Weekend Reading #138
Photo by Utsav Srestha on Unsplash
This is the hundred-and-thirty-eighth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 2nd October 2021.
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What we're thinking.
This week was all about uncertainty. Markets hate uncertainty and anywhere you read there are lots of excuses for why markets have wobbled. We all know now that US indices had their weakest month and quarter in quite some time and everything from China power supply, Evergrande, the TAPER, the debt ceiling (We’ve been around long enough to remember the last time the dance happened) et al has been blamed. Reality is that markets went up a lot for a long time and now they’ve gone down a bit. If you really want to know what we think have a look at our blogpost this week which is very timeous and we think extremely relevant. The most important thing in financial markets to understand is market structure. Without this it’s like wandering around in a dark, windowless room, hoping to stumble onto the switch.
At the same time one thing that really does bring a smile to our faces is when crypto has a big green day and the CNBC show hosts try to come up with a reason. This literally happened again today and then I came across this tweet from my still all-time favourite twitter handle @Degenspartan.
unlike our lesser tardfi counterparts,
we require no new reasons to explain crypto price action
numba up 📈⬆️: inevitable organic adoption and understanding of game theory 🧠
numba down 📉⬇️: whales accumulating 🐳 pic.twitter.com/U7sz0kmC8L
Perhaps this urge to explain market moves with a reason is a symptom of our times: the denial of the fact that the market is just another abstraction of human emotions, of greed and fear, and the insistence that there’s always some sort of academic, intellectual reason for anything that happens. Of course, it is true that news and events are price catalysts, but in the end all that changes is the perception of a specific asset in the eyes of the market. When something is in demand, the price goes up, and when it isn’t, the price goes down. Why it goes up and down is a function of each market participant’s personal conclusions on value and worth, taken in aggregate. Those conclusions don’t need to fit a model or be driven by some kind of news or reason – they can just, quite simply, be.
What we're doing.
I’ve always been able to tie a bow tie... sort of. I always ended up with an OK result but it, without fail, took me 20 minutes, 40 failed attempts and a heck of a lot of frustration, sweat and angst, usually because it’s being tied in the back of a taxi or in a car’s wingmirror. But this week, with a black tie wedding pending, I set myself the task of learning how to quickly and faultlessly tie one. It was an interesting experiment and one that carried over a little of the thinking from my reading of the book I mentioned in a previous newsletter, Four Thousand Weeks. This nice read, whose title leans on the length of the average human life, talked a lot about our failure to slow down and truly commit to learning new skills because we’re so desperate to move from one task to the next as we’re desperate to avoid the notion of our mortality. Hence, we always bounce from one half-finished job to the next, hoping that if we keep moving, like avoiding the glare of a T-Rex, life (and death) won’t ever catch up with us. But, of course, it will. So, this week, I took some time and properly sat down to learn, for a period each day, how to master a skill. I’m pleased to say that, firstly, I can now tie a decent tie in about 3 tries and, secondly, I feel as if I’ve gained a small but significant life skill. I’m going to be far from evangelical in the espousement of this sort of (slightly weird) regular activity but I have enjoyed my short session each day in front of the mirror. Frustration dissipating. Enjoyment rising. Satisfaction delivered. Next week’s task? Who knows, but between now and Christmas perhaps I’ll have slowed down a little and found a dozen or so new life skills. EJP
What we're reading.
I finally finished the Walter Isaacson book, The Code Breaker: Jennifer Doudna, Gene Editing, and the Future of the Human Race. Its brilliant. As an investment theme, it's probably one of the biggest around but to get your head around it as a non-specialist takes a LOT of time wading through the terminology and gaining a crash course in basic biology. I think that due to the complex nature of understanding how everything ties together there are barriers to entry for the average investment professional. It is still extremely early on but the next decade should see a host of companies reach some fairly gargantuan valuations. It's foreseeable that in the not-too-distant future investors will be talking about some of these companies like they talk today about FANG. Someone clever will probably make up a new acronym. This book sets the scene perfectly by giving a great understanding of the history of the space and the key protagonists. Once again Walter Isaacson comes up with a masterpiece. Apparently, he is now writing a book about Elon Musk. Now that will be fun! DC
Here it is again and I make no apologies... Your annual reminder that the greatest book of all time (according to, well, me) is John Williams', Butcher's Crossing. I re-read it for, perhaps, the thirtieth time this week and this will be the third time I've recommended it in the 138 editions of this newsletter. I wish I'd recommended it more! A little-known fact about me (seeing as you asked) is that I keep a simple spreadsheet that logs every book I read. You may think that odd... but I couldn't care less what you think! Lol. My method is that when I finish a book, I enter it into the sheet (title, author, date finished) then I enter a score out of 100 as an instant, one entry review of what I thought of the book. Butcher's Crossing continues to top this list with a score of 94/100. So, yet again, I recommend you read it. It's fine if you don't but, rest assured, like the experienced, relentless buffalo hunter, Miller, who’s a central character in the greatest book all time, I'll be back in 9-12 months with another reminder. Until then... EJP
What we're watching.
New Amsterdam is everything that a streaming service show should be. Fast paced. Strong cast. Tight stories of the week. Nice series-long arcs. Entertainment delivered. The fact it’s set in a fictional NY hospital also adds to the attraction as, much like Vigil that I talked about last week which taught me a lot about life on a nuclear sub, this show has taught me a lot about medicine and life in a hospital. Of course, New Amsterdam is not the first show to exist in this world. The great ER and Chicago Hope back in the day, House and Scrubs more recently... a hospital is a fertile environment for drama, with life and death and everything in between taking place in a fast-paced, action-packed world. So expect hospital dramas to be rolled out until the end of television but it’s refreshing that New Amsterdam doesn’t feel tired, has some great new angles and twists whilst borrowing from the best bits of hospital dramas gone by. It’s good fun. It won’t keep you awake at night but it, like all good telly should, entertain. EJP
Gotham is a show I’ve written about countless times over the past few months as I’ve endeavored to work my way through the 5 seasons in its entirety, however, I am now at the point where I am very close to the end and can write a well-thought out review of the show. Ultimately, it makes for quite an entertaining passive watch but isn’t particularly groundbreaking. For me, it has been one of those shows perfect for watching on the commute or when tired given there isn’t much need to give it your complete attention, but it does function well as a precursor to the Batman movies without explicitly focusing on the goings of young Bruce Wayne. Whilst Bruce remains a central character, it is James Gordon who the show focusses on and his progression through the Gotham Police Department. Whilst I particularly enjoyed the first season, it did seem to deteriorate during the middle seasons given the directors’ decision to bend the rules of reality, bringing characters back to life through ‘mystic forces’. This was disappointing as no character was truly dead in a show that begins with the death of Thomas and Martha Wayne, raising the question, why can’t they come back then? HS
What we're listening to.
A regular listen of mine is the All-In Podcast with Chamath, Jason, Sacks and Friedberg. It's always an exercise in intellectual gymnastics as they provide superb debates on whatever is current. This week they were joined by probably the biggest brain of them all, Balaji Srinivasan as they chatted about everything you want to hear. China vs the US, decentralisation, social media etc. The listening highlight of the week for me. DC