Weekend Reading #152
Photo by Annie Spratt on Unsplash
This is the hundred-and-fiftieth-second weekly edition of our newsletter, Weekend Reading, sent out on Saturday 22nd January 2022.
To receive a copy each week directly into your inbox, sign up here.
*****
What we're thinking.
I remember as a young punk in late 2007 watching a CNBC interview with a Morningstar 5-star rated fund manager. He was grinning from ear to ear and waxing lyrical about his top percentile track record. At the time I thought wow this guy is super smart! And the truth is that I was right, he was super smart. But that means absolutely nothing in fund management. The graveyard of investment managers is filled with super-smart people. Needless to say, when I checked up on the chap’s fund a few years later, the performance was rather less stellar (and he was no longer its manager). We learn through experience, and we all make our mistakes along the way (we sure did) but the one thing to remember is that past performance is not representative of future success as markets change and so do people. The environment we find ourselves in is not one for those who have found success with a linear strategy over the past many years.
In fund management you get many sub-specialities and every now and then one has their time in the sun as the prevailing environment offers tailwinds. Using a tennis analogy, one can be a grass-court specialist or a clay-court one and win one grand slam many times over your career when once a year the conditions are perfect for your style. And then there are those few (Djokovic, Federer or maybe Nadal) who can win any tournament on any surface under any conditions again and again. Those are the great investors. Time is the only judge. Hopefully no owls are around!
What we're reading.
As a keen reader of non-fiction, my Christmas list is always packed, year after year, with books that have scooped up the top prizes as the best non-fiction for the preceding year. Hence, my list this year contained Empire of Pain, winner of the Baillie Gifford prize for non-fiction for 2021. It’s a fat tome, telling the untold and mysterious story of the Sackler family, one of the most discrete and wealthiest families in the US. The Sacklers made their cash from their company Purdue Pharma, which developed and sold, amongst other mind-bending drugs, the OxyContin painkiller, which is said in no small part to be responsible for the current opioid crisis in the US. Empire of Pain, written by journalist Patrick Radden Keefe, digs into the rise of the Sackler dynasty and the countless questionable ways and means that they employed to grow their empire. Frankly, the book is a bit of a modern masterpiece, a testament to the grit and determination of Keefe, who faced untold obstacles in his attempts to get the book written and published, to beautiful prose and thriller-like narrative. It also portrays a unique time in American and world history, neatly illustrating the excesses of America’s second Gilded Age, during which time the super-rich and super-elite class have made god-like mountains of money as the inequality gap continues to widen. Unlike other titans of industry or entrepreneurs of the last century, the Sacklers, it’s claimed in the 600 odd pages of this meticulously researched and referenced account, have made their fortune by profiting from human suffering, and it’s that conclusion that can only make you think a little differently about America and the world.
Re-reading books is hugely underrated. In this day and age, where we're all looking to consume more, and consume the latest and greatest, taking the time to go back to old favourites can oftentimes feel wasted. However, if you want to make a new year's resolution around reading, then I would recommend spending time revisiting old favourites and classics. Two articles I read this week backed up my thinking. Bethanne Patrick on The Atlantic put together a list of fiction titles from the last couple of decades that definitely should be re-read (or, read if you haven't been round once already), especially, I would recommend, Suite Française, by Irène Némirovsky. Ryan Holiday also put out a similar list on his blog, with an article titled If You Only Read a Few Books in 2022, Read These. I have talked in this newsletter before about the merits of re-reading favourite books on a regular basis. Like a favourite song or film that you reacquaint yourself with once in a while, books can also be a fountain of unending enjoyment on the second, fifth, fiftieth reading. The familiar is hugely pleasurable, especially when it comes to reading. EJP
Conn Iggulden is a favourite of mine, and I recently finished the first book of his newest historical fiction series, The Gates of Athens, which covers the great battles between the Greeks and the Persians. First Marathon and then Thermopylae. As ever, its full of action and even though the I know the formula of his epics like the back of my hand, this one was just pure enjoyment – and a bit of history too. DC
What we're watching.
If you’ve never watched Charlie Brooker’s series, Black Mirror, I can only recommend you start ASAP. It’s a show I’ve dipped in and out of over the years, and what I especially like is the fact that without the episodes being sequential, you can select, at random, which episode you’d like to watch of an evening. Following a recommendation from a knowledgeable friend, this week I watched an episode from Season 3 called San Junipero. It is an hour of beautiful, almost perfect, television, digging into a dark, confusing world, set in the 1980s, that, somehow, Brooker has conceptualised in his almighty brain. The themes at work will be familiar to anyone who has watched an episode of Black Mirror, being futuristic, disturbing, and dystopian. But San Junipero specifically has the rounded edges of a feature film, with the two lead characters, both incredibly acted, playing out a story that feels as if it has been on your television screen for way longer than an hour. Like all great entertainment, time flies with Black Mirror, especially with the episode San Junipero, and I cannot recommend it highly enough. EJP
After England's trouncing in the Ashes, the squad have no time for moping about as they head straight to the West Indies for a series of one dayers, T20s and Test matches. Who knows how the cricket will go, but watching cricket from the West Indies is one of life's great pleasures. There is something instantly recognisable about a West Indian cricket square, and the national team is undergoing a small resurgence, enough of one, indeed, to put the England Test team to the sword, no doubt. In the grips of a cold January here in the UK, hopefully the England T20 team can provide a bit of escapism and respite with a decent performance against the WIndies. Failing that, some nice shots of Caribbean beaches will be warmly received. EJP
Sunday evening, I introduced my boys to an old classic, “Castaway” with Tom Hanks, where A FedEx executive undergoes a physical and emotional transformation after crash landing on a deserted island. The sole survivor of the flight, Chuck washes ashore on a deserted island. When his efforts to sail away and contact help fail, Chuck learns how to survive on the island, where he remains for years, accompanied by only his handmade volleyball friend, Wilson. Will Chuck ever return to civilization and reunite with his loved ones? The boys certainly took a few true-life lessons, and I was asked several times if “I had ever crashed” and survived on an island before...
Last night, I was lucky enough to go to the Emirates to watch my team Liverpool coast to victory against the North London Gunners. Arsenal fielded a full-strength side against a Liverpool side who are missing their talesmen Mo Salah and Sadio Mane, who are in duty at the AFCON Cup. Liverpool put on a fine display against the home team, who were well off the pace. It is a real privilege to sit in one of the UKs top stadiums and watch two juggernauts go at it for the honour of competing in a final of an English competition. I'm now secretly hoping to get to Wembley at the end of Feb to watch my boyhood team beat the mighty Chelsea. DK
What we're listening to.
I listened to an excellent Business Breakdowns episode covering Peloton just days before it collapsed anew on news of possible hardware production cuts and job chops. As the title suggests, this podcast focuses on breaking down businesses to explain in simple enough terms to listeners what the basic investment case is and its key drivers. The major issue raised in the podcast, which featured guest, Vinny Pukki of Left Lane Capital, was that of Peloton’s cost to build its bikes. There is a bit of history of the pandemic too in which extremely unusual circumstances regarding supply shortages and extreme demand surges caused management to make a number of fateful decisions. There is no doubt that Peloton is an amazing brand with a die-hard fan base (as evidenced by its incredibly low churn rate) but it's clear now that the business could have been better managed. To listen to this episode is an education in all things Peloton and some context for what's unfolded. DC
Away from investing, this week saw the passing of Meat Loaf. I spent many many hours as a youngster listening to the grammy-award winning hit, I’d Do Anything for Love (But I Won’t Do That). At 12 minutes of playing time it went on and on and when time wasn’t quite so precious it was a treat. These days it’s even more of a treat to get 12 minutes to listen to a tune! DC
With the news of the passing of one of rock's most iconic superheroes, the only thing to listen to this weekend is Meatloaf. The Dallas-born singer, born Marvin Lee Aday, was best known for his Bat Out Of Hell album, which sold millions of albums worldwide and remains one of the top 10 biggest-selling albums ever. His family released a beautiful statement upon his death this Friday last, including this terrific sign off: "From his heart to your souls…don't ever stop rocking!" Well said, and with that in mind, I've quite a bit of driving planned for this weekend on Britain's motorways, and so I'll be singing along at the top of my voice to Rock and Roll Dreams Come Through, I believe, Meatloaf's crowning hit, his most sublime musical accomplishment, and a love song to rock music itself, celebrating how guitars, drums, voice and, oftentimes, a ridiculously high saxophone solo, is always there to help you through troubled times. As Meatloaf sings, "You're never alone, 'cause you can put on the 'phones and let the drummer tell your heart what to do." RIP and don't ever stop rocking, Meatloaf! EJP