wonderful writing, as in all his books, brings to life a period of history that should be mandatory learning for anyone who’s interested in how the world came to look like it is today. Like all great historians, Chernow manages to make heavy subject matter and a great swathe of history feel light and easily accessible.
If you liked Hamilton on stage, you’ll gain much from this more detailed account. Chernow’s other biographies, notably his works on Leonardo da Vinci and John D Rockefeller, are also worth digging deep into.
Some people don't think enough. Others think way too much. If the latter applies to you, this poem by Tony Hoagland will make you smile. It starts with a brilliantly funny insight into the absurdity of excessive introspection:
“There are people who do not see a broken playground swing
as a symbol of ruined childhood
and there are people who don't interpret the behavior
of a fly in a motel room as a mocking representation of their thought process.”
And it ends with these beautiful lines, conjuring a different kind of mindfulness – one that’s able to overcome the incessant chattering of the self to instead embrace and exalt the world around us:
“I have news for you —
there are people who get up in the morning and cross a room
and open a window to let the sweet breeze in
and let it touch them all over their faces and bodies.”
From time to time we like to share our favourite poems with our community. It’s rare to hear people talk about poetry and on the surface, this medium is hopelessly equipped to compete with other media forms, engineered for mass engagement. How can a sonnet compete for our attention with a 10-part TV miniseries? Or an entire Metaverse? But poetry is strategy powerful and enduring. It’s been around for a very long time, and it isn’t going anywhere. In the age of novel pathogens, lockdowns and self-isolation, it feels more relevant than ever.
And in the context of poetry, we have enjoyed Stephen Fry’s The Ode Less Travelled, not so much because we want to become poets, but because it’s fun to learn about, understand, and play with the mechanics and choices involved in the construction of poetry.
Also, this week Visa has concluded a deal to allow access to USDC, a dollar stablecoin from Circle which is backed by actual physical US dollars. This is yet another sign of how currency is going digital. In the coming years it is highly likely that cash will cease to exist at all. In China it already almost doesn’t. The differences in terms of how China and the West are integrating digital sovereign currencies into their systems is stark as we have written before.
Finally, in terms of reading, we came across this mind-blowing piece about how China believes it is about to take over as the leading SETI (search for extra-terrestrial intelligence) power with the “Five-hundred-meter Aperture Spherical Radio Telescope (FAST) — a giant observatory built on a mountaintop in the southwestern Guizhou province in 2016. The facility is the world’s largest single-dish radio telescope, around 2.5 times more powerful than any previous instrument of its kind”. The article is focused around Zhang Tongjie, China’s leading SETI trailblazer, and his views and hopes on what he will find.
What we're watching.
Did you play rugby at school? We did. And we absolutely loved it! This week we stumbled across some video footage of top-tier English school rugby, and we were impressed by the skills and professionalism on show. The production is pretty cool too. We love the concept of elevating school sports to box office status!
Then we looked at how they do it in South Africa, and we were simply blown away. This video says it all. Not for the faint-hearted!
What we're listening to.
Spotify is a great, growing, world-changing business. A real titan who, over the last decade, has played a very active role in so many of our lives. And that’s because music, and podcasting to an increasing extent, is so central to our days.
Of course, their primary role is the delivery of audio content, but they also seem to be getting lots of other aspects of their business right, from their strategic shift into podcasts, their pricing plan upgrades to the news this week that they’re spending $500,000 supporting independent music venues.
But what we really love about Spotify only happens once a year and it’s their annual look back on each user’s year in music. You always know that Christmas is just around the corner when Spotify drops you an email telling you that “Your year in music is here.” Every year for approaching a decade we’ve dug into these emails and, with great nostalgia and fond memories, listened to our top tracks from that year and remembered events from the previous 12 months.
As Patrick O’Shaughnessy neatly summarised on Twitter:
"The @Spotify year end summary is one of the most fun things any consumer company does. Great variety of data points (how much you discovered, how you stacked up to others, your favorites, etc). Fun to reflect, impossible not to discuss and share. Smart as hell."
We wouldn’t quite go as far as saying that the Spotify year end summary is one of our annual highlights. But it does something pretty magical at this time of year when it combines the music and memory, forcing you to reflect on the year you’ve had and where you have been (or not been as the case has been in 2020) whilst the soundtrack of your year played on your speakers, phones or headphones.
That’s cool, and it gives you a warm fuzzy feeling that instantly gets transferred back onto the way you think about Spotify the company and the brand. It makes the £120 or so that an increasingly large number of us spend each year on our subscriptions extremely attractive. Nostalgia is expensive. But Spotify makes it very good value.