Weekend Reading #274

This is the two-hundred-and-seventy-fourth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 29th June 2024

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What we're thinking.

Well after briefly becoming the most valuable company on earth, Nvidia has pulled back. Megacap tech still looks strong for the moment and the rest of the US market does not. Although we may still have further melt up over the summer in some spaces, from our side as much as we will always try to catch a big move, we are focused on not losing money here. Things are no longer as simple as they were.
 
After a surge in the JSE, the realities of coalition jostling came to the fore in SA, with markets hanging on every headline and press release. Does the DA have the gumption to pull out of the coalition if they are not treated correctly?
 
And finally, a word on Chinese equities. After a strong surge from the lows of earlier this year in most Chinese names, the market has seen a very big pullback. There doesn’t seem much juice in there and we remind anyone that follows China that our base case is for cyclical pops and rallies rather than anything structural. There are not that many areas of the market that look too exciting really judging by price action but as ever we will be guided by whatever movements unfold. The market is always smarter than anyone who tries to pre-empt it.

What we're watching.

I watched the US presidential debate in full. It was absolute torture. And I have one word to describe my reaction after the disgusting debacle that has since unfolded in the Democratic Party circles and associated mainstream media. Revulsion. Everybody with half a brain could see this a mile away. But the charade of faux shock and concern that has played out thereafter is absolutely repulsive. Either the Democrats planned for this or they are just absolutely inept and walked into a car crash. To think that the public are so stupid, it is just insulting. And not that Trump did anything special. He used all his favourite words and was mostly vague as ever apart from criticising Biden. It’s so ironic that Trump is running on being the anti-Biden candidate just four years after Biden ran on being the anti-Trump candidate. But my goodness this was a disgrace to America, whose enemies will be licking their lips. When even Andrew Ross Sorkin of CNBC, who has the risk appetite of a neutered toy poodle, feels emboldened to speculate on whether its Newsom or not barely 12 hours later live on air, you know that the wolf is deep inside the sheep enclosure. I cry for what America has become. DC

What we're reading.

In a world where values we once thought were foundational in our societies are put into question, it has been fascinating to read Dostoevsky’s The Brothers Karamazov and it’s earlier relative, Schiller’s The Robbers. Both are set up as family dramas, but in both questions of ethics, values and morality are worked through in ways that are fascinating. The Robbers, the easier quicker read of the two, is astonishing in its amorality and at times shocking in its violence. It is a full-blown 18th century Pulp Fiction. The Brothers Karamazov’s characters are ultimately as confusing as those in the Robbers, but Dostoyevsky underpins the story with a serious amount of philosophical considerations. These are both works that show what happens at the edge of morality and why, maybe, pulling ourselves back from a place where we would leave foundational values of our societies behind is a good idea. LM

Notwithstanding the rather violent vacillations of the crypto world, “gradually then suddenly” still applies – with Coinbase announcing this week a tie-up with payments giant Stripe to facilitate crypto payouts as well as fiat onramps. Added to their recently launched Coinbase wallet which is as multi-chain as it gets for a self-custodied wallet and the easy to use (even if “basic”, because basic and simple aren’t bad things when it comes to onboarding the masses) Coinbase interface, whatever you think of crypto, Coinbase seems to be making all the right moves at the right time, especially as crypto seems to be turning into a material election issue.
 
For anyone (including me) that missed the Trump v Biden debate, seeing a post alert from Wait But Why saying that Tim Urban has put out a transcript of the debate immediately fired up the curiosity sensors. I wouldn’t call it a transcript per se, but the sad thing (aside from the occasional chuckle while reading it) is that as an interpretive summary of what probably happened, I wouldn’t be surprised if it wasn’t far from the truth. EL