Weekend Reading #330

This is the three-hundredth-and-thirtieth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 30th August 2025.

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What we're thinking.

Rotation, rotation, rotation! 2021 was a fascinating year to trade markets as we saw a big rotation. Leading up to the April 7th low this year we saw a taste of what rotation can be like. Current price action (especially Friday) and setup in accordance with macro and pretty much everything we are looking at suggests we are on the precipice of a large rotation imminently. AI names and crypto, having led the rally have attracted lots of passengers! It appears that a number of indicators are conspiring together. Weak dollar, US cyclicals, Commodities, Traditional emerging markets and China look very perky whereas second tier tech, AI (incl MSFT and NVDA) and crypto look horrible. Are we on the verge of a violent move? It could be. While we are naturally still bullish on many tech themes over time, we don’t really get too clever about holding through weakness as we don’t enjoy losing money. Ethereum for example is our most bullish long term idea but we fully understand that it has gone up in a straight line, retested its previous highs twice and failed and Tom Lee is running around acknowledging a meme of himself as Tom “Leethereum”.

Seriously? Hubris of the highest order. For that alone his crypto treasury company deserves a big short. There is lots of hubris around these days. Even Sam Altman warned this week that AI is in a bubble. The All-in-pod this week also spoke about AI reaching a bit of a plateau in terms of what they are seeing. So, the narrative is set. Throw returning inflation and the apparent capitulation of the Fed into the mix and we have all the ingredients for our above scenario. This price action is already suggesting the next step, but we think it unfolds rapidly now. There is also an angle where everything sells off for a while and we are open to that too.


What we're reading.

IRecently I can’t get enough of Ted Gioia’s writing and this week he came up with another gem. It’s entitled “The Glorious Future of the Book” and once again the theme is the dystopian angle on AI. Books are our last refuge for truth. Physical ones that is!
 
This is a great story from Citrini on X about a woman he met at a wedding who turned out to be a great investor (even though she didn’t know it).
 
In life I have learned to lean into synchronicities as they are called. Or coincidences to the uninitiated. One rather bizarre one recently has been the coalescing of ideas I have come across relating to a comparison between Donald Trump and Andrew Jackson (US president from 1828). The latest example is this tweet from Mel Mattison, which left me stone cold as it’s the first time I’ve seen someone articulate what has been in my head. The more I learn the more appropriate this comparison is. It coincides with a thought I have been having for some time (since I read George Gilders latest book) as to what happens after democracy. I personally don’t think its anything we’ve seen before but rather a hybrid model of many ideas, created in order to deliver outcomes for the voting population but maybe in a manner we are not used to. The way Trump has gone about his regime so far suggests he feels frustrated about the system and bureaucracy around him inhibiting him from getting things done. Critics will call it anti-democratic and complain of checks and balances being broken. And they will be correct in this regard. But it doesn’t matter. It just is. He is reshaping the governance model of America and in years to come we will the results. It will probably get messy. DC
 

What we're watching.

I came across a series called The Devil’s Plan on Netflix, a fascinating south Korean reality TV/game show that involves playing (and of course winning) highly complex and most certainly mentally challenging games – of deduction, strategy and puzzle solving. As is often the case, there’s the “game theory optimal” approach to many of these games, but add into the mix reality TV, a celebrity (to some extent) participants and the usual ability of reality TV to bring out competitive survival instincts, plus – most interestingly – the ability for the players to explicitly collude over a total period of 7 days with participants living with each other, game theory optimal doesn’t usually count here. It’s a fascinating watch – two seasons are on Netflix, a good dose of brain-melting (in a good way) entertainment.  EL