Weekend Reading #248
This is the two-hundred-and-forty-eighth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 16th December 2023
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What we’re thinking.
Record highs on the Dow and the Nasdaq this week as everyone knows that everyone knows that the Fed pivoted. On the one hand, things are starting to feel toppy as evidenced this utterly ridiculous Blackstone holiday advert. On the other hand, retail flows have just begun to return to the market and money market flows have only just begun to reverse. Systematic hedge funds, according to Goldman, had their worst day on record years on Thursday and shorts are being squeezed big time. This suggests we could be bubbling up. It also suggests we are close to violence. Time for the most quoted market quote: The market can stay irrational longer than you can stay solvent. Let the price guide us. The biggest implication may well be that the inflation charade is over as the Fed is putting cuts on the agenda even before inflation is back to target. This could be because they are worried about recession given the extent of the tightening already. Or it could be political. Elections are coming! Either way the dollar is getting trashed and it's time to party for commodities and EM assets on the face of it. Will it endure? Time will tell.
What we’re doing.
The Barbican Estate, including the home of the LSO, the Barbican Centre, is sometimes bemoaned as the UK’s ugliest building (and has topped the polls for ugliness a number of times, too). But given we’ve been working out of the WeWork office at Moorgate quite a lot recently, the Barbican has become somewhat of a new favourite location for an afternoon walk, setting the stage for a change of opinion. To be fair, it’s nothing like the shiny buildings that cut through the city skyline. But aside from the brutalist nature of its design, it’s actually rather pleasant walking across the highwalks (which have been worked on for years and will soon fully connect Moorgate station to Barbican without getting to road level, even link up with bridges across London Wall. For a start, the apartments are generously sized, back when housing space wasn’t as scarce in Central London. There’s a beautiful church on the compound, St. Giles-without-Cripplegate, situated next to a school; sports facilities, greenery and gardens, as well as large pond with fountains in the middle of the grounds; and of course, the Barbican Centre itself, containing a cafe and a brasserie (who would’ve guessed?), adjacent to the Guildhall School of Music and Drama. Can something be so ugly to the point of actually becoming pleasant, having gone full circle? Maybe. There’s no doubt that the Barbican would be the fantastic setting of any dystopian film (incidentally, it was also featured in the War of the Worlds series), though in a real Zombie apocalypse it probably wouldn’t provide much of a deterrent given how accessible it has become. But perhaps also for the better, it’s a Grade II listed building so it’ll be here to stay for a long time to come. EL
What we’re reading
There is a famous story of the extraordinary proliferation of the genes of Genghis Khan. It stems from a 2003 paper, “The Genetic Legacy of the Mongols” in which the authors summarised as “The lineage is carried by likely male-line descendants of Genghis Khan, and we therefore propose that it has spread by a novel form of social selection resulting from their behaviour.”. The paper received widespread coverage across the world for its conclusion that 1 in 200 men worldwide and 1 in 10 Central Asian males were direct paternal descendants of single man who lived around 1000 years ago. As the article, a substack written by a fellow with last name Khan says, newer technologies since have allowed deeper analysis and it turns out that studies of some communities included in the original study as Genghis’s descendants have shown that other haplogroups (a family of maternal or paternal lineages that descend from a common ancestor) appear in their genetic mix. I’m not too sure about the science, but bottom line is that the doubts about Genghis’s oldest son, Jochi, not being biologically his (and many other missteps along the way) could account for how the original conclusion may not quite be so accurate. There is little doubt Genghis was a prodigious seeder of today’s male population, it just may not be as prodigious as originally thought. For the best and most entertaining historical reading of The Mongols, Conn Iggulden’s series is unparalleled. Bear in mind it is historical fiction though, but you will get a great overview and enjoy it too.
As I’ve written recently about Ronin, Sky Mavis’s blockchain which is focused on gaming, I thought it worth linking to this article on where crypto gaming (or Web 3 gaming as its now called) is headed with a focus on the Philippines. I’ve mentioned before this country’s unique crypto ecosystem, mainly stemming from the success of Axie Infinity, Sky Mavis’s first game. The article, by Leah Callon-Butler, goes deep into why The Philippines may be unique and the perfect fertile ground for further leaps in innovation and most importantly, engagement in Web 3. DC
What we’re watching
This clip, from a 60 Minutes interview with Novak Djokovic, is immensely insightful. In tennis, or any elite sport, there difference between the top players is all in the mental application of one’s talents. In this clip, Djokovic, makes that pretty clear and gives a window into just how he does it. There is no shortcut, its pure practice and preparation. You don’t just miraculously have an ability to win big points or play incredibly under pressure naturally. It takes hard work to get to that state. Coincidentally I’ve just picked up a new short book called The Inner Game of Tennis, written decades ago but a gentleman named W. Timothy Gallwey. I will report back. It was a glowing recommendation of the mental side of peak performance. Not only in tennis, but in other applications too. Like trading. DC
After wrongly assuming that the latest season of the Mandalorian on Disney+ was one we had already watched, I was pleasantly surprised to click on previews on Season 3 to find that there were 8 new episodes that came out a couple of months ago but which, amidst all the busy-ness, we didn’t even notice. The plot very much thickens, interestingly in the context of the storyline in another series from the same “universe”, Ahsoka, although one could argue that it thickens in a way that Star Wars purists may not entirely enjoy. Of course, cynics would argue that it’s all a ploy to sell more merchandise, and it could well be. But one couldn’t exactly leave a gaping hole in the Star Wars lore, especially after the iconic role played by Boba Fett in the classic trilogy, and objectively speaking – while as a series it doesn’t beat the action-packed episodes of Andor, it’s not that bad either. EL
What we’re listening to
According to Lex Fridman, Jeff Bezos has never done a long form podcast before so this conversation with him was too good to resist. I didn’t actually realise how deep he is in to his space company, Blue Origin. He is the CEO and very much acts like it. There are lots of stories about his youth and of course Amazon including lots of advice. Not a word about his divorce etc but it's pretty clear after this why the man is who he is. It was quite good to watch this partly (before I ducked out for a meeting and listened to the rest) as Bezos is a very solid unit in more recent times. I contrast his demeanour with Elon Musk. While Bezos appears comfortable and pleased with his position in life, although clearly still driven to build Blue Origin, this contrasts with Elon’s discomfort and seemingly endless desire to do stuff. Excellent conversation and given the scarcity of Bezos interviews (that are not part of Amazon’s investor relations) quite valuable to watch.
A cracker episode from the Meb Faber Podcast featuring Louis-Vincent Gave and also Harris Kupperman, who has made a name for himself on Twitter (and through his performance). It's mostly macro but also some snippets on Uranium, Boeing and some other individual ideas. Highly recommend. When it comes to these guys, and in fairness any idea from another investment manager, everything needs to be taken in context. Don’t rush and but the trades and ideas they talk about immediately. The ideas, which usually do come to fruition are priceless but for each investment manager, it needs to go into his/her own process. Really enjoyed this one.
Another cracker was this podcast featuring Yat Siu, of Animoca Brands, one of Web 3’s largest investors in the NFT and gaming ecosystem. Despite being aware of him for many years and his endeavours I’d never actually listened to a full conversation in which he espouses his ideas. And as I discovered it was to my discredit. There was some really deep thinking in terms of themes and ideas and how the ecosystem will evolve. In particular was one analogy which caught my attention. He spoke of different Layer 1 blockchains versus Ethereum. Much criticism of Ethereum is centred around the decentralisation aspect and how its decentralised nature sacrifices speed and introduces a clunkiness as inelegant solutions are created to solve this problem. Compare this with Solana or many other chains that offer less decentralisation but high throughput and speed. Siu compares Ethereum to a Western democracy and the rest to China. Most of the time China gets things done faster and more efficiently and everyone shouts about how the West can learn from this but every now and then the Chinese impose their will on something, and the rules change overnight. And on those, those in the West are most pleased they are not there. I thought this was a brilliant analogy. Worth listening in full. DC