Weekend Reading #131

Photo by freestocks on Unsplash

This is the hundred-and-thirty-first weekly edition of our newsletter, Weekend Reading, sent out on Saturday 14th August 2021.

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Meme of the week

For anyone who’s been paying attention on crypto twitter, you might have noticed profile pictures being changed into different forms of penguin pictures. If you don’t already know them, say hello to Pudgy Penguins, the latest iteration of the NFT mania that has taken hold of the crypto world. There are 8,888 pudgy penguin NFTs in circulation, and they’re available for sale on OpenSea, starting at 1.8 ETH (or about US$5.7k).

As this phenomenon rolls on, we came across this little meme on Twitter that made us chuckle while pondering the broader state of our economy:

What we're thinking.

First on stocks, it is becoming more apparent to us that we are in a market where dispersion is king. Despite indices reaching and staying near all-time highs in the US, the breadth of the rally is weak. This creates opportunity! Companies which are producing excellent results are being rewarded and those that are floundering are getting hurt. This reminds us of a time where fundamentals mattered. Does this mean that fundamentals will continue to matter? Who knows? But for now, the narrative seems to have shifted back to fundamentals. As students of market structure, we always like to believe that fundamentals matter when the participants decide they matter. It seems we are in one of those sweet spots at the moment.

Secondly, crypto is back! The headlines are of course focused on Bitcoin and Ethereum, but the real action is in the gaming and NFT space where real world adoption is spurring record activity for many projects. Axie Infinty as we have written before leads the way with fresh all-time highs in daily average users (over 1m) and henceforth revenues. The token price, which was $3 barely 6 weeks ago has rocketed to around $70. And most intriguingly its advance has been matched by its increase in revenues. Real world adoption was always the holy grail for crypto. While many hoped it would be DeFi, gaming has led the way.

What we're eating.

Being such an internationally diverse team, our collective craving for trying different food of the world is insatiable and this week was no different. As we settle into our new Bloomsbury office, we have begun to scope out new places to try in the area. On the menu this week, we’ve taken a trip to East Asia, where we have had the pleasure of enjoying Japanese, Malaysian and even Korean. Also, having never seen a Taco Bell in the UK before, we were keen to give it a try, although I somehow doubt that we’ll be returning there any time soon. The favourite of the week has to be the Beef Rendang I enjoyed at Dapur (literally meaning “Kitchen” in Malay), tucked away on Lamb’s Conduit Passage close to Holborn. HS

What we're reading.

This great thread from Chris Dixon of A16Z, who we have linked to before in a podcast appearance with Patrick O’Shaughnessy, is well worth a quick read. In it he talks about how crypto is going to disrupt the incumbents. From gaming to music (both of which we wrote about here and here) to social media, the business model innovation we have seen will disrupt. This thread gives you a small taste for what to look for. DC

Most books you read for entertainment and pleasure. Some you read for information and education. And every now and then you read a book that, even in a small way, makes you change your life. This happened this week when I read James Nestor’s book, Breath. Last year, I read and really enjoyed Nestor’s book, Deep, which explores the depths of the seas and oceans by taking us into the world of freediving. Breath dives into a tangential subject, exploring how humans breathe and why most people today do it entirely wrong. If you’re anything like me, you believe that breathing is autonomous, beyond our control, and a habit that can’t be broken or altered too much. Yet, as Nestor teaches, it is something that you can consciously change in an instant and the book is packed with hints and tips about how to improve the way you breathe, which can aid both your mental and physical wellbeing immeasurably. Breath was one of those rare books that I actioned whilst reading. Whether I was sitting on a bus or in bed, I’d practise my nose breathing or had a go at one of the many suggested routines to maximise lung capacity. And, amazingly, by the end of this short 200-page book, I felt like the small changes I’d made in a very short space of time had improved my body, my mind, and my life, even if by only a fraction. For that reason alone, not to mention the myriad of other fascinating aspects that come out of this fantastically educational book, it is well worth a buy and a read. EJP

Another week in DeFi and another hack, this time for around $600m – chunky. Poly Network, a cross-chain bridge, got infiltrated by a hacker who says he didn’t want the money. He took it because he didn’t want anyone nefarious to take it. Who knows what the real intent was, but here is an AMA (ask me anything) which he had on-chain in which he openly chats about the hack and his reasons. A detailed post-mortem of the hack is available here on Rekt.news. The point here is that he took $600m and has decided he doesn’t need it one way or the other. When a hacker is that sophisticated in the crypto world, you can only imagine how much he has already made for himself through the years of being involved in crypto. And not from hacking either. DC
 

What we're watching.

There are films that if you tell someone you haven’t seen, they look at you as if you’re mad. The Shawshank Redemption was one of these that, up until about 6 months ago, I hadn’t ever enjoyed. Chocolat was another, and when I told my wife that I’d never seen she looked at me as if I’d just forgotten our daughter’s name, with complete befuddlement. And so we watched it and it was fantastic, the perfect film for a slow summer evening that provided just enough drama but rather more relaxation and escapism. If, like me until 48 hours ago, you haven’t seen it, the film tells the quaint story of Julliette Binoche’s character, Vlanne, a single mother, who moves with her young daughter move into a peaceful French village to open an unusual chocolate shop during the height of Lent. It made me crave a French holiday and to eat chocolate, one of which I was easily able to satisfy by walking into my kitchen, whilst the other may have to wait a while longer yet. However, given this week the UK government lifted all restrictions on French travel, this might be sooner than expected to Flavigny-sur-Ozerain (where Chocolat was filmed)! EJP 

We also stumbled upon a not-so-new series on National Geographic (via Disney+) called Drain the Ocean, which involves explorers that deploy high resolution sonar and imaging to try and get a glimpse of mysteries hidden at the bottom of the oceans around us. After all, with more than 70% of the earth’s surface covered in water, and the deepest part of the oceans being deeper than Mount Everest is tall, one can only imagine what other mysteries remain underwater. There’s an episode about Atlantis on the list that should make for interesting viewing.

While on the subject of Disney, their results out just this week continue to show impressive growth in Disney+ subscribers, now numbering 116m, more than double what it was last year AND 12% higher than last quarter, adding about 12m users from April to June. Ultimately, as always, it’s the quality and breadth of content available that draws users, and while sometimes it’s much more special to watch a film in a cinema (as we did with Black Widow), the rest of the time it just makes sense to stream in in the comfort of home. EL

What we're listening to.

It's always exciting when one of your all-time favourite bands put out a new album. Due to the advent of streaming and the way the music world now favours singles over musical collections, the pull perhaps isn't quite as strong as it once was back when you had to go to your local branch of HMV to pick your physical copy of a new CD off the shelf (as, you might be interested to hear that I remember doing for East 17’s 1995 release, Up All Night). Yet, still, despite it being different, when a band you love drops a new album, there's magic in the air. That happened this week when The Killers put out their new release, Pressure Machine, and it's truly magnificent. The Killers are a band most famous for big riffs (Mr Brightside) almighty hooks (Human) and even bigger choruses (All These Things That I Have Done) but this album is slightly different, slightly more sombre and closer to home. And it's supposed to be played in the home, rather than in a stadium in front of 80,000 screaming fans like most of their music. These are quiet, impactful songs, laced with violin, harmonica and acoustic guitar, and they've been written in order to transport you from your home system or headphones to the dusty landscapes of small-town America. It's a nostalgic album, especially sounding so for frontman Flowers, and its impact is significant. EJP

Podcast episode of the year! Brian Koppelman interviews Quentin Tarantino. Koppelman wrote the script for one of my favourite movies, Rounders, and co-created the brilliant series, Billions. One of his lesser-known claims-to-faim was his discovery while still at university of Tracy Chapman. For Tarantino there are just no words (I’ve tried writing this 3 times already). The pure exhilaration and enjoyment of watching a Tarantino movie is impossible to explain to someone who just doesn’t get it. The man is a genius. He has promised one more movie and then he will retire (hopefully not). This conversation was sheer joy. They chat about each others’ creations. Tarantino chats about his school years, where he says he was the dumbest kid in class. At age 8 he says he couldn’t ride a bike or tell the time. He asked himself “Is there something wrong with me?” And he concluded “I was just f*cking lazy”. He chats about the early years where he cobbled things together with no money. He chats about how his mother shouted at him when his schoolwork was a disaster and banned him from writing scripts. The highlight for me was the detail he goes into about the Austrian actor, Christoph Waltz. Drop everything this weekend and listen to two masters of their craft talking in great detail about things that we just don’t usually get to hear. Oh, and Tarantino has a book. He has released his book of Once Upon a Time in Hollywood. It's not the same as the movie and I for one can't wait to get stuck in. DC