Weekend Reading #203

Photo by Marco Chilese from Unsplash

This is the two-hundred-and-third weekly edition of our newsletter, Weekend Reading, sent out on Saturday 4th February 2023.

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What we’re thinking

This week’s rally was the most explosive in some time and smacked of short books blowing up. We will most likely hear in the coming weeks of funds blowing up given some of these moves. We have been in an excellent environment for stocks for the past month or so and it's difficult to know when or how this mini regime ends.  

Once again, this week we’ve been struck by how there is this constant public slandering of bears by bulls and bull by bears when things go one way or another. Our objective is to be neither a bear nor a bull. There is a time for being bullish and a time for being bearish. Predisposing one’s selves to being in either camp is a recipe for disaster. And it shouldn’t matter to an investor what other investors are saying – only as an ingredient into the mix. This week is another example.  

As far as positioning is concerned, this chart from GS paints a picture worth the time to contemplate:

When looking at opportunities we generally look for where the next big move will be and at this stage our instinct is the next big move is down once this positioning reset takes place. But we don’t know when as such we continue to trade the market as it appears to us, being guided by price action as always. What we suspect is that there will be dispersion.  

I spent a few days this week in Cape Town visiting family and I can tell you (completely unbiased of course) that whatever political problems plague South Africa, there are few better experiences on earth than Cape Town in the prime of its summer. It is a city of conflicting emotions for me as each time it seems optically to look better and better but each time I visit, more and more friends are making plans to leave. The new flex in town is showing off one’s inverter (battery fuelled backup power supply) stack as life goes on. And padel-tennis, which has taken Cape Town by storm (and the world it turns out) dominates the social calendar. I had a game and it was proper fun. Anyone keen to play in London let me know! DC 

What we’re doing.

A last minute trip to Athens earlier in the week to meet our software development team was very much full marks for efficiency – in and out within 48 hours, and it was rather pleasant to actually feel like Athens (at least the middle of it, around Monastiraki Square) is becoming familiar territory. As it happens, it’s been a year since we were last there, and while Greece is typically a “summer” destination, it’s equally pleasant in the winter, especially in comparison with London. On the Nachas front, being able to evaluate how much we’ve managed to build over the past year since we were last there also gave us great perspective on the progress we’ve made: software is never as simple as it looks, but sometimes it takes a step back to grasp how much complexity and clever engineering has gone into what appears to be a “simple” interface from the user side of things. We have a plan, with many more features to come. 

In between meetings and some very delicious kebabs and gyros, I also managed to pay a visit to Diskadiko, the vinyl record shop that was located next to our apartment. The time constraint meant that the luxury of sifting through their inventory of more than 30k records (according to the owner) was not available, but some hidden gems were certainly on sale – Air Supply, Santana, Bread and a Luther Vandross double LP. I haven’t had the chance to listen to them yet – they looked to be in relatively good condition (can’t complain for the price), and the odd crackle isn’t a problem unless they actually start skipping. EL 

Before leaving for Greece on Monday morning, I had the chance to have dinner at Tian Fu in Shepherd’s Bush, having one of my favourite Chinese dishes of all time: Mala Xiang Guo (Sichuan Spicy Hot Pot). Whilst the outward appearance of the restaurant seems unassuming, the pungent aromas as you enter the building are incredible, and the mouth-numbing spice of the Sichuan chili peppers are delicious and leaves you wanting more from the first bite. Whether it's for a cosy night in with friends or a special occasion, mala hotpot is a delicious and interactive way to enjoy a meal. With its complex and bold flavours, it is sure to be a crowd-pleaser for those who love spicy and savoury cuisine. HS 

What we are listening to.

Again I’ve been blown away by how poor the recent market-related podcast offerings have been. As such, despite listening to a few recently, I have nothing to recommend. I’m open to new stuff. Please send some recommendations. DC

 What we’re watching.

I wrote a few weeks back about a new HBO show called The Last of Us, based on the game, which was a global hit and how it heralds the welcoming of a new age of content for TV and film driven by gaming IP. Well, the show has had 3 episodes and some are calling it already some of the best television ever made. The Game of Thrones spinoff, House of Dragon, saw viewership drop already after episode 3 but Last of Us viewership is going up! Even Jeff Bezos had to comment on the “unbelievably good story telling”. In the end wherever it comes from, it's always about the story. And gaming IP provides so much great storytelling packed in a box ready for the film/tv industry to bring it to the (other) screen. It’s a wonder it took them so long. Could that be why CD Projekt has gotten a lift? Could there be a rush for gaming companies with top tier IP?  

On the flight down and back again I flew through the latest series of Israeli thriller series, Fauda. It was better than ever with the action taking place not only in Israel but overseas too. It is the fastest paced series I’ve ever seen and it is just so real. What’s wonderful is also the characters. As you get to know them, you feel their pain and conflict as they grow older and they face the life choices we all do, but with the pressure of being the best special force squad around. This season has been a major success in Arab countries too, topping the Netflix charts in Lebanon and the UAE, coming in second in Qatar and achieving top ten status in Turkey, Morocco, Jordan.  

"The series Fauda describes so well our local reality that it becomes almost anxiety-provoking, I am unable to watch it," 

This quote taken from an article on the I24news website, sums it up brilliantly. What a show. 

I also finally watched the first season of Better Call Saul – the Breaking Bad spinoff. Usually for me spinoffs are a disappointment but this is just fantastic. It’s witty, fun and quite deep. I have many seasons to go now and I’m quite looking forward to it.  DC 

Continuing down the line of Star Wars spinoffs on Disney+, we quite quickly worked through the first season of Obi-wan. To be honest, we started watching this despite being given rather mixed reviews about it, particularly that Ewan Macgregor was rather less action-packed than one would have liked a Jedi Knight to be portrayed. Our verdict? It certainly isn’t what Andor was in terms of action and suspense – definitely on the milder side. But aside from filling in the gap in the story of what Obi-wan Kenobi was up to between dismembering Anakin on Coruscant and reappearing on Tatooine with Luke, it was nonetheless a well-thought out gap fill in the storyline which bridges what are basically two fixed points in time, determined in reverse order, the latter 30 years after the former (in real time, not Star Wars time). There’s only so much a writer can do when the end game is already known, so all things considered, “not bad” is probably still borderline parsimonious as a verdict. It’s a bit better than that. EL