Weekend Reading #85
This is the eighty-fifth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 18th September 2020.
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What we're doing.
This week we’ve turned the dial up on fund marketing, reaching out through our networks far and wide to get the word out about what we’re doing. We have always believed that our industry needed an extra boost of daring imagination, balanced against the pragmatism and conservatism that has come to characterise it. We certainly put that imagination of ours into practice when putting together all the different components of our business and raised a few eyebrows in the process. In particular, our adamant insistence upon having an investment mandate that envelops both traditional assets and what we believe are the abundant opportunities in the digital asset space within a bog-standard Cayman fund structure is starting to pay off, as we build for ourselves an interesting niche that is both compliant and future-proofed.
With more Zoom calls scheduled for the week to come, it’d be interesting to see how larger allocators and investors respond to the prospect of having managed exposure to one of the most promising emergent asset classes in the world today, in a structure that they are familiar with and can easily relate to.
For the rest of the market, this week has been torrid, to say the least, with a selloff sweeping through the world’s favourite sector: US Tech. We’ve written about the risks of a passive-driven market and the resulting correlation leading to moves which are driven by decisions around price rather than value - and we believe that we’re seeing it pan out right before our eyes. Day after day of relentless selling has left many wondering why - our guess: it ain’t crazy, it just ain’t human.
Of course, there are exceptions: this week saw the IPO of data warehousing company Snowflake, whose stock promptly doubled from its issuance price – no bear market as long as it’s not an index stock, apparently! On our part, we launched another unrelated but similar deal on our 3BC platform, giving our investors an opportunity to pick up early exposure to an AI big data processing business.
While on the topic of digital assets, the pre-eminent Decentralised Exchange, Uniswap, launched their governance token UNI this week to the public. This was the culmination of years of development under VC funding, with the protocol generating almost US$10m worth of fees over the past week or so, with more than US$3bn of liquidity passing through it. With this issuance, the founders of Uniswap hand over the governance and control of probably the largest automated market maker protocol in the digital space to the most important stakeholders in the entire ecosystem: the community.
When we say community, it’s not just the users, but also the developers, the liquidity providers and everyone that has been involved one way or another with the protocol. This is the true definition of “stakeholders”. Their reward: 400 UNI tokens sent to every wallet address that has ever interacted with the Uniswap smart contract, including anyone who has sent a failed request. UNI has already returned multiples of their initial value: at a price of around $7 as we write, anyone who held on to their initial allocation would have been given US$2,800 for free. Now that is what we call stakeholder engagement.
As we sign off for the weekend we wish all of our Jewish readers a hearty Shana Tova - wishing you a sweet and happy new year filled with peace, joy and prosperity!
What we're reading.
Remember the pictures that did the rounds of colourful mountains of metal in China after its bike-sharing boom went bust in 2017? Remember how everyone was up in arms about the fact that a mountain of scrap metal looked as if it had been dumped and forgotten about? Ever wondered what happened to those mountains?
Well, as per this Bloomberg report, here’s a great lesson in how the world should recycle its bicycles as this article explains how up to 20 million shared bikes have been either put back into use, recycled or reincarnated as other more useful items, such as providing homes for stray cats!
Miles and miles away from the warm embrace of our Sun, the edge of our Solar System feels like a very distant, cold and dark place. For centuries, due to its position on the outer limits of our discovery and understanding, we assumed that this vast expanse of space contained precisely nothing. Ignorance was bliss, in some respects. With no way of exploring this swathe of space, science assumed there was nothing there.
That is until recently, because scientists and astronomers have engineered a way to peer into that murky nothingness to see if there is something amongst the darkness. Telescopes had done their best to see into the void but found little and so the only way to find out what was out there was to send something to have a look. So, we did.
For the past two years, two spacecraft, launched in 1970s, have been beaming back pictures from this strange, mysterious, magical region that we call interstellar space. As these man-made objects prepare to leave our Solar System, they are venturing further than any other spacecraft has ever done before. They are billions of miles from us here on earth and what they find could change how we all view our Solar System and what lies beyond. This great long form piece from the BBC explores what they might uncover.
What we're watching.
Apple have always done things differently. And their headquarters are no exception. The $5 billion construction in Cupertino, California, known as Apple Park, is unlike any other corporate HQ on earth. Located about a mile away from the original Apple Campus, it opened to staff in 2017 but had been under construction for about a decade, with Steve Jobs first announcing the project way back in 2006.
The list of cool features in the Norman Foster designed doughnut is pretty endless but how’s about this: Apple Park doesn't rest on the surface of the planet. Instead, it sits on 700 "stainless steel saucers" intended to protect the building's foundation from natural disasters, such as earthquakes. In the event of an earthquake, the entire park is lifted up to four feet off the ground on those saucers. Apple HQ is literally out of this world.
This YouTube video takes you inside the 176 acres of Apple Park for a sneak peek at what Apple employees get to enjoy every day.
The Tour de France reaches its Parisian conclusion on Sunday and it looks as if Slovenian cyclist, Primož Roglič, a former professional ski jumper, has got the ‘maillot jaune’ all wrapped up. That means he will be crowned the 2020 winner of the Tour de France and Sunday’s final ride into Paris will be, as it is almost every year, ceremonial rather than a full-on race.
The fact that the final day of racing is always symbolic rather than competitive is another quirk of the Tour. It’s a bit like a team who are 1-0 behind in the World Cup Final deciding to sit down for the last 5 minutes and not go for that game changing goal. It might sound odd, but so is much of the Tour de France, and that’s what makes it such a unique event. You’ll see Roglic sipping champagne and posing for photographs with his teammates as they ride into Paris – which isn’t a sight you’d see in the last 5 minutes of the World Cup Final.
Whilst Roglic will be crowned champion of the overall 23-day race, the chance to win the individual stage that finishes in the late afternoon sun on the Champs Elysees will be fought for by the best sprinters in the world. If you’ve never seen what the final few minutes of the Tour looks like, then be sure to do so on Sunday. 150 riders whizzing through the streets of Paris with the sun going down behind the Arc de Triomphe is one of the most exhilarating sights in sport.
Even if you don’t understand all the intricacies and quirks of the overall event, the closing few minutes and miles of the 80-hour, 2,156 mile event will still take your breath away.
What we're listening to.
In the latest episode of the Investor’s Field Guide podcast from Patrick O'Shaughnessy, he talks with Rory Sutherland, Vice Chairman of Ogilvy & Mather Group, one of the largest and most renowned advertising agencies in the world. Sutherland is always a great listen and if you haven’t watched his much-loved TED Talk from 2009, ”Life Lessons From An Ad Man”, then you should check it out.
Given that O’Shaughnessy usually interviews people with financial backgrounds, having a marketing guy like Sutherland on the podcast to share his ideas is a fascinating and enlightening listen. They cover much ground talking about the shortcomings of spreadsheets, how to turn weaknesses into strengths, consumer psychology and they disclose the deadly sins of marketing.
All businesses, from financial services companies to consumer brands, must do some form of marketing. End of. If they’re not shouting (even if it’s only a little) about what they’re doing, then they’re slowly dying. Hence, listening to Sutherland’s words of wisdom should be an essential task for everybody.
For the classical music lovers among us, this year is a particularly special year, being the 250th birthday of Ludwig van Beethoven. What was a year that was meant to see dozens of special performances of Beethoven’s works (including an opera – yes, did Beethoven did write an opera, Fidelio) has unfortunately not panned out according to plan, much like many other plans. Not so for Daniel Barenboim, who has just released another set of recordings of Beethoven’s 32 Piano Sonatas, in addition to the Diabelli Variations. Clearly, lockdown was good news, as he explains:
“To have the chance to record Beethoven’s sonatas so soon after for the Yellow Label felt like the ideal response to the pandemic. At no point during the last fifty years has there been a period when I’ve had time to spend three whole months just playing the piano.”
In anticipation of his new album slated to be released at the end of October, we’ve pulled up an old vinyl edition of his 1967 recording of Piano Sonatas No. 8, 14 and 23 (available on Spotify too), just as a reminder of the genius, past and present, of these two maestros.