Weekend Reading #372

This is the three-hundredth-and-seventy-second weekly edition of our newsletter, Weekend Reading, sent out on Saturday 11th July 2026.

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What we're thinking.

After whipsawing for a few weeks now, we think the market is at a critical juncture. The leaders of the near vertical move since early April have stalled and given back some gains. Are we at the beginning of a material down move or was this just yet another dip to be bought? As ever we don’t know. 
 
Our strategy as fund managers is never to predict what comes next but rather to have a range of outcomes and use the market’s clues to suggest to us what is coming next. We see some warning signs. A strong dollar. Some potential topping price action in leading AI names. A weak rotation. 
 
We work backwards. What could cause this behaviour? One possibility is that the new Fed governor is gaining credibility. He is establishing DETERRENCE. This hypothesis gains added weight as some of the narrative tools we use (we are paying subscribers to epsilon theory/panopticon) suggest this is unfolding too. The market’s default view of Kevin Warsh is that he is a Trump yes man. We don’t really know but we do know that if you want to have impact you need markets to believe you are serious. And his behaviour and communication to date suggest he is not messing around.
 
The other factor is the war in Iran. We don’t know what will happen with this stage managed “deal”. But markets are not telling us they care. Yet. Worth keeping an eye on but so far markets are not worried.
 
Circling back to the so-called MEMORY TRADE. We could dig our heels in on the fundamentals and sprout the cheap valuations and structural vs cyclical argument. Or we could defer to price action which is ringing alarm bells. Our assumption always is that the price will tell us what’s happening long before we work out what has fundamentally changed. So do with that information what you will. 
 
We are in a big moment for the market trajectory for the rest of the year. It’s time to pay attention.

What we're reading.
It looks like the Chinese are coming for the rockets too, as they operate the same playbook that has worked on almost everything else – turns out you don’t need to be first or even at the cutting edge, you just need to be good enough and operate at 10% of the cost and that’s a winner. So here they are, reusing a rocket launched at sea the same way SpaceX does. As always, one could potentially argue that SpaceX has the edge because it’s better/got there first/has more experience, but if China’s EV ventures so far vis-à-vis Tesla’s undeniable first-mover advantage is a worthwhile case study (and why not), we might be getting even cheaper rockets much sooner than expected.
 
Elsewhere in the world of politics, Turkey seems to have set a new standard for “door gifts”, presenting each guest to the NATO summit held in Ankara with a personalised Gümüşay revolver, with 6 rounds of live ammunition included, locally made in Turkey, echoing a long-standing practice of giving symbolic weapons to foreign leaders. Depending on how one looks at it, the aftermath of this gift can be either thought of to be problematic or ironic, as each of the heads of state struggle to get the weapon back home because of gun import laws. Some have been left at embassies in Turkey, while others are destined to be blanked. The more cynical point to the irony of how delegates to a defence summit turn to abandoning firearms as their first response, after all the talk about defending their countries.
Finally this list of predictions around AI, robotics, compute and its consequences for technology and society is pretty much food for thought. No idea who the author is but would tend to agree with some of these predictions – as always, who knows? Worth a read, and a lot of thinking – whether these will come to pass or not is less important than how if even a handful of these come true, the way it changes the way the world works will be much more profound than anticipated. EL

What we're watching.

Elon Musk repeatedly shares this brilliant tune and video this week. It’s called Sweet Land and is created by Heavy Pulp. It is AI generated all round but it’s damn good. It is rather curious as it hints at a new era for America and means in the direction of new technology. The UAP and free energy crowd thinks it’s to do with that. Time will tell but it’s really a fun video and great track. DC

What probably is the most memorable robotic hand to date is the one in Terminator 2, but whereas that was Hollywood at its best, Arnold probably needs to step aside for what seems to be the real deal now: Norwegian-American robotics firm 1X (never heard of them till I saw this) just released a video of its NEO robot’s hands, set to Vivaldi’s Four Seasons: no blood like Terminator but instead showcasing 25 degrees of freedom of movement, anatomically matched to the human hand. If you ask me, this takes us closer to a ChatGPT moment for robotics, because it’s another point where things go from “there’s no way a robot can do that” to “yes they can”. How well it does is almost irrelevant – the improvements will come. Won’t be surprised if a robot orchestra playing the Four Seasons in real life comes up at some point if this trajectory goes on! EL

What we're listening to.

One of my favourites is Darius Dale and here he is on Adam Taggarts pod once again. He explains far more eloquently the view that Kevin Warsh is not messing around and expounds upon the Fed risk. He also speaks about the ultimate bear market which may follow this AI boom. Again, we are on the same page in this regard. DC