Weekend Reading #136

Photo by Jonas Jacobsson on Unsplash

This is the hundred-and-thirty-sixth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 18th September 2021.

To receive a copy each week directly into your inbox, sign up here.

*****

What we're thinking.

Circumspection remains the name of the game in markets, as the seemingly unstoppable force of passive ETF flows (now officially dominating the flow picture vis-a-vis active managers) pushes head on towards the apparent eventuality of a taper. All eyes, including ours, remain keenly focused on how the market narrative shifts and how participants are positioned into these key events: quarterly options expiry this week, the Fed next week, and the at the corner of one’s eye, the growing saga of China’s Evergrande problem. Then again, maybe everyone is too bearish? 

On that point, it is becoming apparent that Evergrande’s eventual downfall might turn out to be much less dramatic than many expect. It's possible there will be years – even decades – of surplus construction of housing supply come to the fore. The implications get interesting beyond the financial losses from debt restructuring – if too many homes have been built, not just by Evergrande but by EVERY Chinese developer, how long will it take for them to be occupied and sufficient new demand to appear that warrants new construction?  

Given China has been the world’s largest consumer of commodities, and residential construction has been the largest hard commodity consuming sector within China (even more so than railways and roads), the implications on global hard commodities like copper and steel from a protracted slowdown (or even a pause) in construction activity could be sizeable. A supercycle perhaps, but not in the same sense as the previous one. 

Away from this, in the world of crypto this week we saw a spectacular pump and dump from the legacy crypto tokens, Litecoin. It was a fairly sophisticated effort it must be said because the protagonist managed to fool almost everyone (not us) into believing that Walmart had signed an agreement for Litecoin to be its official cryptocurrency partner. Almost all the mainstream media operators were duped into covering the story (seemingly without doing any background work whatsoever). The fiasco lasted around an hour, more than enough time for Litecoin to rally up from around $175 to $230 (around 30%) only to complete its round trip back down once it became apparent that the “press release” detailing the partnership was, funnily enough, a fake. These types of incidents provide sceptics with much fuel to slate cryptocurrencies and don’t help in the midst of an SEC campaign the outcome of which we don’t yet know. But apart from the seriousness of it, it's actually a helluva lot of fun as long as you know what you are doing. 

What we're reading.

An average human gets about 4,000 weeks of life on Earth. That’s 4,000 slow Monday mornings. 4,000 late Friday nights. 4,000 Saturday lie-ins. When put into that context, it’s terrifying how short that makes life feel. And with that nagging sense of not having enough time, we human animals, desperately try to cram as much as we possibly can into the limited time that we know we have available. Recognising our mortality makes time management even more important and, from this well of insecurity and fear, the recent productivity movement has sprung. And that’s fine – to do lists, morning routines, time-saving habits all have their place in a happy life – but an obsession with these routines and drivers can, pretty quickly, end up being counterproductive as the habits formed tire us out even more, lead us to be disappointed when we break them and, most importantly, make us focus on trying to achieve far more than we ever possibly can. And that final point is the crux of a recent book from Oliver Burkeman titled Four Thousand Weeks: Time Management for Mortals. It’s an excellent read and shows us how, despite knowing we have limited time left on this ball of rock, the key to better time management isn’t doing more – it’s doing less. Drawing on the insights of philosophers, psychologists, and spiritual teachers, Burkeman delivers a beautiful and profound guide to time and time management, especially designed for busy people who feel as if they’re never doing or achieving enough. It introduces tools for constructing a meaningful life by embracing mortality and finitude. As we all know, given the brevity of life and the 4,000 Saturday mornings you have available, how we use each one of them is all-important. And the first step towards doing this better should be reading this book. EJP

...and despite my proselytising above in an effort to convert you away from the religion of productivity, undoubtedly, one of the best emails I receive every week is from James Clear whose "3, 2, 1 Thursday" which claims to be the "most wisdom per word of any newsletter on the web.” And I agree and this week's letter included this great quote that really nestled in my brain from novelist André Malraux on courage: "Often the difference between a successful person and a failure is not one's better abilities or ideas, but the courage that one has to bet on one's ideas, to take a calculated risk - and to act." It also put me in mind of this great quote from author Robert Greene: "The need for certainty is the greatest disease the mind faces." Despite their abundance and the fact you see them slapped over every social media platform, it's still amazing how clarifying a quote can be and how hard an email newsletter can hit you. Anyway, as you were, that's enough about productivity. EJP

This story caught my eye as it involves Harvard geneticist, George Church. He is one of the key characters spearheading the genetic revolution and featured in the book I’m currently reading, The Code Breaker by Walter Isaacson (more on this when I’m done). Church has always had an interest in the woolly mammoth and the possibility of resurrecting it using genetics. As such news that he has partnered with Ben Lamm, a founder of Texas based AI company, Hypergiant, to form a new company called Colossal was thrilling.  It's backed by the Winklevoss twins amongst others. The aim of the company is to indeed resurrect the mammoth! Capitalised with $15m, more than Church has ever had to pursue this goal of his, the pitch is that re-integrating the mammoth to the Arctic will aid in the challenge to slow global warming and stop the melting of the Arctic. DC

What we're watching.
I like a television show that both entertains but also educates. That element isn’t the be all and end all – in fact, I’d rather be entertained than educated – but it’s always nice when you watch a good TV show that teaches you about something that you knew little about before. One such show that ticks both boxes is a recent release on BBC titled Vigil whose central plot focuses on a suicide (or is it a murder?) on a submarine. On the surface (pardon the pun), this looks like a pretty standard BBC crime drama but it would be standard if it was taking place on land. Lob in the underwater elements involved in a detective trying to investigate a crime that happened deep below sea on a nuclear submarine and you’ve got a wholly new and interesting prospect. Hence, I thought the show was excellent and I learned a heck of a lot about what life is like on a nuclear submarine and I concluded that it wasn’t a life that would ever be right for me. So, thank you Vigil for being entertaining, educational and a helpful guide as to what I should not be choosing as a leftfield career pivot. Coxswain on a nuclear sub is off my list. EJP

As Netflix continues to widen the breadth of content it produces, some really interesting cross-genre pieces are being made. First, there was Henry Cavill as Geralt of Rivia in the Witcher. Now, there’s an anime version of the prequel to the times before Geralt of Rivia, called The Witcher: Nightmare of the Wolf. Just to be clear, before anyone decides to seat any young children in front of Netflix to enjoy some cartoon time, this may be cartoon in appearance but it’s as Witcher-like as the real thing. But more importantly, this underscores the direction that Netflix is gradually taking: acquiring outstanding intellectual property and building more and more layers of content on top of it while expanding into different themes and genres. In a way, this echoes Disney’s earlier move to release trailers for an anime version of Star Wars. The content wars continue. EL

I file this under what we are watching as it's something so cool that it fits into both watching and thinking, I guess. One of the main reasons I’m so excited about NFT art is that it provides incredibly talented artists with the opportunity to monetize to a GLOBAL pool of demand in a way that has never been available to them. Take the example of Raf Grassetti. Grassetti is someone who hasn’t exactly come from nowhere. He is an established artist, first in the traditional world and then in the digital world. His speciality is sculptures. Again, first physical sculpting and then digital stone sculptures. Historically apart from monetising to a pool of niche collectors in his personal capacity, he has contributed to the world of gaming, most recently as art director for the God of War franchise. But what really has proved profitable for Raf is selling his digital sculptures as NFTs. From the famous Kevin Kelly piece, 1000 true fans are all that’s needed for a creator to achieve success. Now if your audience is reached through videogames, the game producer monetises it all and pays you a nice sum for your efforts. If you can reach 1000 fans directly then the world is your oyster. And Mr Grassetti is in the midst of discovery mode in his own right. This is just but one example of what’s to come. It's all just so exciting and such fun. DC

What we're listening to.

This week’s standout podcast must be this episode of Patrick O’Shaughnessy’s Business Breakdowns featuring none other than Sky Mavis, the gaming studio behind Axie Infinity. For anyone who still has trouble getting their heads around the economic principles of play to earn, as well as the in-game mechanics of Axie Infinity, this is a must-listen. It never ceases to amaze us that this is a game that isn’t even officially released on any app store, and is still in its alpha test stage, and yet has more than a million daily active users, clocking in $7-10m USD of revenues on its marketplace A DAY. We’ve written about how Play to Earn challenges both entrenched beliefs in business models within the gaming world (here) and also has the potential to create socio-economic change in the developing world (here) - and going through the actual business on this podcast strongly reinforces the view that this is a generational opportunity to own a chunk of a rapidly growing future. EL