Weekend Reading #218

This is the two-hundred-and-eighteenth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 20th May 2023.

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What we’re thinking

It’s been just over two weeks since we got here to Asia, and while the jet set life is something that is often glamourised, one thing’s for sure – it's VERY tiring. So while it’s cool to give a different answer every time we get asked where we are, make no mistake – it's very, very tiring. But complaints about the tropical heat very quickly gave way to an observation that things here move at such an accelerated pace in comparison to what we’ve been used to – in a good way. Everyone’s keen to do business, and they do it quick: ask for a meeting? Instead of an email promising to check and come back before pencilling in a time 3 months out for a meeting that is highly liable to being cancelled and rescheduled, it’s 15 mins for a whatsapp reply, and 5 more minutes to decide on a coffee spot for a meeting the following day.

Perhaps it’s a cultural thing – after all, the “hardworking” stereotype had to be based on some degree of common observation, and as a friend in HK mentioned, working hours of 7am to 11pm are the norm in HK (and probably in Singapore, too) - and this isn’t even only the case for business owners, it’s for most salaried workers, the so-called “打工仔” as one would say. But perhaps it’s more than that – a belief that there are still great opportunities out there that need to be seized quickly and promptly, that the game – while difficult – is one worth playing for the prospective prize of life-changing wealth, and failing that, at least a successful career that is respected rather than derided for being poor in work-life balance. Indeed, it is on the streets of Singapore, Hong Kong and even Kuala Lumpur (itself far from being a “financial capital” of the region) where we truly perceive cities that are BOTH “hustling and bustling”, rather than just bustling with activity for the sake of it. EL

On the markets, it’s been AI week. As we have written before, it’s not about the valuations, or the inventory build or the free cash flow yield. It's about MOMENTUM. This is a story stock and anyone who stands in the way is standing in front of a freight train. It is the epicentre of the AI trade in the market and believe it or not it's still early. Volatility incoming for sure but it doesn’t seem to us that “normies”, cab drivers and parents are talking about AI stocks just yet. DC

What we’re doing

Since we sent out our last newsletter, we flew back to Singapore from Hong Kong and spent a few days there continuing with meetings. However, on Thursday morning we took the drive up to Kuala Lumpur in Malaysia as our first “Company Road Trip”. We left early at 5:30am which was enough time for us to make it in time for our first meeting at lunchtime. We spent just one night there, giving us just enough time to eat some of the local delicacies before heading back to “try” to beat the rush at the Singapore border. Whilst it was a 500km drive each way, it was certainly worth it to explore a new city! HS

At the suggestion of some friends in Hong Kong, I decided last week on the evening before leaving HK to take a ride across the harbour on the ferry. It was one of those touristy things which always felt like a bit of a waste of time, but suffice to say these friends were VERY convincing – and they were right. While I missed the light show (meant to be at 8pm, happening once a night I was told), I did get on the ferry in the end from Central, with a dose of Jay Chou while on the way there who was doing his concerts by the waterfront. No tickets needed for me to hear the concert. The ferry was packed, but the best part of it was the price: for the grand sum of around 5 HKD to get from Central to Kowloon, and subsequently 6.5 HKD to get from Kowloon to Wan Chai, one gets a great view of both sides of HK from the water. Stopping by for a walk in Kowloon along the Avenue of Stars (where one finds handprints of Hong Kong’s plethora of film and music stars), it’s clear that the legacy of these superstars continues to inspire, with no shortage of buskers putting on performances that were honestly respectably pleasant to hear. And as a bonus, we also got free flow Jay Chou from across the water.

Many may (jokingly or otherwise) poke fun at the Kowloon/Hong Kong Island contrast and draw a (false) dichotomy between the two, but it’s clear that what makes Hong Kong what it is isn’t anything that’s unique and exclusive to either “side” of Victoria Harbour. EL

What we’re eating

It was a long time ago that we last had this section in our blog, but I believe it’s certainly worth returning whilst we spend time here in Asia. On Tuesday whilst still in Singapore, we visited ‘Yi by Jereme Leung’, a contemporary Chinese restaurant that specialises in some very typical Chinese dishes but tries to add a modern flair. We tried the Peking duck that interestingly was accompanied by some more floral rose and plum sauce as well as pancakes of varying flavours each arriving in a unique colour.

Other highlights of this week included the Chendol I enjoyed at the Four Seasons food court in Kuala Lumpur, the mixed satay platter I managed to find at the Jurong East Hawker Centre in Singapore and the Duck Egg Char Kuey Teow 《鸭蛋炒粿条》 we tried at the Lot 10 Hutong also in KL. HS

To add to the above list: Chilli Ban Mian at ‘Restoran Kin Kin’ in Chow Kit in KL, which is an all-time favourite – highly recommended for anyone who happens to be in KL for any reason. On the flip side, I came across a tasty but historically questionable (in terms of provenance) dish called “Mongolian Chicken” which was basically fried chicken with pepper and curry leaves. Tasty, yes; Mongolian – probably not, although if anyone has ever been to Mongolia and can verify the existence of such a dish, please let us know.

While on the topic of food with randomly-assigned origins in their name, we should also set the record straight that “Singapore fried noodles” aka 《星洲炒米粉》 aka fried rice noodles with egg, veg, meat and a variably generous amount of curry powder is definitively NOT something one would find in Singapore. Singapore has many types of fried noodles, but none of them match this description. It can, however, be found across the border in Malaysia so someone out there either got something really wrong or took quite some artistic license with naming the dish. EL

What we’re reading

Many months ago, I discovered a gentleman by the name of Richard Werner, who is in actual fact the person who came up with the idea of quantitative easing. He originally intended it to apply to Japan in the 90s (and ultimately it was) but as we all now know QE was brought to mainstream fame by Ben Bernanke after the financial crisis in 08/09. Werner’s criticism of Fed-style QE is that it wasn’t implemented correctly. The entire point of his original QE design was that the money needed to enter the real economy via the banking system to be allocated PRODUCTIVELY to hundreds of thousands of small businesses which needed loans and financing to grow. However, Fed-style QE as he puts it ensured that the money was used to inflate financial assets and hence not only create bubble conditions but also have no effect on productivity and greatly exacerbate income inequality.

Werner is a controversial chap. I follow him on Twitter and many of his views may be considered conspiracy theory by mainstream standards but to be honest these days it’s almost impossible to know what that means anymore. I find his thought process clear and logical in most aspects which is why I am sharing this piece he wrote in Fortune magazine this week about central banks and how he believes they are responsible for inflation. This is well worth a read. For anyone who wants to understand where inflation really came from, this is article is definitely worth adding into the mix.

My curiosity was roused recently when I saw that Robert Kennedy Jr was polling at 14% in the Democratic Party primaries. I had no idea who he is, only the name is obviously famous. Turns out he has a pretty royal lineage, son of him namesake dad, Senator Robert Kennedy and nephew of President JFK. So, I pulled up a few videos and articles about him and it turns out that he is a very interesting fellow even apart from his famous name. He is a very famous and successful environmental lawyer who is well versed in many controversial themes. He is most notably anti-vaccine – long before covid came along and has some other alternative views. Like above with Richard Werner though, it's so difficult to know what truth is anymore. For example, if you look at RFK Jr’s Wikipedia page there are many sections like the following:

“Since 2005, he has promoted the scientifically discredited link between vaccines and autism,[2] and is founder and chairman of Children's Health Defense, an anti-vaccine advocacy group.[12] Since the onset of the COVID-19 pandemic, Kennedy has emerged as a leading proponent of COVID-19 vaccine misinformation in the United States.”

I added the bold parts. Many years ago, the paragraph would have been written without them. For my part, listening to him speak, he is articulate and thoughtful. Presidential in the old sense.

This article written by a fellow named Matthew Scully is absolutely superb and gives a long history of RFK Jr with all his pros and cons. I really recommend it. He is now polling at 20% in the primaries, and he is taking this very seriously.  DC

What we’re watching

Lin-Manuel Miranda is the creator of Hamilton, the musical. But before that he had just won a grammy for another production called “In The Heights” when he was invited to Obama’s White House to perform a song from it. As this great tweet thread says, he instead decided to sing a rap song he’d created about Alexander Hamilton much to the audience’s amusement.  The clip is that of him singing the song to Obama et al.

Hamilton was a great show, one of the best, most original musicals in a long time but what really gets me thinking is that Miranda had such confidence, such self-assurance to take the risk of singing that tune for the first time on such an occasion. Really impressive. I can imagine it was a calculated risk, given the audience. His odds were good, and he went for it. You can see it all in the performance. Pretty raw but so, so good. DC

What we’re listening to

With all the fuss about Gold recently I took the opportunity to listen to a Value Hive podcast featuring a Brazilian fund manager named Tavi Costa, whom I follow on Twitter. In it he presents very articulately the case for precious metals, talking a of a new gold bull market and going into some detail about production, growth, dividends and much more. A great crash course in what to do with precious metals, should you agree with his outlook.

Another good one was this Simon Sinek chat with legendary magician, David Copperfield. It’s a quick one but in it, Copperfield goes into his motivations for keeping going for well over 40 years as well as some insights into his mindset as well as some stories from his youth. He is the original showman magician that many of today’s street acts came from one way or the other. Proper fun listen. DC