Weekend Reading #62

Photo by Emily Levine on Unsplash

This is the sixty-second weekly edition of our newsletter, Weekend Reading, sent out on Saturday 4th April 2020. To receive a copy each week directly into your inbox, sign up here.

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What we're thinking.

We hope you are all safe, well and most importantly, staying positive throughout this crazy period. 

It’s certainly been crazy for markets but, as we have learned throughout our careers, markets are smarter than everyone, and they are always forward looking. As an example, it’s amazing to think that the initial 30% decline off the highs in the US happened so fast that most participants didn't even have time to do their sums properly.

With this in mind, we always repeat to ourselves how “we invest in stocks not companies” and that the drivers of stocks are more complicated than basic fundamental and economic analysis. It's clear that policymakers will continue to throw everything they can at this crisis – governments can do whatever they want, and they will – but we don't yet know whether the stupendous stimulus thrown at us by policymakers will overcome the horrible numbers we are seeing in economies globally.

Only time will tell, and that is the key battleground to watch in markets. It doesn't necessarily mean that growth will return fast, but chances are that if it does, markets will be off to the races long before the economic indicators register any improvement.

What we're doing.

As we move towards the launch of our private markets deal platform, 3BC, we’ve been focused on connecting with our network of partners. These are long-time friends of our business who are plugged into both global dealflow and have contacts who will be signing up to 3BC as investors. 

We designed 3BC to connect HNW individuals and family offices with a wide variety of deals across asset classes, sectors and geographies. We act as a utility that sits between these parties and it’s been heartening to receive plenty of interest in both sides of our marketplace over the past few weeks. Our partners help us to efficiently connect with both sides, leaving us to focus on providing a framework where investors gain access to high quality deal flow. The help they give us is invaluable.

All three parts of Three Body Capital are being built with our network of global partners in mind. We try to avoid thinking of our friends as “clients”, or “users”, or even “customers”. Rather, we’re building long term partnerships, aligning interests and looking to reward the loyalty of all participants over the long term. 

Building out this network of partners has been the reason why we’ve spent so much of the past week on the phone. And if you’re anything like us then it’s likely you’ve been spending your days online with contacts and partners and your evenings in touch with family. And the way to connect with family right now is via Houseparty, an app that has exploded in popularity in recent weeks.

We’re sure you’ll agree that it’s Skype or Zoom for business, Slack or somesuch for team work… and Houseparty for when you log off with a drink in the evening. Primarily that’s because the Houseparty app is fun! It allows up to eight people to share a chat and hop uninvited between friends’ conversations (anyone got an embarrassing gatecrashing story?!). You can play games with friends and the overall feel of the platform is refreshing and lighthearted, meaning that it’s where you want to be after a long day of hard work in self isolation. 

Houseparty launched in 2016 but has been seen as a venue for teenagers. But the coronavirus crisis has given it an unexpected rebirth, and it’s become the most-downloaded free app in the UK, with App Annie showing downloads by British users increasing 1,120% in March compared to February. Escapism and a bit of fun is what’s needed right now, especially if you’re trying to juggle business, childcare and a myriad of other responsibilities. So we welcome Houseparty… and we look forward to gatecrashing your conversations one evening soon! 

Given the non-stop calls, what we’ve been doing this week and what we’re planning to do this weekend are a little different. Despite the headwinds, all of the team have been continuing to drive TBC forward as hard as possible, so we’re in need of some respite. But as we all know the trouble with technology and apps like Houseparty is that you can never escape. They’re always on, always there, always demanding attention. 

So this weekend, we’ll be trying to take a break from the unerring pull of technology. There are many ways to do this, but it is impossible to ‘just do it’ by turning your phone to silent or putting it in your pocket. It’ll be a matter of minutes before you’re checking it, refreshing, Tweeting, chatting or whatever else. If you’re anything like us, and as depressing as it sounds, in order to leave your phone alone you have to use a system, a physical process that removes the possibility to interact. 

Here’s one for you to try: select a great film, pull out an unread book or simply lay the table for dinner with your partner. Then take your phone into another room (upstairs preferably) and hide it somewhere extremely inconvenient. Maybe in the back of a drawer, on a top shelf or stuff it under the mattress. Or for extra points, lock it in the glove compartment of your car. We’re serious!

Yes, it sounds ridiculous, but now go back to your TV, book or partner and do your best to forget your phone for the rest of the evening. Watch that film. Read that book. Eat dinner and talk. Without the presence of your phone, and knowing that accessing your phone is now an inconvenient task, you may be able to forget about the rest of the world for a while. And wouldn’t that be nice… 
 
What we're reading.

A controversial but necessary read was delivered this week by Adam Tooze (author of the excellent account of the 2008 financial crisis, Crashed) who wrote an essay for Foreign Policy that begins: 

“We used to think that the 2007-2008 financial crisis set the standard for a savage global shock. But that crisis took more than 12 months to spread from the overbuilt suburbs of California and southern Spain to the financial centers of the world. The coronavirus pandemic has taken just three months to engulf first China and now Europe and North America. As it has swept west it has triggered an economic crisis whose violence is set to exceed anything we have previously witnessed.”

Tooze takes a tour of EM nations and provides a health check and an outlook for their prospects, given the fact that Covid-19 is only just beginning to wage the fullness of its savage war in these parts of the world. As we’re all acutely aware, those of us lucky enough to live in London or Paris or New York, have the luxury, largely, of being able to self isolate and resource ourselves and our communities with the necessary means to collectively fight this virus. We have all had to adapt. And, for the most part, we have all been able to. Many people aren’t so fortunate and the potential consequences for them and their nations’ burgeoning economies are worryingly severe. 

Those consequences will be felt by us all. Globalisation (if it continues?) means an interconnected world where a pebble dropped in China, Indonesia or South Africa causes ripples that we feel here in London and beyond. The long term effects inflicted by Covid-19 will have to be dealt with by us all, as a global population, in an orchestrated manner for years to come. The only way that the negative impacts can be lessened is via a concerted and collective response. 

Sadly, with developed nations scrambling to save their own skins and a vacuum at the top of world leadership, collective action at an international level may never materialise or it will only emerge too late. 

As Tooze concludes: 

“Even if we can get through the next few months of acute threat remotely intact, the coronavirus shock will leave daunting problems of reconstruction. The medium-term outlook for emerging markets depends critically on how the world economy is put back together again.”

Of course, this is only one voice amongst the cacophony that we’re tuning into every second of the day via newstreams and social media. However, it feels like an important and sobering one. 

To try to insulate ourselves from the world’s existential problems, it’s worth spending time with a book like Ian McEwan’s, Saturday. It’s a read that reminds us how life isn’t, necessarily, about grand movements. Rather, it’s made up of small moments. 

McEwan’s story takes place on a single day, a Saturday, in London. It involves a brain surgeon, Henry Perowne, looking forward to welcoming his family for a dinner at his house (near the TBC offices, as it happens) when his day takes a collection of dramatic turns. As is typical of McEwan, he elongates 24 hours into 300 pages, elaborating and meditating on the minutiae of the simple parts of Perowne’s day, the sort of things that can be so easily overlooked when grander themes and thoughts overwhelm our minds. 

The making of a fish stew. The interior of a car. The feeling of a car accident. A game of squash. The sound of the 12-bar blues. An operation on the brain. Each event or sensation, the accumulation of which make up the 24 hours that we humans call ‘days’, is described in infinite detail, reminding us that even when the world seems to be spinning faster and we’re rushing from era-defining news story to era-defining news story, life is merely a collection of these minor events, of these small characteristics. 

In recent years, this concept has been granted the moniker of ‘mindfulness’, a practise that continues to grow in popularity. But it doesn’t have to be achieved on a mat in silent meditation. McEwan’s prose reminds us that we can tune into it every second of the day as we go about our daily lives. It’s found in normality, in simple details and events unfolding in front of us. It’s here where we have the chance to return to a world that doesn’t seem so different from how it was yesterday and be reminded that life will likely look and feel like this again tomorrow. 

It’s a reassuring thought, especially in times like these. 

What we're watching.

Having completed all of the content hosted on all of the streaming services over the past fortnight, we were lucky to come across an incredible channel this week that’s providing entertainment, education and, above all, escapism. 

WildEarth was founded in 2006 with the vision to host live wildlife content from all over the world. Live by its very definition allows people to interact in real time and as a result gives a sense of actually being transported to that place. This week we’ve been glued to their YouTube channel, tuning into hours of scheduled game drives. 

safariLIVE is a hosted safari from South Africa which broadcasts six hours a day every single day of the year. Viewers hop onboard a 4x4 and join a couple of expert rangers on the lookout for Africa’s most iconic animals. From the comfort of your office or living room, with one click, you’re in South Africa! You’re looking for lions! You’re on holiday! 

Follow their YouTube channel here, check out when the next safariLIVE is scheduled and look forward to being transported far away from the confines of your home office and whatever other stresses life is throwing at you.

What we're listening to.

One thing blowing our minds this week is ‘8D music’. A number of tracks have been shared on social media and the claim made that this stunning technology could revolutionise how we all consume music. 

Whatever it is, this music must be listened to on headphones and the sales pitch we were given by a friend when we asked “what is it?” was that this is music that “you listen to with your brain, rather than your ears.” Intriguing? Exciting? Nonsense? Well, give these tracks a listen on headphones and let us know what you think. 

Here’s Imagine Dragons, Believer and a version of Billie Eilish’s, Ilomilo. Prepare to be surprised and, potentially, blown away by what you hear and by how these tracks make you feel. 

It was interesting to dig a little deeper into what 8D music is and find out whether what we’d stumbled across was actually something revolutionary. The short answer is, kind of, although as with a lot of fads it turns out that the technology and this method of creating music has existed for some time. 

Also, the ‘8D’ title is a bit of a misnomer, a creative spin, as what’s really happening is that a stereo version of the track is being edited with a special reverb tool that tricks your brain into thinking that the music is moving and pulsing around your head. There are not eight dimensions. 

But who cares. However it’s being done, the trick works. And if you’re stuck for something cool to do right now, ‘8D’ music on headphones will free your mind for a time. 

A sombre musical note was offered up this week by the news that American country folk singer-songwriting legend John Prine had been hospitalised with Covid-19 symptoms. Sad news, and a chance for the Late Show’s Stephen Colbert to dust off a never-before-seen duet that he sung with Prine in 2016. Colbert had been saving and, as he says in the recorded intro from back in 2016, not releasing this video until the moment, “you know, something terrible happens and we have to cheer up the world." 

Well, that moment is now, and so we hope you enjoy and find comfort as Prine and Colbert beautifully duet on Prine’s 1978 classic, That's The Way That The World Goes 'round.

As Colbert sings in the second verse: 

“I was sitting in the bathtub counting my toes
When the radiator broke, water all froze
I got stuck in the ice without my clothes
Naked as the eyes of a clown.
I was crying ice cubes hoping I'd croak
When the sun come through the window, the ice all broke
I stood up and laughed thought it was a joke
That's the way that the world goes 'round.”

We wish John Prine and all of you out there the very best. Stay safe out there and keep well.