Weekend Reading #102
Photo by Rita Morais on Unsplash
This is the hundred-and-second weekly edition of our newsletter, Weekend Reading, sent out on Saturday 23rd January 2021.
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What we're doing.
This week we got on with our business. We have a host of deals coming up as well as a new website for our private deals platform, 3BC. Our fund closed off our January period and we have received a massive response already following last week’s launch of our Nachas Networks product offering.
The interesting thing about building a full in-house tech stack for accessing trading infrastructure and pricing feeds is that the possibilities for building around it are endless. Having that infrastructure in place is allowing us to have conversations around developing solutions that are scalable, flexible and fit for specific purposes without shelling out for bespoke work from existing software providers.
Using and deploying technology in a “first principles” way (which may not necessarily be the “conventional” way) has been a core part of our modus operandi since day one – and we intend to do it even more as we grow.
What we're thinking.
With global markets soaring since the US election and the announcement of multiple COVID vaccines, positioning has shifted dramatically over the past few months. Active managers have had the largest inflows in many years and retail investors are all in. Markets are susceptible now to whatever risks may raise their heads. There is no way of telling what the specific risks may be ahead of time as the risks are usually a little left field. But as ever, the price action is telling. Of course, the overarching narrative of monetary debasement still applies as a tailwind but the volatility in between, despite having been quiet since COVID, can – and most likely will – be huge from time to time.
At the same time, the ongoing divide between the market and “fundamentals” seems to only be growing. We’ve written about involuntary flows driven by passive vehicles and dealer hedging from derivatives driving price action that makes very little sense to humans, and thinking about how these flows set the market up for volatility is a rabbit hole that one can all too easily fall into: the land of gamma, vanna, volga and charm.
As with most rabbit holes, finding out more tends to lead to the conclusion that we know much less than we do. This podcast entitled “Charming Vanna” is a fast-track ticket down this rabbit hole, featuring options trader Cem Karsan (@Jam_croissant) – podcasts normally deserve to be in “What we’re listening to” but we can guarantee that once you’re halfway through this one, you’ll be doing much more thinking (and replaying) than listening.
What we're playing.
With the lockdown in the UK still in full swing, there’s no better way to relax at home than a few hours playing on a PS4 with some friends.
This week we jumped into the post-soviet fantasy world of Chernarus in the game DayZ. Developing on the highly successful predecessor ARMA 2, you begin life as a survivor in an indistinguishable place, surrounded by zombies and left to fend for yourself with just an apple and a few tatty rags. As you roam around, you are able to find weapons, food, and medicine; but as you get more familiar, you can attempt to meet up with friends, build a base and take on rival player factions.
Half the difficulty lies in finding each other whilst trying to survive, given you don’t have a map in this huge and unforgiving terrain filled with bears, wolves, zombies and of course, other players. Whilst we would say that the game can be a bit dry if you play by yourself, it is definitely one to play with a group, be it small or large, given the game can host up to 120 players on a single server. What’s also great to see is that even 9 years on from its 2012 release, the game is thriving as there are a number of hugely active server communities and the micro-economies that have developed.
What we're reading.
Jeff Bezos is one of the most successful – and famous – people in the world; a great innovator and someone who has improved the lives of many, many people globally. But still, he manages to keep a relatively low profile. So we were excited to come across Invent and Wander, a collection of his writings. This takes the form of his unique annual Amazon shareholder letters and numerous speeches and interviews that he’s given over the years.
The fascinating thing about this book is seeing the evolution of Bezos’ ideas – how Amazon adapted from online book seller to a diversified and truly global business. The book spans a range of topics including public policy, innovation, corporate culture, climate change and even outer space. These might seem pretty abstract and disconnected, but the book is written in a down-to-earth style that makes it easy to take in and absorb. Perhaps the coolest thing about it is getting an inside track on where Bezos thinks the world is going.
This piece from Simon Kuper in the FT got us thinking. The title says it all really: “Why does Davos Man get it so wrong?”
The article is a fun, tongue-in-cheek take on the limitations of forecasting, observing that high-profile, important people seem to be especially bad at predicting the future. Kuper then goes on to point out that:
"After 9/11, the Pentagon wisely brainstormed with representatives from Hollywood about possible future attacks. The Simpsons TV show in 2000 foresaw a Trump presidency causing a budget crisis.
In 1995, the astronomer, writer and poet Carl Sagan expressed his “foreboding” of a future America “when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues."
We can’t help but think that Davos isn't really about the future. It’s about what the guys at Epsilon Theory would call “The Long Now”, a barometer of conventional wisdom and the perpetuation of the status quo.
A couple of years ago, we were deeply taken with Giles Kristian’s novel, Lancelot, which was just so full of both action and beautifully poignant moments. It tells the tale of Lancelot and of course King Arthur and Guinevere. This week we finished the sequel, Camelot, which is equally stirring and unputdownable. Highly recommended!
What we're watching.
With cold winter nights and lockdown continuing to bear down upon us, a good film is worth its weight in gold. Two hours of escapism is just what the doctor ordered after a hard day at the coal face/in the loft office. This week we stumbled upon two that we’d recommend as ‘worth a watch.’
The Wife is one that slipped our attention when it was released back in 2017, but we thoroughly enjoyed it and we highly recommend it as a succinct, smart film that will get you thinking and, perhaps, engaging in lively debate with your other-half.
Glenn Close plays the wife (hence the title) of a Nobel Prize winning author played by Jonathan Pryce. The story investigates their relationship, both professional and personal, and how (without revealing any spoilers!) fame and fortune don’t always allow for a happy marriage! A smart, elegant film with Glenn Close superb.
Fame and fortune are also on the agenda in All The Money In The World. This film tells the true story from 1973 of how John Paul Getty reacted to news that his sixteen-year-old grandson had been kidnapped. Having disappeared in Rome, the grandson’s kidnappers demanded $17 million for his release, a request that his mother put forward to grandpa, the then-richest man on earth, expecting him to cough up the dosh. Needless to say, if you know anything about Getty’s reputation, he didn’t.
The infamous story that plays out is both barbaric and entertaining. It’s also incredibly sad, given that the events you’re watching from the comfort of your living room were real and the poor boy was subjected to such an ordeal when, at the stroke of a pen or the shuffling of some loose change by Getty, he’d have been free.
Of course, the story is a little more complex than that simple analysis, and this is a very well adapted film, with Christopher Plummer playing Getty and Mark Wahlberg his right hand man caught in the middle. A good cast, a good story, a good night on the sofa.
We also spent an enjoyable – and at times, terrifying – couple of hours in front of Bone Tomahawk, an indie that fuses western, comedy and horror genres… and somehow pulls it off.
The film is about a small-town sheriff (played brilliantly by a heavily bearded Kurt Russell) who leads a posse into a desolate region to rescue two people who were abducted by a cannibalistic clan. It’s fair to say that this should only be watched after the kids have gone to bed!
The movie is certainly absorbing, but it’s also strangely touching, with incredible performances from an ensemble cast that ooze Wild West authenticity. The movie isn't for everyone (it isn’t even for most people), but if you’re looking for something a bit different, it’s well worth checking out.
True mastery is something we love and this masterclass by the great violinist Maxim Vengerov is an amazing illustration of precisely that. We were also mesmerised again by the intellectual and artistic depth of Leonard Bernstein’s Norton Lectures at Harvard, especially the one on the 20th Century crisis which is fascinating on Mahler 9 and the last one on neoclassicism and Stravinsky.
What we're listening to.
Kjartan Sveinsson is a keyboardist who spent 15 years shaping the sound of the magnificent Icelandic band, Sigur Ros. Since 2013, he’s been going it alone as a multi-instrumentalist and this week we’ve been particularly enjoying his 2016 release, “Der Klang der Offenbarung des Göttlichen”, which apparently translates from the German into something like, “The Explosive Sonics of Divinity,” which already sounds intriguing.
The record is actually created by Sveinsson as an opera, although it’s never been staged and there are no parts for actors. But it is split into four acts, it is lyrical, and there is a story to be told by the music. To our mind (and ears), whatever form it takes, it is a beautiful piece of music. Reflective, sad, ethereal and immensely uplifting.
We’re often recommending music to work to in this newsletter – as we often spend our time working to music – and this is a perfect accompaniment for either late afternoons at a computer or to relax of an evening whilst reading a good book. Teil IV (Part IV) is our favourite of the acts and, after a hard January week, it’s well worth checking out.
Watching President Biden’s inauguration party, we were treated to a live performance of one of our favourite songs.
Hauntingly beautiful, “Land Of Hope And Dreams” celebrates America as a place of sanctuary, where the dispossessed can go to rebuild their lives. It’s an invitation to hope, dream and find your true place in the world. And Springteen’s performance is mesmerising – in the shadow of the Lincoln Memorial he stands, softly lit, delivering an acoustic version of a song that is rough round the edges, but all the more authentic for it.
Listening to this we were struck by the ability of great art – and its creators’ – to transcend politics, even in a deeply politicised setting. Bruce is a figure who can speak to all sections of American society, and indeed, people all over the world, with messages of hope, dreams and a better future. That’s why he’s one of our very favourite musicians, and always will be.