Weekend Reading #390

This is the three-hundredth-and-ninetieth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 14th November 2026.

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What we're thinking.

Another entertaining week on the markets as a tale as old as time played out in front of our eyes. A rich, powerful man had an affair (multiple) and it involved espionage and statecraft. There are many takes on the Jensen Huang affair (sorry) but the only thing we can be sure of is that we absolutely don't even know a fraction of what really happened. So, we will not bother to speculate. Nvidia's stock price has naturally cratered as a generational founder and CEO has been kicked out of this business. What will evolve from here who knows. Amongst all the action and the collapse in AI names, it is easy to forget that Anthropic is still having its IPO next week. It is interesting to us that they have decided to push ahead with it despite a dramatically lower valuation and a group of cornerstone investors that are made up of industry counterparties rather than the creme de la creme of the investing world. It is almost as though they believe the near-term window to extract value is closing. On the flip side, what we have been thinking is that maybe the IPO could succeed! We know its heretical to suggest this and it is not the base case amongst many various paths that can unfold. However here is a thought. Imagine that Anthropic is close to RSI (recursive self improvement where the improvements in models go exponential). If this is the case, they will outcompete everyone immediately in every field. How does one hedge for a future where profit goes to zero in everything except for one company. You need an option on that company. It may be the ideal portfolio position to protect against P(doom)!
 
As we hinted last week, we are doing minimal trading at present in our fund waiting for some further indication from the market itself as to where it wants to go.
 
The canary in the coal mine may be the South African Rand. It is trading TERRIBLY against the US Dollar. Either its telling us the macro regime of strong dollar, higher rates and yields is back, or the war is going to escalate (higher oil), or that the coalition outcome in Johannesburg is going to go the wrong way. But it is by far the weakest of the currencies we track over the past week. (More in what we’re reading)


What we're watching and listening to.

With all the backslapping and finger pointing on both sides after the US midterms, one could be forgiven for thinking that President Trump is no longer in office. But the reality is that he has 2 more years to go and there is A LOT that can and will happen. This interview with Ross Douthat is excellent. Trump rolls with the questions and gets philosophical towards the end when Douthat asks him some rather different questions. I really recommend this. One of the few interviews in recent times with Trump where the interviewer didn't try and get him to say things or have an agenda. Genuine, relevant questions and actually some revealing answers.
 
On the same topic, someone who is also able to separate the wood from the trees usually on these matters is Victor Davis Hanson who in this conversation, states his view that Trumps Presidency is Far from Over, citing references to both Bill Clinton and Barack Obama, who both suffered heavy midterm defeats.  DC

Statistics are always a bit of a contentious subject when it comes to their forecasting ability, but they are nonetheless fun (and potentially instructive), especially when presented with some humour. This account on Twitter called OddStats does this with a dry humour that is very likely found on old school trading floors. The dry humour that comes from having survived market cycles multiple times over. Some of the stats look contrived, along the lines of “the last time the SPY/QQQ did x, it was…”, and recently these show echoes of not just dot com days, but going back in the data even further, to great depression days. Of course, nothing to say that we’re going for another round of that, but we know what they say about history rhyming. EL

What we're reading.

It seems like every election season South Africa is at a crossroads. But this time surely it is. After all the excitement about Brazilian elections over the past few weeks the old Brazilian saying about themselves came true once again. My friends there like to call their country "The country of tomorrow and always will be" in frustration with the wasted potential of their nation. Could it be that the poster child of democracy and hope is actually South Africa? The Democratic Alliance made substantial progress in last week's local election and leads in most major cities. Already in charge of the Western Cape for 2 decades, Johannesburg and Gauteng was the big one this time. The DA won comfortably but not with the majority needed to rule the province and the City of Gold. Hence just like 2 years ago nationally, it is time for coalition talks. And the options are binary. It appears as though either the DA will rule with a reform focused coalition which may or may not include the ANC, or alternatively the ANC can put together a coalition of partners including the MK and the EFF which would likely bring further disaster to Johannesburg and be a big blow to the enormous optimism brewing in South Africa. The next week we will see the outcome. If it is favourable, the possibilities are endless. This article in Common Sense articulates this nicely. One stat I've head from Common Sense surveys is quite striking. 8 in 10 South Africans across all racial, religious and ethnic groups share the same values. This is huge and a big reason for national cohesion. Compare this to Europe or the UK and the numbers are way lower given the societal divide. Here's to hoping for a positive outcome! DC