Weekend Reading #386

This is the three-hundredth-and-eighty-sixth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 17th October 2026.

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What we're thinking.

As the see saw between bulls and bears continues this week in the AI space, we won't repeat ourselves yet again apart from saying that right now the price action indicates DISPERSION and ROTATION rather than a larger collapse. Breadth which is a favourite of many armchair enthusiasts has improved and basically everything outside the AI infra names has had some positive momentum over the past week. Two places which have NOT had positive momentum at all in recent months are Turkey, rocked by a domestic stock manipulation scandal and Indonesia which has been the subject of negative attention from MSCI. MSCI announced on Friday that Indonesia will be downgraded to standalone status form emerging market status as Indonesia's market has not filled the criteria necessary. They had warned of this for some time in light of some domestic stock manipulation. The Indonesian market, which was already performing poorly, collapsed double digits this morning. Turkish stocks, after cratering from the funds scandal over the past month, collapsed anew at the prospect of joining Indonesia in the naughty corner. Other than that, it was a surprisingly quiet week on the geopolitical front as we brace ourselves for the upcoming midterm elections in the US as well as the national election in Israel. South Africa also has important local elections coming up in the next few weeks. So, a lot going on as ever!

What we're reading.

The famous Kevin Kelly, founder of Wired Magazine (long before it lost the plot in recent years) has a substack and this week he wrote this piece called Swarm Intelligence which imagines a world where intelligent AI swarms permeate the air and enable everything we can do or imagine. It is a thought piece and as one would expect, superbly rendered. A swarm implies it is greater than the sum of its parts, something we see in nature with formations of birds or indeed simply the waves in the sea. Really cool piece to read. DC

As tax revenues dry up in France, we see another example of self-destructive behaviour, with a law tabled to tax swaps to stablecoins at 31.4% regardless of whether the stablecoins were cashed out into a bank account. Unfortunately, this isn’t a new tactic, with the UK having already a policy of treating ALL crypto transactions as disposals and the delta therefore liable for capital gains tax. This adds to increasingly desperate attempts to pull in more tax revenues, which is more likely to drive whatever crypto wealth remaining in France out of the country.
 
But more importantly, the recent data breach at Revolut in the UK has turned from data breach into life-threatening risk, as this crypto anon @rrealist claims to have been threatened at knifepoint by thieves that got his address off the Revolut data breach and made to hand over crypto. Whether this is a true incident or not, it’s a reminder that despite all the best defences (and no, not even hard wallets seem to work, because both Ledger and potentially Trezor got hit with exploits recently), nothing defends you against a wrench (or knife or gun) attack. The best operational security turns out to be anonymity. Dark forest style. EL

Word of the week.

I stumbled upon a fantastic word this week. NESTBESCHMUTZER - a person who acts like an animal fouling its own nest. Use your imagination to find use cases for this splendid word! DC

What we're watching and listening to.

Recently I subscribed to Youtube premium which for some reason I didn't ever do before. In South Africa it is a fraction of the price as in the UK and it is the biggest upgrade to my information consumption I've ever had. I now listen and watch everything on Youtube, hence the merging of the watching/listening section.
 
First up this past week was a chat featuring John Collison (Stripe) speaking to Mark Zuckerberg and Alexander Wang about Meta's new Muse personal AI assistant. It is a long and detailed chat covering a lot of history as well as obviously the hopes and dreams for what the product can achieve. I am of the view that this could be the biggest product launch we've seen in a decade given the potential for its scale and the benefits to Meta's earnings going forward are rather obvious too. The best part of the interview was watching Zuck and Wang struggle to drink their pint of Guiness while Collison (Irish) politely drank his slowly. One gets the sense he could have had 10 by the time that had a few sips.
 
My favourite AI guru by far is Steve Hsu and this week's Manifold pod was a detailed work through the numbers of mainly Anthropic and OpenAI to determine whether we are in a bubble or not. He has consistently stated that the frontier labs are in bubble valuation territory and this week's ARR numbers from Anthropic gave fuel to this view. I am open to this view but given the speed at which things change in an industry no one has ever seen before, am still less on the "this is the end of the AI trade" train than many others. I think the trade can morph and evolve over time and there are many variables both known and unknown still to unfold. For now, price action is saying Hsu is correct and for us as fund managers we certainly are aiming to capitalise on the mood of the market but with one eye always open and alert to any changes in mood.
 
Another interview on CNBC this week with Paul Tudor Jones at his Robinhood conference. In this one he states his view that 2027 will be a tough year for markets on the back of lower forced buying from corporate buybacks and the shovelling of paper into the market from the megacap frontier labs. Intuitively I agree with this idea but for us as hedge fund managers, 2027 is a long way away and the price action will guide us. I looked up PTJ's performance data over the past many years and was disappointed to find his numbers were poor. But then again, his risk profile as he had gotten older has likely changed so despite his numbers not being top tier anymore, his opinions are no less relevant!
 
Next up was an interview with Saurabh Mukherjea of Marcellus Investments, an Indian investment firm. I have been following him on X for years. He spoke to Raj Shamani (who has 17m followers on his Youtube). Much of the conversation was focused on domestic Indian equities but there was a fascinating section on global stocks and the AI trade. Mukherjea appears to be somewhat value driven and as such is skeptical of the megacaps’ ability to shift from capital light to capital heavy businesses without suffering. He is clearly a deep thinker, and I particularly loved the analogy of markets to Rahul Dravid. For those that don't know, Rahul Dravid was a great Indian cricketer who is legendary for his mental fortitude. Not flashy or a spectacular six-hitter, he was the player who ground out innings after innings under intense pressure in test matches year after year. This required incredible concentration and resilience versus today's model of six-hitters and T20 action. Mukjerjea says that we could be going back to a regime where the Rahul Dravids of the corporate world are valued once again. Boring companies could be valued higher. Could he be correct? I'm less sure given the attention-driven world we inhabit today but one never knows! Fantastic conversation.
 
Onto something a bit more esoteric. Mark Booth is the real name of an author who wrote under the name Jonathan Black. He wrote a book called the Secret History of the World. The book goes through a number of historical personalities and describes the side of them that was far more interested in the "unexplained" than their more famous mainstream work. From Newton to Tesla to Einstein to my favourite, Wolfgang Pauli, there is A LOT more to these people than officials record may suggest. I have had a fascination with Tesla for years and the revelations in the conversation with Rick Rubin on Tetragrammaton were mind blowing (literally).
 
On a similar note to the above, a year or two ago I wrote in this newsletter about a podcast series called The Telepathy Tapes, which was focused on non-verbal heavily autistic children who were apparently communicating telepathically. There is a new season of this out from the same researcher, Ky Dickens. The new series is focused on Reincarnation and looks for some kind of proof by tying reports mostly from small children to real people who lived years before. In this context, episode 2 is rather astonishing. In it, she covers the story of a small child, James Leininger, who provides information that was traced back to the Battle of Iwo Jima and apparently verified. With all these types of stories there are always debunkers who will say that they are exaggerated or that the kids were influenced or led. While this is of course possible, the best evidence is provided by Dr Ian Stevenson's prodigious accumulation of cases and his attempts to provide supporting evidence for each one. Serious food for thought and for those with an open mind.
 
On a lighter note, I went to see Tom Cruise's Digger this week. It is a bizarre black comedy which never in a million years would I associate Tom Cruise with. Cruise plays the role of Digger Rockwell, a fictional US oil billionaire, who's company is drilling in Greenland. The drilling causes a crack in an ice shelf which creates chaos globally. The characters are just insane. John Goodman plays a nutcase US president, and it is an all-round crazy movie. I still don't know if it was good or bad, but I will tell you that it is certainly interesting! DC