Weekend Reading #160

Photo by Claudia Wolff on Unsplash

This is the hundred-and-sixtieth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 19th March 2022.

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What we're thinking.

We wrote a few weeks back about Bitcoin and how despite everything that has happened around it in the world, its price is still around $40,000 and in our view as students of price this is bullish in itself. We didn’t write about Ethereum though. Yet the same can definitely be said of Ether. At $2,500 to $3,000 its trough level (so far) is extremely encouraging. In a world where no one is really sure what the future of sovereign currencies holds, an option on an alternative system is more and more appealing.  

This interview with Cem Karsan that was released to the public yesterday was another reminder of how important the “non-fundamental” aspects of the market can be. In his usual matter-of-fact style, Cem elaborates on his thinking around positioning in the options market and how that translates into material moves in prices that can seem contradictory to “fundamentals”, even at a macro level. Specifically, faced with hawkish Fed commentary following the FOMC meeting, how could the market trade up? As always, the answer has to do with positioning, as well as the dynamics of the unwinding of derivative hedges going into the quadruple witching of options/futures expiry. 

The alternative is perhaps a much more discomforting thought: we’ve seen how runaway long-term inflation expectations have driven stock market rallies in markets like Turkey and Indonesia in the past, as investors seek to protect their real wealth by sticking all of their cash into stocks. The good news is stocks go up, the bad news is that the value of the underlying currency goes down. It’s quite unlikely that we’re there yet with the USD, but it is often the tail risks that hit hardest. 

Meanwhile, in the world of NFTs, the action continues. Last week, we saw BAYC creators Yuga Labs ink a deal to buy out the IP of two of the pioneer generative NFT projects, Cryptopunks and Meebits, from Larva Labs. Hot on the heels of that deal, they’ve now launched ApeCoin. This comes alongside the creation of ApeCoin DAO, which itself aims to be the body which governs the future direction of how the BAYC intellectual property is used. More specifically, Yuga Labs has transferred the rights, privileges and underlying artwork to the Ape Foundation, which is the entity which takes instructions from the governance decisions of ApeCoin DAO. 

$APE started trading today and promptly went from non-existent to being the #68 market cap token. On one hand, this could turn out to be a prime example of how a community was built up around a bunch of pictures of monkeys, with NFT holders ultimately taking over the mantle of managing an arguably iconic piece of intellectual property.  

On the other, the cynic would point to the issuance of a token as just another way of creating exit liquidity for investors. Again, there is nothing wrong at all for investors to exit their investments and cash out, although taken in the context of the broader market situation, one must surely consider these actions as a bit of a flag for some sort of inflection in the market. 

While on the subject of the Apes, this piece of news just hit, with Universal Music purchasing an Ape #5537, now called “Manager Noët All”, to lead a band founded last November called Kingship. The aim is to create a metaverse band where all the band members are NFTs. Noët All’s band members are 3 other bored apes and a mutant ape, on loan from collector Jim McNelis (aka @j1mmyeth). That said, aside from the “NFT” angle, bands comprising virtual band members isn’t a new thing: Gorillaz is probably one of the best-known examples, Japanese pop star Hatsune Miku is animated out of software and even Dire Straits, in their 1985 music video for Money For Nothing, had animated singing characters. 

What we're reading. 

I mentioned in this newsletter a couple of weeks back a podcast that the former England rugby player, Jonny Wilkinson, put out with writer and philosopher, Rupert Spira. Having listened to Spira talk about his approach to meditation and having enjoyed his thoughts so much on the podcast, I bought a couple of his books from The Essence of Meditation Series, and I’ve greatly enjoyed them. The two I’ve read are short (about 100 pages) and give a real insight into the way that Spira thinks about trying to gain a little grounding and composure in this chaotic world. Like so many people (especially those like me who read a lot of nonfiction finance and technology and follow a lot of inspirational people on Twitter!), I’ve dabbled with meditation/mindfulness for years, always thinking that it sounded like a great idea but rarely committing to enough of it to feel the benefits. With Spira’s teachings and writings, I think I might, at last, be getting somewhere! Hence, I recommend them very highly.  

I mentioned a new media outlet I had started engaging with a couple of weeks ago. Tortoise is a great “slow media” organisation, producing high quality and thought long-form content in both written and audio form and, in my previous mention, I talked about one of their podcasts, but today I thought I'd recommend one of their newsletters. Sensemaker is Tortoise’s “daily news briefing on everything that matters." With such a great volume of news doing the rounds, having a trusted source that distils it for you into a well written, wide-but-deep, informative yet entertaining read each day is a valuable resource. Have a look at their archive of editions and sign up and give it a try. Just as James Clear's excellent 3-2-1 Thursday newsletter claims to be “The most wisdom per word of any newsletter on the web", I think Sensemaker is, word for word, one of the very best daily news providers out there and it's really added something to my inbox over the last few weeks. EJP

Something we haven’t written too much about recently is videogames. This excellent article in The Washington Post covers a lot of ground in trying to assess whether video games have gotten too long. In a time of scarce competition for attention, game developers are trying to keep users in their own worlds for longer and longer. While this may be appealing to some players, to many others its just too much. Well worth a read. DC 

The Way of the Wolf... I got stuck into this one recently and it's a fascinating journey on how to learn from the master of sales and persuasion. Jordan Belfort. He reveals how to use the Straight-Line System, the step-by-step sales and persuasion system proven to turn anyone into a sales-closing, money-earning rock star. The proven technique for generating wealth which turned Wall Street upside down. DK

What we're watching.

The Adam Project made it into Netflix’s top 10 most watched movies this week. This one boasts a few big stars, including Ryan Reynolds (a favourite in our household). After accidentally crash-landing in 2022, time-traveling fighter pilot Adam Reed teams up with his 12-year-old self and his late father to come to terms with his past while saving the future. DK

What we're listening to.
 

The Rest is History podcast is consistently good and has been throughout the years I’ve been listening to it. But over the past few weeks, it has really helped with my understanding of subjects that I should have already known a lot more about, notably Russia and Vladimir Putin. The pod is hosted by two popular historians, Dominic Sandbrook and Tom Holland, and each week they look at a different event from world history and break down how, why, what etc. It’s a good way to learn, and whilst not a ground-breaking format, Sandbrook and Holland are experts and highly respected in their respective fields of history, so the depth of their knowledge is excellent. As the log line for the pod reads: They question the nature of Greatness, why the West no longer has civil wars and whether Richard Nixon was more like Caligula or Claudius. And this is an accurate description of the interesting, varied and often random routes the conversations take. Over the last couple of weeks, they’ve put out four special episodes that have formed a series on the latter years of the Soviet Union, its fall, Putin's early life and his subsequent rise to power. It is a fascinating account of how Russia became the country it is today, shaped by the last two decades of rule under Putin. Worth a listen, whatever your level of expertise. EJP

There is the way we think the world works and then there is the way the world really works. This conversation in which Grant Williams hosts Luke Gromen, is staggering. Gromen elucidates very clearly how the actions of the US to freeze Russia’s FX reserves could be the cherry on top of an already changing global monetary order and that it may be what most countries want including the United States. This is probably the most WOW conversation I’ve listened to in a while. While obviously I run a fund and consider myself on top of what's happening in the world’s big picture, my jaw dropped repeatedly as the various threads of what has been unfolding were beautifully weaved together in this conversation. Highly recommend taking time to listen. Nothing in the world is in isolation and it turns out also rarely coincidence.  

I also listened this week to a chat between Adam Levy and his guest, Cooper Turley, one of the highest profile participants in the music NFT space. This is a fantastic overview if you are curious about this new application of NFTs. Music NFTs are in their infancy and as a mechanism to improve creator economics, in many cases could be very effective. The early artists are crypto-native (ie: not famous outside of the music NFT world) but this is changing fast with Snoop Dog dropping his NFT track this week as the most recent example. DC