Weekend Reading #277
This is the two-hundred-and-seventy-seventh weekly edition of our newsletter, Weekend Reading, sent out on Saturday 3rd August 2024
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What we're thinking.
Well, we certainly chose a helluva two weeks to take a newsletter break. In the past 2 weeks we had the Trump assassination attempt (yes it was one although the media has done its best to make you forget already), Biden’s withdrawal and all sorts of ridiculous rumours in between and Harris’s associated rise as the anointed candidate (by whom exactly?). We have had more attacks and assassinations between Israel and Hezbollah/Hamas/Houthis/Iran. And finally related or not to the above who on earth even knows – we have had a significant selloff in Us stock markets. Friday’s jobs number catalyzed the real selling as we see it as now its pretty clear recession is coming. Markets are already attempting to force the Fed into cutting rates aggressively. The megacap tech/AI trade has collapsed but off an extremely high level so even as such we are still in the realms of correction territory unless something dramatic unfolds (which it very well might). As ever price action will be key!
All this means, as we intimated before, that this summer is probably a good one to take a much-needed break from markets. So much so that most of us at Three Body Capital are taking even more time in the sun. But don’t worry, this time we will be mostly switched on and the newsletters will continue until the morale improves (and even if it doesn’t).
What we're doing.
This weekend I’m in Paris, having been fortunate to be offered last minute tickets for the Judo finals. Writing this on the Eurostar from London, it’s very much a case of mixed expectations: on one hand, it’s my first time at an Olympics event - I didn’t even attend any in London - which leaves me optimistically excited; on the other, having lived through the London Olympic experience which was with hindsight very good, and knowing how complicated Paris can be, there’s a mild sense of dread with regards to the logistics of getting around. Fortunately, the weather forecast is for rain which hopefully takes the edge off the summer heat. EL
I recently had the pleasure of visiting one of the first international solo exhibitions of an artist who has taken the world of social media by storm. Werner Bronkhorst is a 23-year-old artist from South Africa. Now living in Sydney, he is perhaps most famous for how he paints vibrant scenes filled with tiny figures of people dotted about the canvas. His other work that he’s become known for is his humungous charcoal sketches of classic cars, often with bold letters placed in front. This collection was named “Forbidden Grass” a continuation to the drug related naming convention he started with his last collection; with scenes all in green from golf-courses to parks to tennis courts, it challenged preconceptions that green is a horrible colour for artists to paint. It seems to have fared well though with more than 4,000 people booking tickets to his exhibition over the weekend, selling out the venue. Similarly, he was recently approached by Wimbledon where he was commissioned to do a piece for their champions’ museum, and this collection sold out of both its originals and prints in a matter of seconds. It’s great to see such a young artist succeeding and one can only wonder where he will be heading next. HS
I conduced a Twitter/X experiment this past few days where I moved my settings from the “For you” feed to the “Following” feed. In English this means from the algorithm which suggests posts even if you don’t want them to the feed which chronologically lists only the tweets of the people I’ve chosen to follow. And let me tell you it made a huge difference. On the one hand I found I was notably less involved in the hot topics of the day and it was really a much better feeling. On the other hand, I follow a LOT of people and I had to wade through the torrent of chronological info to get what I needed. I will definitely continue to do this from time to time as a mini-cleanse of my Twitter-laden soul. DC
What we're reading.
I came across this paper (https://www.nature.com/articles/s41586-024-07624-5) published in Nature about the therapeutic mechanics of Psilocybin, aka the magic in magic mushrooms, which was an intriguing read. The key takeaway was that a large enough dose of psilocybin leads to dissociative effects, including distortion of space-time perception and ego dissolution, but also effects that persist after the initial effects wear off, leading to a persistent decrease in linkage and synchronisation (“Functional connectivity”) between the hippocampus (the part of the brain that creates memories) and something called a DMN (default mode network). If it sounds like we’re discussing a network system, it’s not too far from the truth - a quick wiki lookup of the DMN taught me that the DMN is what the brain defaults to when we’re doing nothing, like the brain’s idle mode processor. The implication of this reduced linkage is profound: increased hippocampus - DMN linkage appears to be correlated to depression, anxiety and suicide, and reduced linkage is associated with treatment. It follows that psilocybin treatments could well create a lasting therapeutic effect that reduces these conditions.
As an aside, when it came to studying the disruptive effects of the psilocybin dose during the trip, participants in the study were also asked to perform a simple matching task (audio prompts while in the MRI, asking them to look at the correct image projected to them), and it was shown that performing this task significantly reduces the dissociative (hallucinogenic) effects of psilocybin, suggesting that mental focus and “grounding” are able to counteract dissociative effects. EL
A piece of writing right up my alley where the writer, Matt Joass (thanks again to Tom Morgan for the link), talks about the left-brain vs right brain approach to investing and how with the left brain focus employed in recent times, we are eliminating the most potent tool we may have. This is an introductory post with the promise of more on this topic from his substack going forward. Needless to say, this is of particular interest to me!
The Free Press has been a bastion of quality truth-seeking journalism over the past years I have subscribed and this piece, offering advice to both US presidential candidates on how to beat the other is a prime example. Two writers pen pieces on this topic, one to each. No slogans or sabre rattling. Just practical advice. Abigail Shrier’s advice to the Republicans and Freddie deBoer’s to the Democrats. DC
What we're listening to.
I listened to a couple of pods on Brazil and Latam and I’m delighted I did. The first one was on the Live Players podcast with Samo Burja and Erik Torenberg, which I’ve enjoyed a lot recently. it focused entirely on Brazil and was a bit of breath of fresh air in that it was different to the usual story of mineral wealth and rising incomes and economic convergence with the developed world, which many so called analyst sprouts as opportunity. This was very real in talking about geography and most importantly about demographics. The issue of demographics is interesting as most countries in the world today struggling with deteriorating population growth and an ageing population are developed countries. Brazil presents the problem of a country with poor demographics before the country has completed its development to become a “rich” country. Many Brazilians I know say “Brazil is the country of tomorrow and always will be”. That pretty much sums it up.
The second podcast was Tyler Cowan talking to writer, Brian Winter, and was superb. Did you know that Brazil imported 10x as many slaves from West Africa than America did? Did you know that Brazil has the largest Japanese population outside of Japan? This and so much more came to light in this one including the pros and cons of Sao Paolo vs other global cities. One of the best listens in a long time!
Peter Thiel spoke to Konstantin Kishin about his views on America, progress and the world at present. Including a view that Wokism is an extreme version of Christianity, which is an interesting way of viewing it I guess. Bear in mind he was one of the key funders of Trump in 2016 and now is the key force behind new vice presidential candidate, JD Vance.
And finally on the listening side, Tushar Jain, of Multicion Capital chats alongside a gentleman who is one of the earliest fund of fund investors into crypto, Ray Hindi. The conversation focused on the difference between venture and liquid strategies in crypto markets and the pros and cons of both. They both believe we are entering a period where liquid strategies are about to become far more successful and popular too. Well worth a listen. DC