Weekend Reading #361

This is the three-hundredth-and-sixty-first weekly edition of our newsletter, Weekend Reading, sent out on Saturday 24th April 2026.

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*****

What we're thinking.

More of the same this week as US markets roared onwards and upwards. Despite a clear bounce in many other markets, US tech is dramatically outperforming. Certain parts of the market and even the Nasdaq itself are exhibiting bubble like characteristics in our minds. And we love a good bubble. Our original thought years ago was that the AI bubble will be the biggest we have ever seen. A few times we have felt that the vertical moves could be the last but each time it has proved premature. We know that we are never going to pre-empt the big one and so each time we have a go and run the winners as much as we can. We never really know each time but looking at it now, looking at what has passed, what is unfolding, it is possible we are now entering into the real melt up stage where things can get silly. It’s tough to call just like that but that’s what we try to do! It pays to keep an open mind, nimble enough to exit should the price action deteriorate rapidly but our indicators are showing us we are not anywhere near there yet.

What we're listening to.
Despite all the doom and gloom the markets have gone straight up (quite literally). And in this episode of Acid Capitalist with Hugh Hendry he articulates clearly and with great panache and hilarity what is going on. In fact, the episode is called "the tape is calling bullshit". I laughed and laughed as he sprouted pretty much what we have been writing about for the past few weeks (although much better). Hendry is a character of note. He appears to often be high as a kite and a lot of the time I gloss over his podcasts as he rambles but every so often, he has a majorly lucid moment, and this is one of those golden moments. If you are struggling to understand how markets can be so strong despite everything this is for you. And its damn entertaining.
 
A treat was in store on Ashley Vance's Core Memory podcast this week as both Sam Altman and Greg Brockman appeared together to talk about where we are and where we are headed. This was a brilliant episode. Proper questions and lots to take in. The key takeaway for me was the comment from Altman that every time someone asks him about what is coming, he can use words to describe it but until you fiddle around and use it yourself you cannot possibly understand the power of what you are using. First, it was chatting to the LLM and then recently it was coding with it and using it as an agent. Future products or use cases we can try to imagine but we will simply just be blown away when they arrive. I also find that so much energy is spent on the worst-case outcomes of this technology (and yes of course safety needs to be factored in etc) but the upside is just off the charts. This is the best interview about AI I've listened to in a while. Forget how to invest in it, that is a separate issue. But to understand what is going on for the average person this is the one. DC

What we're reading.

Continuing from the thread above about Hugh Hendry's diatribe, this post from Mark Dubowitz puts in a nutshell what has occurred in the past couple of years in the Middle East. The list of achievements was completely unimaginable a few years ago. But yet here we are. 
 
According to this post, the UAE is targeting to have 50% of government run by AI agents within 2 years. It could just be a marketing ploy but if true, it makes sense and as a small nation it will probably work quite well. The war has set them back a lot reputationally and it isn't over just yet, but this type of thinking has become synonymous with the UAE. So much so that there is no reason to think they won't continue to evolve and attract top talent once the war is over and we enter into a golden age of peace and prosperity in the Middle East.
 
My two pet hates at present are sports betting and indeed this concept of betting on everything. We saw this week one of the special forces that captured Venezuelan president Nicolas Maduro bet on the exact timing with his inside info and all sorts of other cases like this in the Trump administration nevermind everywhere else. I find it all rather distasteful (and yes, I can see the irony coming from a guy who is a professional speculator). But this story really did bring a smile. Some guy placed a bet on the temperature in Paris, walked up to the thermometer, which was at a Paris airport, stuck a hair dryer onto it, heated it up, collected his winnings of 20x his initial bet and disappeared. Genius! DC
 
Japanese has always been a language that is equal parts fascinating and confusing – from having 3 different character sets, one of which (kanji) bears huge resemblance to traditional chinese, to pronunciation that sometimes resembles Chinese but other times not, and a single character having 5-6 different pronunciations depending on the context. Perhaps the confounding factor was the story that the Japanese were descended from Chinese explorers looking for ginseng – turns out that was pretty much made up too. My view has always been that the structure of a population’s language is a reflection of their intrinsic culture and origins, for example how Russian and Greek have so many cases and conjugations that the language becomes precise (much like the people), while say Bahasa Indonesia is much more relaxed on grammar but the nuance in meaning is carried by context, tone and local colloquialisms. In the case of Japanese, this paper I found (needs a quick translate on your LLM on choice) proposes a theory that pretty much sums up the origins of the Japanese people: that the language is convergent as a result of contact linguistics: that the Japanese language model matches creole and other mixed languages, an outcome of centuries of mixing both linguistically, culturally and genetically, between China, Korean, Far Eastern Russian dialects and other groups over time. And what of the Chinese characters, one may ask? It turns out that Japanese uses Chinese kanji characters as well as similar Chinese-character-looking shapes, but they’re borrowed as a convenient form of phonetic alphabet (similar to the Korean system) just as a result of centuries of mutual interaction. The language already existed, and the characters were borrowed, adapted and mapped. So the meaning might be the same as the Chinese equivalent in many cases, but pronunciation wise, the correlations are random at best. Probably the same way Cyrillic has common characters to English, but good luck trying to infer the pronunciation of Russian, Bulgarian or Ukrainian just by looking at a word.
 
I also came across this article on Twitter which came as a response to Naval Ravikant’s post about USVC, an SEC approved, retail friendly, low minimums vehicle to “offer” retail investors access to the “exclusive” walled garden of VC. Except its observation is damning – that the reality is that this retail “access” product is actually exit liquidity for VC firms, designed to leave hapless retail investors with the bag. It’s the kind of read that lays bare how the promises of big institutions of fairness and equality through ETFs have mutated.
 
I quote the most poignant part of the article for context:
 
This is what made American inequality politically survivable. You could accept the boss made four hundred times your wage as long as your 401k was riding the same curve as the boss's. The passive index fund was the purest expression of the deal. The cashier, the teacher, the plumber, all free-riding on the price discovery done by sophisticated capital, capturing the market return, going fishing. The market was a commons.
 
The bargain requires conditions. Public markets must to be the venue where value actually is created. Access to the upside must be broad. The marginal dollar of capital formation has to be a dollar the index can own. These conditions held for a long time. They don't hold anymore.
 
When companies stay private until they are worth a trillion dollars, public markets are no longer where value is created. They are where value is realized. What happens in the public market now is the distribution, not the compounding. Every percentage point of return that used to accrue to passive retirement capital during a company's growth phase now accrues to whoever was already on the cap table before the round that priced the company at two hundred billion dollars. Figma went public and traded down fifty percent from its private mark within weeks. Klarna dropped ninety. Unfortunately, the system is working as designed.
 
The industry has noticed that this leaves retail behind, and the industry has a solution, which is to offer retail the ability to participate in the private markets too. This is the pitch. Democratization. Access. Closing the gap. What's actually being offered is the right to buy, at the top of a decade-long private-market expansion, positions that insiders accumulated when the same companies were worth a thousandth of what they are today. USVC is not access. It is a distribution mechanism for positions that have already run. Naval's own pitch admits this.
 
Turns out access is great when you’re at the beginning of a run. When the run is about to end, your access is someone else’s exit. EL