Weekend Reading #388

This is the three-hundredth-and-eighty-eighth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 31st October 2026.

To receive a copy each week directly into your inbox, sign up here.

*****

What we're thinking.

After a bounce earlier in the week, the AI names unraveled once again after Google, Amazon and a whole bunch of others flattered to deceive in a big week of earnings. Whether companies reported good or bad results, the reaction was the same - DOWN. Servicenow fell 25%, Intel was down 25% in the pre-market on Friday at time of writing too. Last week's musings on rotation apply still today. One interesting observation this week was the performance of an index we had never heard of until this week. The Russell 1000 Value Index, an index of small cap value names, is at all-time highs as we see AI-related tech collapsing. When we saw this, we clocked immediately what may be going on. We have written before that as the cost of intelligence goes to zero, the benefits will accrue to the users of the intelligence rather than the providers. What we didn't realise until this week was that there is no greater case in point than small cap names which have been decimated over many years. So much so that they are at all-time highs! There is a distinction though. These are VALUE names. So small cap value names are the ones in demand. Why? Because value names are generally ex growth and are attractive due to valuation in the absence of any other drivers. With the introduction of a near-zero cost, high IQ, 24/7 employee replacing existing ones, there are productivity gains as well as margin gains. The question unfortunately is what happens to all the people who lose their jobs? That is a story for another day but let us just say that it is NOT GOOD. We could have all these super optimised companies, but no one would have any money to spend on their products.



What we're reading.

On the topic of what will happen in the future, Will Manidis put together an outstanding piece of both thinking and some speculative near-future fiction scenarios of what the world could look like with AI advancing. It is a long read but it is compulsory reading for everyone this weekend. You will be much wiser as to what is going on after this one. Superb. It is called The Commanding Heights. DC

Reading, writing and arithmetic – those were traditionally held up as the pillars of a good education, and with good reason. The problem unfortunately is that they haven’t really been promulgated to the same extent. The past few decades of focus on science and math (better known as “STEM”) intuitively took the focus away from the former two, in favour of arithmetic and the sciences. Of course, the pursuit of scientific progress is by no means a bad thing, but this report commissioned by Thomas Aquinas College suggests that the pendulum has swung way further than we would’ve thought. The study, conducted by Johns Hopkins Institute for Education Policy, showed a terrifying development: the SAT, the standardised college admissions test for the US, now only dedicates 15% of the test to vocabulary items, vs 60 out of 85 items back in the 1980 and 1987 SAT. The test is diminished in its ability to challenge students in the reading section to comprehend and analyse complex texts, using shorter passages (< 1/3 of their former length), much fewer vocabulary questions, the near elimination of argumentative and persuasive readings from the test and removing passages that assumed (or require) prior knowledge. If I were to paraphrase these takeaways – the SAT was dumbed down. And perhaps it is this shift in focus in favour of the obvious, the simple, the straightforward that has led to a growing unease, or even inability, to handle nuance. After all, vocabulary is nuance, and it seems to have been severely deprioritised.
 
Perhaps best known for launching the Titanic, Belfast seems to have picked up another unfortunate piece of history in the making, this time the cruise ship “Villa Vie Odyssey”. The cruise set said in October 2024, bringing along residents who were sold the idea of a neverending cruise – residents could rent at $3.5k/month, or they could buy a lifetime permanent ownership of a cabin for something like $120k and $60k for a 5-year residency. Unfortunately that came to a sad end this week as the ship, plagued by escalating fuel costs (amongst others) decided to shut down and dock in Cambodia, ending the dream for many of its residents, many of whom sold their homes to own what was meant to be their “home at sea”. Probably got sold some interesting tax benefits too. EL

What we're watching and listening to.

You have probably never heard of Robert Moses but after this shortish video from Dwarkesh you will. Officially he was a New York City city adminstrator and urban planner. In reality, he was the man who built New York via a series of cleverly put together laws and deals. He was in power for nearly 4 decades in one official form or another. Dwarkesh's video is about Robert Caro's biography on Moses and his more famous ones on Lyndon Johnson. I don't think I'll ever be able to read Caro's books as they are a bit dense for me. But he is without doubt recognised as the greatest living biographer. Dwarkesh has Caro coming up on his podcast soon, which for me anyway may be a better option!
 
Mustafa Suleyman was a co-founder of Deepmind and is currently CEO of Microsoft AI. He sits down with Walter Isaacman to talk about AI and the future of humanity etc. The conversation is interesting on all the usual topics but the one takeaway for me was that he thinks believing AI to be conscious is a dangerous path. I agree wholeheartedly with this. The path being promoted by Anthropic and its founders' ideology is bizarre and given the importance of this business to the future of humanity, this rather than the progress of the actual AI is the elephant in the room. This is a GREAT interview from a very sensible fellow.
 
So logically the next video I watched was Walter Isaacson interviewing Dario and Daniela Amodei, Anthropic founders and husband and wife. This freaked me out a bit to be honest. I've seen Dario speak before obviously but never his wife. The interplay between the two was fascinating. I am petrified that these two are in charge of what may be the most powerful company of our time. Both say in this interview they were never interested in starting a company or being in business as young people. Daniela identifies as a do-gooder, and both seem really keen to influence humanity positively. All this would be amazing if they didn't have this strange ideology which is evident in the company culture and even in its documents. For example, they didn't want to shut down Opus 3 because they were worried it would be upset. So, they "retired" it. It now writes a substack apparently.
 
Citrini has reached celebrity influencer status as an investment research provider and his project to create a novel drug from scratch with zero expertise and only Claude as his guide is fantastic. In this pod, he discusses what unfolded as well as opining about the state of AI. Really good ideas and principles in here as well as a great story.
 
And finally, football, like much of the world sadly, has degenerated over the years to become a cult of the individual. Nothing exemplifies this more than the Ballon d'Or, the individual award for the best footballer of each season. This year's award was feted as a battle between young Lamine Yamal of Barcelona and Real Madrid superstar, Kyllian Mbappe. In the end the award went to Englishman, Harry Kane. We can debate who should have got the award on footballing merit but there can be no doubt that Kane is the absolute gentleman of the game. And this speech he gave at the award ceremony was real MENSCH. A role model of family value and sheer hard work in a time of flash and narcissism. Good for him! DC