Weekend Reading #144

Photo by freestocks on Unsplash

This is the hundred-and-forty-fourth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 13th November 2021.

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What we're thinking.

While everyone was watching the fun and games around the IPO of Rivian and doing the usual calculations of how many Fords and Volkswagens it was worth, Disney's results happened with an uncharacteristically low amount of fanfare.  In this new digital world, the excitement around physical stuff seems to have been forgotten, but what's surely being missed here by many who preach peak Disney is that Disney has the biggest library of loved content in history.  Not only is it getting better, but it is also all monetisable anywhere!  In this context, listening to CEO Bob Chapek’s comments on the metaverse (we still cringe every time we write that word), we can’t wait to see how Disney (amongst others) decides to begin monetising its content. Some experiments have occurred inside Fortnite but the real action is still to come.  We also can't wait to see what Disney+ day has in store on Friday.   

We have also been thinking a lot about commodities. Initially, it seemed that we were in the midst of a structural shift in how the Chinese CCP reacts to weakness in its property sector.  Allowing Evergrande to default and for many others to reach distressed status sent a strong message.  Along with the common prosperity meme (yes, it's just another meme) the structural outlook for many industrial commodities would appear to be weak.  However, some recent actions have led us to think that the CCP has lost its “reform” zeal and seems to be taking its foot off the neck of the property sector a bit, just like they always have done.  Time will tell but price action suggests this may be the case.  Throw this onto the inflation flame which reached presidential status this week with Joe Biden’s rather odd speech, and we have the ingredients for a rather different set of conditions to what appeared to be the case only a few weeks ago.  Some beaten-down Chinese internet names seem to be enjoying the effects of this relief too.  For now, anyway. 

What we're reading.

Growing up, the music of Nirvana and then the Foo Fighters played a constant role in my life. Nirvana was a touch before my time and, if honest, a little too heavy for my English public-school boy tastes, but their sound was one of rebellion and excitement, which is always good news for an English public-school boy! The Foo Fighters have provided the soundtrack to a lot of my adult life, especially long during my years as a half-decent long-distance runner. At the centre of both epoch-defining bands was Dave Grohl, who is widely regarded as one of the nicest men in rock music despite it all. This nice guy attitude means that Grohl has made a mountain of friends along the way, hence, he's enjoyed a helluva rock music ride, guesting on drums alongside the biggest bands, including Paul McCartney, Van Halen, Tom Petty and the Heartbreakers, and buddying up to many of the biggest names in rock. His recent book, The Storyteller: Tales of Life and Music, tells stories from his life, beginning with an unremarkable upbringing in Virginia through his unbelievable emergence as the drummer for Kurt Cobain's Nirvana, and then his dominance of rock as he fronted the Foo Fighters. The story of his life is a great story, and he tells it so beautifully, writing in a laconic, fun manner that takes you on the road with him through the good times and the bad. Grohl really does do an amazing job letting you know what singing in front of 80,000 people might actually feel like, which is a real skill for a writer of any description, let alone one who makes his living penning songs and lyrics, not books and words. This book is well worth a read, whether you're into Nirvana and the Foos or not. It's life-affirming, optimistic, exciting, fast-paced and tells the story of a great life lived by a great guy. EJP 

The impending Metaverse is something everyone is talking about following Facebook’s recent rebrand and cryptocurrency prices continuing to soar to new heights. As such, the City of Seoul in South Korea has been quick to jump aboard the trend, announcing that it will become the first city operating in the Metaverse. The local government announced just this week that they will begin construction of the digitalised city, with a whole range of public amenities available to its residents as well as incoming virtual tourists. So far, the proposed plan will include a virtual mayor’s office and public administration bureau, a FinTech investment Lab, a number of the city’s notable landmarks as well as form part of the remote campuses of local universities. In doing so, more than $3.3 million dollars of public funds have already been committed to kickstarting the development of the project, with more expected to come from private businesses looking to get in on the action. HS  

What we're watching.

Showtrial is a short, sharp show on BBC iPlayer that is very entertaining and explores some interesting themes around class and social media. The show is from the producers of Line of Duty and, more recently, Vigil, the submarine thriller. In Showtrial, based in Bristol, student Hannah is murdered and the chief suspect is her former friend, Talitha, a wealthy screw-up who takes pleasure taunting the detective and her solicitor, Cleo. While the question mark hovers overs Talitha’s innocence, the drama travels elsewhere, from the police to the Crown Prosecution Service to Talitha’s jittery friend Dhillon to Talitha’s wealthy parents, whose vileness gives Talitha her backstory and then some. It's really quite intriguing and a finely balanced whodunnit that has you gripped right up until the final guilty/not guilty moment. EJP 

A classic film that I dip back into once every couple of months is Anthony Minghella’s, The Talented Mr Ripley. An adaptation of Patricia Highsmith's 1955 novel of the same name, the film stars Matt Damon as the two-faced Tom Ripley, Jude Law as the smooth idealist Dickie Greenleaf, Gwyneth Paltrow as cool and clever Marge Sherwood, Cate Blanchett as Meredith Logue, and the unparalleled Philip Seymour Hoffman as the gregarious Freddie Miles. All-star is an understatement. The film is also shot in some of the most beautiful parts of Italy, with the deceitful and murderous action unfolding in the beaches near Naples, the heart of Rome and on the water in Venice. This is a beautiful film, incredibly acted, with one hell of an evil edge. If you haven’t seen it, I highly recommend it. If you have, watch it again. EJP 
 

What we're listening to.

We’ve written about founder CEOs before and how they bring a different level of focus and direction to their companies, most recently in the context of Mark Zuckerberg’s bold and, some would say, audacious move to rebrand Facebook in its new metaversal image. In that same vein, this interview on the Bankless podcast with Brian Armstrong, CEO and co-founder of Coinbase, leaves us fascinated by the future potential of their business as crypto inexorably becomes a structural feature in global commerce and economics. Having a dedicated founder at the helm of an already successful and growing business provides conviction and purpose that a “professional” management team optimising for analyst estimates and ratings would struggle to instil. Coinbase reported earnings earlier this week which the street promptly labelled as “disappointing”, missing estimates for revenues from the prior quarter. A deeper look at their numbers and commentary tells a very different structural story that could well outlast the careers of the analysts that cover the stock. Have a listen to the Bankless interview here, and their results call replay here, and the chasm between how Wall Street and the rest of their growing community of shareholders and customers perceive their business (hint: compare Q&A between shareholders and analysts) is stark and clear. Regular readers of our work can easily work out which side of this chasm we stand on. EL

I’ve read a couple of Niall Ferguson's books and he is someone I follow due to his interest in what he calls applied history.  Applied history is taking historical events and using the lessons and patterns to make policy decisions today. He believes history studies are terrible under-utilised in today's world.  I think he is right.  His chat with Lex Fridman covered his involvement in the launch of a new university called the University of Austin.  The ethos behind the launch is to provide a place where the pursuit of truth and academic excellence can happen safely and without worry about wokism interfering with what is important – learning.  A number of highly respected personalities are involved in this project, including Bari Weiss, whose newsletter, Common Sense, I have recommended before.  The second part of the conversation is about the history of money.  He covers everything including cryptocurrencies and his view on where we are headed in the context of what has come before. 

I also listened to Lex chat with Neil Stephenson, of Snowcrash fame.  Widely credited now as being the grandad of the “Metaverse”, this was a mind-blowing listen covering everything from his involvement with Jeff Bezos early on in his space venture, Blue Origin, to his views on crypto and pretty much everything else. 

Finally, I listened to the latest Uncommon Core podcast which featured crypto legend, Su Zhu, from Three Arrows on how to value cryptocurrencies.  If you are looking for a playbook you may be disappointed as there is no linear way to value an emerging technology like this.  As Su says, each project is different but some frameworks are beginning to emerge.  Highly recommended especially for crypto sceptics. DC

A cool new band that appeared on our Spotify Discover Weekly this week was Brighton-based rock band, Phoria. It's always nice when Spotify serves you up something completely by chance that is, firstly, a bit different but, secondly, complementary to your other musical tastes. Cheers algorithm! Phoria is like Sigur Ros, James Blake or Radiohead when Radiohead go weird. They're in that genre that can be on your Spotify during the quieter times of day, whether working, relaxing, driving, any time when you want some sound, but you'd like your mind to not be on the music. Their 2020 release, Caught a Black Rabbit, is superb, described as 'contemporary classical', which sounds a little odd but does neatly sum up what they're doing with their music. Stick it on during a quiet moment in your day and enjoy. EJP