Weekend Reading #336

This is the three-hundredth-and-thirty-sixth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 11th October 2025.

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What we're thinking.

We are starting to see some divergences in markets now. The AI and second tier tech stocks are entering the stratosphere but there is a new moon trade, and it is copper. Those stocks have gone nuts. It started off the back of Freeport’s force majeure at Grasberg but has not stopped since. The strengthening of the dollar in the last week or so hasn’t made a difference. Commodities are ripping all round. Even silver which is having its once in a blue moon moment. Surely these can’t keep going up at this pace, can they? Can they? Crypto continues to oscillate between bull and bear and to be honest we are struggling to contain ourselves when it comes to shorting the DAT companies. 

What we're doing.

Travelling to Indonesia, another place I’ve been for business many times before, this time with family is a new experience all round. Whereas my time before was always mostly in Jakarta but also elsewhere in Java - Surabaya, Medan etc, this time we kicked off in Bali. I’ve never been here before despite many Indonesian (and one English 😬) friends recommending it. 

The most surprising thing about Bali was how Indonesian it was. I expected that due to its Hindu culture and history it would be dramatically different. But all the brands from the banks to the minimarts, the airport to the petrol stations, all the same as up in Java. So, this gave a sense of familiarity from the start. 

We chose to stay up in the hills of Ubud rather than down on the coast, given that we would be spending time on the coast in Labuan Bajo after Bali. And the setting was beautiful. Rollling hills and rice paddies, lush vegetation and delicious fruit. Yet Ubud’s Main Street was seriously hectic. Not even peak season and permanent back-to-back traffic just to get down the road. Rammed with tourists and locals selling their wares. 

Ubud has many family-centric activities, of which we did many - zip lining through the rice paddies, washing elephants and swimming with them at the Bali zoo etc. It was great fun and quite similar to another place we know well - Plettenberg Bay in South Africa. Animal safaris and lots of family activities though the roads are poorer in Bali and the infrastructure less good. All round it was very hectic. 

Yet the highlight of Bali was without doubt its people. We have never experienced hospitality like this. From hotel staff to the drivers and even random people on the street, warmth pervades the place. And what we learned is that it is completely natural. It’s not the kind of warmth that is taught in hotel training school. It’s purely organic from a people who have strong cultural and community roots which in our view keep them from worrying about what’s going on in social media like most do in the west. There is no obsession with politics. No virtue signalling. Local communities are harmonious, religious groups get along.

One feature of almost every shop, restaurant or hotel is what they call “ceremonies” - essentially an offering of thanks adorning each location, burning incense and some local flowers. 

We had a wonderful time, not in so much the things to do (though those were fun too of course) but in the interactions we had with so many people we just can’t even believe it’s possible. And this, more than anything, is what we wanted our kids to experience. Europe and especially London just isn’t like this. Asia rises and as ever it is the people who make the difference. DC

What we're reading.
 
Meanwhile the biggest news all week surely comes out of Gaza where a deal appears to have been reached. If implemented over the coming days, it is a massive win for every party. Hamas loses, Israel gets the hostages back, security and a path to long term peace with Muslim nations that matter. The Palestinians get rid of Hamas, unlimited funding to build and the umbrella of the Arab nations who are keen to build a thriving region of peace and commerce. But you would never guess from reading the media would you. This thread sums it all up to perfection. The hypocrisy is exhausting. 
 
Another brilliant piece on Israel/Gaza and Trump’s genius (yes he deserves pretty much all the credit even if he says so himself) is this one by Tanvi Ratna. In it she lays out beautifully how this peace plan is way more than that for Trump and how his team envisions this piece of land as a key part of a new trade corridor. In this piece she illustrates how business and capital flows are being used to drive geopolitical outcomes. It’s genuinely genius. Will it work? Time will tell but if one has been wondering why suddenly Qatar and Turkey are so keen to suddenly bring Hamas to deal the answer is clear - business and opportunity (and an Israeli bomb in Doha a few weeks back).
 
This thread on cryptos so called bull market is also superb. It illustrates how ridiculous the whole thing is. It’s tongue in cheek and gets the point across clearly! DC
 
If anyone needed ammunition for the thesis that all the data centre capacity that’s being put in (think headlines like “OpenAI announces $x bn investment in [some chip company]”) might be somewhat excessive, this announcement about the performance of a tiny research model demonstrating how a 7m parameter model (vs 1.8tn parameters in the latest ChatGPT model) outperforms some of the heavyweights in the LLM world – fundamentally challenging the idea that bigger is better when it comes to models. How can this be? The model iterates on itself up to 16 times to refine its logic and get to a more precise answer. This has always been my view – that precision and being reliable in terms of giving CORRECT answers is WAY more important than an “experience” of being friendly, human or quick in replying. Quick replies that are wrong inspire nothing but doubt, requiring a double check on the answer given and nullifying any efficiency gains – much like the annoying overconfident know-it-all first year analyst on the trading floor that is 100% on enthusiasm but 0% on accuracy. If that’s what we want, which probably makes sense, then maybe we should be a little more skeptical of all of that data centre compute capacity because it doesn’t seem like more is more by any measure.
 
It was also Mid Autumn Festival earlier this week, though a team at the University of Kent got AI models to also take a look at the moon, and found two more potential cave entrances on the moon just by scanning publicly available NASA images. The two pits appear to be able to connect to underground lava tube networks that could potentially provide natural shelter from radiation, micrometeorite impacts and extreme temperature variations – in fact, temperatures are theorised to be around -20 deg Celsius (just about livable!) with these caves having diameters of more than 300m. EL