Weekend Reading #262
This is the two-hundred-and-sixty-second weekly edition of our newsletter, Weekend Reading, sent out on Saturday 6th April 2024
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What we're thinking.
Last week for us was all about Turkish politics as opposition party, the CHP, surprised everyone for a change and swept clean with victories all over the place in Turkey’s local elections. This is probably the most bullish possible outcome for Turkish assets given that now Erdogan has no choice but to double down on orthodox policies in the hope of taming inflation and creating an economic bounce back. He has 4 years until the next national election to get it right. The lira liked the outcome (by stopping to go down for a few days at least) and markets have rallied hard.
In US markets, after a somewhat broader move over the past couple of weeks, it seems that some steam is running out. Positioning is far fuller and although we have no idea when a material correction may endure, the risk reward seems to be shifting somewhat over the shorter term. Crypto has already begun pulling back from the highs and often in recent months this has been a precursor to moves in the broader equity markets.
What we're doing.
I’m with family in Amsterdam this weekend and following a rather dour rain shower upon our arrival (we brought some English weather with us, it seemed) the clouds cleared and gave way to a cool but sunny spring afternoon, setting the perfect scene to enjoy Amsterdam’s fascinating architecture and beautiful gardens and parks. The busy bicycle traffic that Amsterdam is famous for (amongst other things) alongside the iconic tramlines that run along its street and over its canals are a case study for low transport emissions that many cities have tried to emulate - mostly in vain. Why? Perhaps it’s a Dutch thing. But one other explanation could lie in the country’s French name: Les Pays-Bas. The country is essentially a flat plain compared to the hills, valleys and mountains of many other metropolises, including London. Flat terrain = great for cycling without the need for high end bikes, nor high end effort = mass adoption. It’s just easier, and that might be all the difference between mass cycling adoption and not.
Another thought came from the hotel we booked, the Mövenpick Hotel. I admittedly had a bit of a chuckle when I saw this available on booking.com, wondering what an ice cream brand was doing owning a hotel and that maybe one of the features of the rooms would be unlimited ice cream. Of course, the truth is ever more fascinating a story: Mövenpick started as a restaurant which prided itself on serving food as quickly as possible, expanding to 8 restaurants across Switzerland between 1945 and 1958, gradually expanding into a collection of hotels all around the world. The now more-famous ice cream was made initially for restaurant use only, but was subsequently licensed and outgrew the group’s core hotel business. So when thinking Mövenpick, it’s funny that we think “ice cream” instead of “hotels” - that a dessert item now licensed out and produced by Nestle dominates the mental real estate of consumers worldwide.
Was that the plan all along? Maybe, and if it were it would have been a genius move, a masterstroke for the marketing textbooks once they work it out.
What we're watching.
I finally watched the movie about the Williams sisters, King Richard. What I didn’t know was that Venus and Serene were involved in the writing of the movie and how accurate a portrayal of their formative years it is. Will Smith did a good job as Richard and the movie shows just how remarkable he was in how he planned for their success. It also shows just how unlikely their success was given their background. What a wonderful story. These girls didn’t have sport role models and now they are role models for millions of young girls. Superbly done all round.
What we're listening to.
Tyler Cowen interviewing Jonathan Haidt om his podcast was one of the best conversations I’ve seen on one of the most important topics for our generation. Not everyone agrees with Haidt on his recent work about the impact of social media and smartphones on kids and Cowen is not convinced. His main reasons are as follows: AI will help once AI autonomous agents can summarise and have conversations on our behalf, freeing up kids and teens to be screen-free. He also thinks that social media can be a force for good in allowing gifted kids to collaborate across the globe on topics on interest. And finally he is not convinced that the spike in teenage depression and mental illness since 2010 is caused by smart phones and social media, though it may be correlated to it. Cowen is a had a full go at Haidt, who responded cooly (mostly) and with facts to each question. On the whole I felt that Haidt made the points well and backed up his claims with evidence. Of the points Cowen made which left me with more to consider, collaboration across the internet on social media is important but I think that this focuses on a small segment of highly capable and driven youngsters who will use Twitter (in particular) for good rather than is relevant to the majority of youngsters. But this was superb and is highly recommended to see for yourself the many sides of what I believe is possibly society’s greatest challenge today.