Weekend Reading #118

Photo by Alireza Attari on Unsplash

This is the hundred-and-eighteenth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 15th May 2021.

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What we're doing.

Apart from the daily ups and downs of managing our hedge fund, our private deals platform and our trading software business this week we have thought about where exactly we would have our upcoming strategy session considering we have no office anymore. It's not as straightforward as one might think. A restaurant is great for spending time together but not for focusing and similarly Zoom for many hours is no good for those without die-hard attention spans. Anyone got any ideas in London let us know! Right now, it's either a members’ club or renting a boardroom by the hour and we are open to suggestion. 

We’ve also been plotting a website revamp. Our original website was built at a time where we had some grand ideas but pleasingly, we have outgrown it and each part of our business is growing its own identity. We hope to have this up and running in the coming weeks. 

What we're thinking.

Stock markets have gone haywire. Or have they? If you watch CNBC or read the mainsteam media, you would be forgiven for thinking that we have seen the crash of 2021. If you are an investor in stocks of most non-megacap tech names the selling has been breathtaking. But for the rest of the market its business as usual. The Dow and S&P500 are barely off their highs and even the Nasdaq is in normal pullback territory. There has been a spectacular run with record inflows and it makes sense that stocks don’t go up every day! And every year we hear “sell in May and go away,” which may even be a bit self-fulfilling every now and then.  

In a similar vein, crypto markets have seen volatility (as always). Many attribute this to Elon Musk tweeting about Bitcoin’s energy usage and that may have provided the trigger but in truth crypto markets had been on an absolute tear all year and a pullback is not abnormal in a space which is nascent but readily liquid! The usual headlines of “Bitcoin crashes” have been seen over the past days but zooming out for a second, Bitcoin is still $50,000 or thereabouts despite being off the boil for quite a while in crypto terms.  

What’s interesting about this particular pullback is that the Ethereum ecosystem has barely seemed to notice. As things stand Ether is pretty near its highs of earlier in the week and most notably the “blue chip” DeFi space, after being overshadowed by a retail-driven meme coin rally, is now awakening from its slumber. The likes of Aave, Synthetix and Yearn are beginning to make a move as well as some newer challengers such as Alpha Homora. This is coming off the back once again of real fundamental progress. We are possibly looking at a DeFi summer for the second year. And last year may be just a small preview of what this summer may hold given how big the crypto markets have become. Buckle up! 

And finally remember gold? Everyone seems to have forgotten about it as it’s old and not digital. But gold has the benefit of time and history. Keep an eye on it given the inflation backdrop. It has rallied 8% or so off its April lows, showing signs of ending its period of poor performance. And if it breaks out from this recent range, things could get interesting fast. 

What we're playing.
This weekend I’ll be heading over the O2 where there is a delightful driving range with great views overlooking Canary Wharf. It has been jam packed lately as it has able to open as an outdoor activity despite the sheltered canopy and luscious heaters all around. Aside from the great views and opportunity to whack a few balls as far as you can, they have a great little bar (only outside of course) serving up pints of Jubel, a beer that we discovered on our last visit there with a very refreshing peach flavour to it. The O2 also has its new outlet centre which seemingly opened just when Covid hit and understandably didn’t get a lot of attention. There might not be a lot of great shops there at the moment, but its great for grabbing a quick bite after a tiring hour or so at the range. HS

Throughout the week, we’ve also had a couple of evenings where we’ve kicked back and relaxed with the latest Call of Duty. In particular, I’ve enjoyed playing Gun Game, a mode in which each time you get a kill, you are automatically switched to a new weapon, ultimately winning by reaching the final weapon in the rotation and successfully getting a kill with it. However, as time goes on, these get increasingly more difficult, for example as for the last kill, you will need to best your opponent with just a knife meanwhile they will likely have some sort of assault rifle. It’s a quick and simple mode, and works perfectly for allowing you to try out a whole range of new guns and without the stress of being a low-level player lacking the perks unlocked at higher ranks. HS

What we're reading.

This cool read is about a case of wine that went into space aboard Spacex’s Dragon Capsule and returned to earth quite literally transformed. The case of Petrus 2000 was put to the taste test by some of the best expert tasters in the world, viewed by the press. In a blind test, the experts concluded that the taste was materially different to its earthly counterpart which did not make the trip into outer space.  

The case was part of an experiment by Space Cargo Unlimited that aims to further our understanding of how organic material adapts to the stresses of changing environments. Well worth a read and truly fascinating. DC 

This week we came across an article in the New York Times picking up on a story about a glass viewing walkway bridge which began to fall apart in China’s Northern Jilin province amidst strong winds. The terrifying spectacle left a man trapped on top of the bridge for a number of hours with nothing to do but look down at the more than 330 foot drop below. In fact, during marketing campaigns from the past few months, the local government has attempted to draw in tourists by describing the experience walking across the bridge as “悬在无底洞之上” literally meaning, “like dangling above a bottomless chasm”. Although for this man, it unfortunately came true. HS

This was a fun read on Bloomberg about the current spending habits of the really-super-rich. Jeff Bezos – the man who on a daily basis delivers books to my front door that I’m never going to read – is secretly building one of the world’s most awesome superyachts. It will cost Jeff about $500 million, be 127m long, span several decks, sport three masts and be one of the largest yachts ever built in the Netherlands, the unofficial capital of boat building for the superrich. It’s also an indication that the fiercely secretive super yachting industry is, by all accounts, booming post-COVID, which is good news if (like me) you might be closely connected to (e.g. married) to anyone who works in that industry (i.e. my wife). Cheers, Jeff. I wish you fair winds. EJP

Elon Musk’s turnaround regarding his views on Bitcoin’s environmental sustainability (or lack thereof) certainly grabbed headlines. It also opened the floodgates for the cynics of roll out the old “Bitcoin consumes more electricity than x country/city” narrative once more, this time with kudos being dished out to Elon Musk for “acknowledging” this line of thought. Except that it is in all likelihood inaccurate, not least because places with electricity shortages typically have really expensive electricity and it makes little economic sense for Bitcoin miners to operate in those areas. Rather, Bitcoin mining is highly cost sensitive, leading miners to seek out locations with surplus energy, like in Canada where hydroelectric dams that used to power high-consumption aluminium smelters now produce a surfeit of electricity with nowhere to go. These arguments get given more depth by the team at Coinshares with this report looking at the environmental impact of Bitcoin mining. Once more, the most convenient narrative may not necessarily be the right one. EL

What we're watching.

We’ve talked a lot on the blog about the value and enjoyment we’ve found of late in foreign language television and the necessary reading of the accompanying subtitles. Well, we’ve hit the jackpot again with another French show, available on Amazon Prime, that potentially is even better than the others we’ve been consuming during lockdown, such as Lupin and Call My Agent! The Bureau is set in a branch of the French secret service and involves lots of spying, backwards glances, dodgy Zoom connections from faraway lands, double agents and a bunch of stylish, well-dressed Europeans. Think Homeland set in an office block in Paris. In fact, what it most reminds us of thus far is the car chase through Paris that Matt Damon’s Jason Bourne undertakes in a Mini in The Bourne Identity. The look and feel are the same, with grey Paris the backdrop, and there’s no better review that I can really give it than that. What's more, as mentioned previously, with A Level French very far from cutting le moutarde, all eyes must be on screen and not on phones, so it’s a truly immersive experience of what it must be like to be a French espionner. There are 5 seasons to watch, so I hope you like it as much as I do. EJP

We’ve written before about the emergence during the pandemic of play-to-earn gaming and in particular a game called Axie Infinity. This week saw the release of a cool short documentary (20 minutes or so) covering some of the stories of people in the Philippines who have earned from playing the game. It’s the beginning of a long term trend as we move into the so called “metaverse” and the prospects are really tantalising in terms not only of investment but also upliftment of many from their dire economic conditions. DC 

We rarely sit down and watch television these days, instead being glued to our screens where we would binge the likes of Netflix or Amazon Prime for our regular content fix. Just whilst sitting down to eat dinner one day this week, by chance I ended up watching Rick Stein’s Long Weekend, in an episode where he travels to the beautiful Bologna in Italy. Along the way he samples many of the local delicacies including the likes of Tortellini pasta and of course Bolognese sauce, the name of which is derived from this city. In addition to the food, he takes a look at the history and culture of the city as he walks around speaking with locals. Although it seems so simple, having not travelled for almost 18 months now, it just seemed so pleasant to watch, and really made me crave a holiday abroad. As of next week (the 17th May), tourism will be back on in England with the recently announced traffic light system set to come into force. Who knows, in the coming weeks you might even see a blog post written from somewhere overseas. HS

What we're listening to.

There's something special about live music. Of course, it's better in a stadium in person, but live albums, even if streamed in your kitchen via Spotify, often come with an extra bit of verve. A live album we've been enjoying this week at breakfast time in my house has been a recording of Moby's 2013 album, Innocents. It was Moby's eleventh studio album and it featured collaborations on 7 of the album's 12 tracks. What's cool about the live album, recorded at The Fonda Theatre in Los Angeles, is that many of those collaborators, such as Damien Jurado and Skylar Grey, show up and sing live with Moby and it makes for an eclectic, transitory musical experience. When releasing a new album, a musician typically tours behind its release to drum up sales. But, interestingly, the official Innocents tour consisted of a grand total of 3 shows, all at The Fonda Theatre in LA. The reason for the paucity was resolutely stated by Moby at the time who said: "When I go on tour I sit around a lot (cars, airports, hotels, etc), and when I sit around I can't spend my time making music. And pretty much all I want to do in life is stay home and make music. So, thus: a three-date world tour." And fair enough. He’s successful enough to do whatever he wants, I suppose. And perhaps the fact they’re very limited edition makes the Fonda Theatre shows even greater, with highlights being Jurado and Moby's Almost Home and the live, acoustic version of Perfect Life which, if you're having trouble getting yourself going in the morning, is the perfect track to get your house bouncing off the ceiling. EJP

On the opposite end of the spectrum of cheerful listening is this podcast by Sean Carroll featuring historian Niall Ferguson on the topic of histories, networks and catastrophes. Certainly not the most cheerful of subjects, but it’s an interesting conversation about a theme which we first saw highlighted by Nicholas Nassim Taleb in his book, Antifragile: that with increasing interconnectedness and “optimisation”, there is very little room left for redundancy and hence tolerance for catastrophe. The discuss Niall’s cheerfully titled new book, “Doom: The Politics of Catastrophe”, along with some of the well-flagged flash point that we’ve thought of (e.g. Military engagement over Taiwan), some that we sometimes forget (e.g. Climate Change), the one that we’re living through (Covid) and others that we actually might not even see coming. Forewarned is forearmed. EL