It’s A Doge’s Life

“I can calculate the motions of the heavenly bodies, but not the madness of crowds.” (Sir Isaac Newton – upon losing the equivalent of $3mm in the South Sea Bubble of 1720)

“Dogecoin can be a good barometer for how far from reality things can get.” (Billy Markus, creator of Dogecoin – he invests his money in index funds)

Being an atheist does have its drawbacks. While Richard Dawkins’ The God Delusion serves well as an antithetical holy book, when it comes to spiritual guidance the deprivation of the opioid of choice for the masses leads one to alternative and somewhat unconventional sources. In my case this oracle is frequently a certain pot smoking dude from Venice Beach, but when it comes to the curious case of Dogecoin, the wisdom of Snoopy the dog resonates. Consider this riposte to the Bhagavad Gita posed by Snoopy: “My life has no purpose, no direction, no aim, no meaning, and yet I’m happy. I can’t figure it out. What am I doing right?” In other words, there’s shit that goes down in the cosmos that makes no fucking sense whatsoever. Like Dogecoin, for example.

Over the last few months I have, albeit somewhat reluctantly, come to accept that cryptocurrencies – or more appropriately crypto assets – will occupy a permanent place in the investment universe. The notion that Bitcoin and its various offshoots displace conventional currencies continues to strike me as fanciful. Aside from the fact that the central banks of the world would never allow it, the inherent volatility and the friction associated with using crypto as a means of payment render it impractical as a currency. For example, using your Bitcoin wallet to pay for your frappuccino sounds cool – until you realize this is taxable event and start to apply FIFO accounting to your crypto acquisition(s) and disposition(s). What is more persuasive, however, is the idea of Bitcoin, with its embedded scarcity and security features, becoming an alternative to gold as an inflation hedge in an environment where Modern Monetary Theory must be treated with a healthy degree of skepticism. After all, beyond a somewhat arbitrary acceptance cemented by history, gold has no feature that renders it singularly suited to this role. Other crypto assets derive value from multiple use cases, most notably Ethereum. With its smart contract functionality, Ethereum and its progeny seem destined for a central role in the creation and trading of Non Fungible Tokens (NFTs), and the recording and processing of financial contracts generally. Short term speculative excesses – of which there are plenty in the current environment – notwithstanding, it is reasonable to posit that the powerful longer term secular trends will drive the value of crypto assets higher….maybe even to the moon…

Even NFTs, cutting through all the noise and the hype, should be recognised for what they are: clever tools, utilizing the blockchain technology that underlies all crypto assets, for solving the issues around the authentication and transferability of digital assets, and more generally empowering digital creators of all type. The fact that some dude who calls himself Metakavan decides to pay $69mm for Mike Winkelmann’s (aka Beeple) Everydays is astounding, but perhaps no more so than an anonymous collector paying $10mm for Damien Hirst’s pickled fish, or indeed Van Gogh’s failure to monetize any of his art in his lifetime. As art dealer Stefan Simchowitz says, “society gets the art that it deserves”. Incidentally, Simchowitz – clearly a dude who speaks his mind – goes on to describe the NFT oeuvre as “largely sexist, racist, immature, xenophobic, sophomoric and anti-art.” Monty Python would agree. In a delightful expression of quintessentially British irony, John Cleese decided to auction – as an NFT – a rudimentary sketch of the Brooklyn Bridge by An Unnamed Artist Named John Cleese, while observing that “the world has gone terminally insane”. Appropriately, the auction terminated on April Fools’ Day. To which Beeple and Metakavan might legitimately respond “yeah, well, that’s just, like, your opinion, man”.

All of which is a longwinded way of saying one can actually rationalise much of what is happening in the world of crypto – except for the bizarre saga of Dogecoin. While there have been multiple cases of absurdly overvalued assets in the history of markets, Dogecoin is unique inasmuch as it was intentionally designed to be worthless. Unlike stocks, there is no residual claim on the cashflows and assets of a business, and unlike bonds, there is no contractual right to demand repayment. Unlike Bitcoin, there is no intrinsic mechanism to preserve scarcity, and unlike Ethereum, this is no current or future commercial application or use case. Unlike tokenized native digital art, Dogecoin has no pretensions to be a collectible; by design Dogecoin is fungible rather than non-fungible i.e. every Dogecoin is the same. And of course, unlike tangible assets like real estate or fine wine, Dogecoin has no intrinsic worth. Even its name seems like a screw-up – why not Doggy-coin, evocative of cute puppies, rather than Dohj-coin, which conjures up images of Venetian nobility with funny hats? It’s creators are repeatedly on record as saying they intended Dogecoin to be a joke. Like Snoopy’s life, therefore, Dogecoin has no purpose, no direction, no aim and no meaning. And still it’s worth a mind bending $50bn. About the same as Ford Motor – though Lehman Brothers, valued at circa $60bn at its peak, might be a more appropriate comparison.

And just when you think it couldn’t get any sillier, Dogecoin fans proclaimed April 20, apparently celebrated annually as Weed Day, as Doge Day. Presumably the time to take Dogecoin higher? I suppose every dog(e) has its day, so why not? They failed, rather like Al Pacino’s bungled caper in Dog(e) Day Afternoon, but regardless their commitment remains unwavering. You could not make this shit up.

In case you’re wondering, I have no explanation other than the somewhat trite observation that we seem to be in midst of the mother of all speculative bubbles, with Dogecoin surpassing Gamestop as a metaphor for a world gone barking mad. Indeed, it is a case of more new shit coming to light, in this case a Dogeshit canine mutation. In an environment where gambling is tightly regulated and access to relatively safe investments restricted to investors who satisfy suitability tests, it blows my mind that the powers that be allow leveraged bets on worthless “assets”, not to mention the mailing of checks that are frequently directed to rampant speculation rather than directed consumption. Or the shocking irresponsibility of the redoubtable Elon Musk, with his cult following among the Reddit crowd, and his incessant Tweets promoting Dogecoin, ostensibly as a joke. The latest from the self proclaimed Dogefather – doing it dogey style on Saturday Night Live. Like I said, you could not make this shit up…

All I can say with certainty is that, as is the case with all bubbles, this too shall burst. Even a genius like Newton was taught a painful lesson in the laws of gravity as applied to speculative assets. And when the other shoe drops, there will be books written about it – perhaps even by yours truly. As for the title, it’s obvious of course. Who Let The Doges Out.

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New Shit Has Come To Light

While money doesn’t talk, it swears. Obscenity, who really cares? (Bob Dylan)

Move over Warren Buffet, forget Howard Marks’ copious memos, and who the f**k are Graham & Dodd? The new oracle of the investment universe goes by the delightfully ironic Reddit moniker DeepFuckingValue, and in place of Buffet’s peculiar fascination with Dairy Queen, he seems to have a juvenile penchant for “tendies” dipped in champagne, while celebrating his latest “stomp” on his Roaring Kitty YouTube channel. He trades from his basement and favors a bandana. I have no clue why, it sounds cool I guess? For him and this new breed of “diamond hand” investors, “fundamentals do not matter” and “we have different ways of making money that they don’t understand”. Jaime Rogozinski (creator of the WallStreetBets forum) describes it as follows: The boomer says to the millennial, ‘what are you, growth or value?’ and he goes ‘I’m a meme investor, and I’m kicking your ass.

As The Dude so memorably proclaimed, new shit has indeed come to light. Some of it is perhaps as profound as the possibility of Maude Lebowski kidnapping herself, but, regrettably, much of it is total crap.

Lets start with the schadenfreude, with all its underlying political undertones, around hedge funds and short sellers getting their just deserts, and the equally misplaced David vs Goliath narrative promoted by the media. Here’s a news flash – short sellers across the board have already had their butts kicked, lately by Jerome Powell and consistently by Elon Musk, no comeuppance required. As renowned short seller Jim Chanos points out, “we’ve been beat up and left for dead”. Besides, short sellers play an essential role in financial markets, cleaning up corporate carcasses in the same way hyenas sanitize the savannah. Reflect also on the collateral beneficiaries of last week’s frenzied market dislocations. Controversial Chinese billionaire Wang Jianlin, the controlling shareholder in struggling AMC Entertainment, rejoiced as his holding ticked up 300% on Wednesday as the Reddit crowd piled in, while PE firm Silver Lake cleverly cashed in a tidy $113mm gain on a $600mm investment it had certainly written down, if not written off. As for Stanley Plotkin, whose Melvin Capital lost 53% being on the wrong side of the GME trade, he is currently occupied knocking down a neighbour’s Miami waterfront mansion to build a tennis court, and his downsized $8bn hedge fund corpus still pays him $160mm in fees just to show up to work. Or not – perhaps trading poolside in Miami Beach, sporting sunglasses instead of a bandana?

Some – like the always provocative Chamath Palihipitiya – have promoted the notion that the collective wisdom of crowds and the sophisticated analysis of many among the Reddit crowd are superior to the the best and brightest of Wall Street. If so, consider the following: Elon Musk bought a hand knit sweater for his dog, prompting a “I kinda love Etsy” Tweet – and an immediate 8% pop in Etsy stock. On the same asinine canine theme, Dogecoin – a cryptocurrency or a joke or maybe both – started on Reddit with “lets make Dogecoin a thing“, but plunged 46% in 24 hours as Elon clarified that his Tweet featuring a whippet on the cover of an apocryphal Dogue Magazine was meant as a joke. Or the morons who bought the wrong AMC (AMC Networks rather than AMC Entertainment) and the other Zoom (Zoom Info rather than Zoom Video). Or the 800% run up – in ludicrous mode – in the shares of the bankrupt Hertz Corporation, which, but for SEC intervention, may well have unloaded $500mm of worthless paper on the Robinhood crowd. As Michael Burry (of The Big Short fame and an early GameStop advocate) says, this is “unnatural, insane and dangerous”.

There is obviously a macro and an environmental overlay to the Reddit trading phenomenon. With interest rates near zero and trillions of dollars looking for a home, inevitably narratives rather than numbers will drive valuations. But some stories are more compelling than others. While I cannot wrap my mind around the Tesla valuation, I get the vision and the drive of Elon Musk, and the massive opportunity around electric and autonomous cars, solar power and energy storage. And the math around the present value of a dollar 10-years from today being worth 50% more at a 1% discount rate rather than at a 5% discount rate is likewise undeniable. As for the so-called meme stocks, perhaps, as Scott Galloway says in a much vilified tweet, “arm young men in a basement, not at work, not having sex, not forming connections, with a Robinhood account, a phone and a stimulus check, and you have the perfect storm of volatility”. Or maybe its just the age old YOLO/FOMO that is the hallmark of all bull market climaxes. All bubbles need a source of hot air, and we might have found it on Reddit.

A word also on Robinhood, now much maligned by the Reddit crowd, but perhaps for all the wrong reasons. Robinhood’s decision to impose restrictions on fresh trades on heavily shorted stocks was – as explained belatedly – purely a function of capital requirements by the clearing houses. Had this been announced upfront, it may well have prevented near universal opprobrium, including from the impossibly unlikely pairing of AOC and Ted Cruz. However, as will emerge over time, when a financial institution is forced to max out on its bank lines and raise $1bn in equity overnight, the issues are usually existential – an uncomfortable disclosure for a securities firm given the self-fulfilling nature of such pronouncements. What perhaps deserves to be highlighted is the inherent hypocrisy in its name and its business model. As Tim Cook says, when an online service is free, you are not the customer, you are the product. Robinhood’s real “customers” are the likes of Citadel Securities, which pay Robinhood for order flow, rather than the merry men of Reddit forest, in exactly the same way as Facebook monetizes our presence on its platform with advertisers. And the implication of this addictive gamification of investing on young minds is every bit as profound as the now apparent hacking of our minds by the Facebook algorithms. Consider, for example, the case of a 20-year old Robinhood customer who committed suicide after seeing a $730K negative balance on his account related to options trading. The notion that ensuring young Americans are given enough rope to hang themselves has become a cause celebre strikes me a monumental blind spot on the part of the media, the twitterati, and the powers that be.

If its not obvious where I’m headed with this, it all ends in tears for the little guy. Just like it did for the Miami stripper in The Big Short, who owned five houses and a condo all bought with 95% leverage and became a symbol for the madness of the times. For all you guys on WallStreetBets – and it seems to be mostly guys – time to declare victory and move on. The algorithmic traders have already electronically trolled your chat groups, and whether its Dip Alpha (buying the dip faster) or Flip Alpha (getting the f**k out faster), will always be a jump ahead of you. Yes it sounds cool to be in the headlines as the guys “who broke Wall Street”, but you didn’t, and you don’t stand a chance when the market turns. And if you’re sore about bailouts in 2008, as I believe you are, remember that Goldman Sachs is still too big to fail. You, on the other hand, are not. And if it all blows up – well, as Dylan says, It’s Alright Ma, I’m Only Bleeding.

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When Death Whispers

Not everything that is faced can be changed, but nothing can be changed until it is faced. James Baldwin

English cricket captain Tony Greig’s “I intend to make the West Indies grovel” comment in 1976 may well be the most effective motivational speech in the history of sport, albeit with an entirely perverse twist. The toxic cocktail of a metaphor redolent with racist innuendo and Greig’s own South African antecedents served to motivate Clive Lloyd’s swashbuckling Windies gladiators to great heights. The legendary Viv Richards plundered 829 runs, while sporting a tricolor Rastafarian wrist band. In his words “green for the land of Africa, gold for the wealth that was stripped away, red for the blood that was shed.” 

As dominant as Richards was, the coda to this infamous “blackwash” of the hapless English was delivered by a hitherto unknown young Jamaican fast bowler, who recorded the best bowling figures ever (14 wickets for 149 runs at the concluding Oval Test) by a West Indian. On a flat track, the graceful Michael Holding combined pinpoint accuracy with lightning pace to run through a shell shocked English batting line-up. Watching Holding bowl evoked Ali at his magical “float like a butterfly, sting like a bee” best, or Jordan’s equally irresistible glide to the hoop, earning Holding a place in the pantheon of all-time great athletes. And the moniker “Whispering Death”.

Fast forward to 2020, and Michael Holding whispered again, delivering his finest spell yet, only this time in the form of an incisive and moving discourse on racism to mark the start of the English summer, and a revival of cricket in the time of corona and #blacklivesmatter. 

To start with – call it a limb loosener for a first delivery – Michael makes the observation that technology has caught up with and exposed racism in America. This might seem somewhat trite, but is nevertheless worth noting in light of the vilification of social media platforms in terms of accountability for content. As Daily Show host Trevor Noah did in his powerful YouTube video, Holding focuses as much on Amy Cooper’s “weaponisation” of white privilege as he does on the gruesome George Floyd video – both captured and transmitted on ubiquitous smartphones and 4G networks, the former tweeted by the bird watcher Chris Cooper’s sister. 

Next, as an example of the existence of equally omnipresent subconscious racial bias, Holding cites a 2016 Yale study that highlights the implicit bias of American preschool teachers against black children, black boys in particular, leading to a vicious circle of detention, resentment, more detention, eventually incarceration. Had he been in the commentator’s box with Holding, the late Bob Willis – England’s main strike bowler in the 1976 series and a Dylan aficionado – would doubtless have invoked the maestro’s powerful ballad Hurricane from the 70s. If you’re black you might as well not show up on the street. ‘Less you want to draw the heat.

Holding observes that nobody is born a racist, it is learned and the brainwashing begins at an early age. “Nobody is taught anything good about black people,” he says. Jesus is white, with blond hair and blue eyes, while Judas is black. He further cites the example of Louis Howard Latimer, the unheralded inventor of the carbon filament which enabled Edison’s incandescent light bulb. Perhaps knowingly, Holding is channeling Mohammed Ali’s irresistible “Mama How Come is Everything White” tirade in his famous BBC interview with Michael Parkinson. 

Michael’s conclusion is the equivalent of a spitting cobra that rears up at your chin from barely short of a length. “Until we educate the entire human race, this thing will not stop. What people need to understand is that this stems from hundreds of years ago. The dehumanisation of the black race is where it started. No, you don’t get over things like that”. History is written by the conquerors, says Michael. And so are school curricula. I could not agree more. Enough already with the anodyne To Kill a Mockingbird, Toni Morrison’s Beloved should be required reading for American middle and high school students, for it depicts the institution of slavery for what it was – the ultimate degradation and yes, dehumanisation, of an entire race, a crime against humanity every bit as repulsive as the Holocaust. Read it, feel it, then let’s have an educated debate about bringing down Confederate monuments. And while we’re on the subject, let British kids learn about the condescending racism at the heart of colonial rule. Forget reparations, a universal acknowledgment of reality would go a long way toward healing. 

Holding’s words, delivered at The Rose Bowl in 2020, hit home with unerring accuracy, every bit as deadly as the lightning bolt that crashed through Tony Greig’s defences at The Oval in 1976, but with one important difference. At 6’6” and a bat held aloft at address, Tony fully expected a speedy yorker directed at his feet, yet was powerless to cope with it. We, on the other hand, barely aware of our own innate biases, didn’t see it coming, least of all from a man who embodies languid Caribbean cool and who, unlike Ali, has never raised his head above the parapet in terms of protest or activism. And how we cope with this projectile directed at our hearts and minds, the degree to which we internalise the underlying message – this is the challenge of the moment. 

One final note, in the name of objectivity and fair play that is so integral to the game of cricket. As Holding himself readily conceded, the late Tony Greig was not a racist, and by all accounts neither were other members of his English team. For one, you cannot change your middle name to Dylan, as Bob Willis did, and carry bigotry in your heart. Other members of the team, including the cerebral Mike Brearley, were quick to distance themselves from their captain’s comments. Tony himself deeply regretted his unprepared remark, to the extent of endearing himself to a West Indian crowd by grovelling – literally, down on his hands and knees – at the Oval. The great Ian Botham, who made his English Test debut shortly thereafter, should be feted as much for his principled stance in support of the sacking of his mate Viv Richards by Somerset county as he is for his exploits on the field. And finally, kudos to the English opening batsmen for taking the knee in solidarity with their West Indian opponents at the start of the Test in Southampton last week. 

Fittingly, on Sunday an inspired West Indian team pulled off an unlikely victory against a world champion English side, surely bringing a smile to Michael Holding’s craggy visage after the emotion he was man enough to bare earlier in the week. We hear you Mikey, and we’re with you all the way.

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The Great Digitization

The enlightened among you will be aware that Vladimir Ilyich Ulyanov did not write I Am The Walrus. Less enigmatic and decidedly more prophetic, what Lenin did say is the following: “There are decades when nothing happens, and there are weeks where decades happen.” Despite being somewhat clichéd, this Lenin one-liner really is the best way to think about the impact of placing the bulk of humanity in a cryogenically frozen state for a few weeks. Many of you will emerge with a sense of new sh*t having come to light, perhaps an epiphany that fundamentally alters your outlook. Like a recognition of how FOMO gets in the way of channelling your inner dude; in other words, doing absolutely f*cking nothing. In which case you could just continue to chill, or torture yourself with the following conundrum posed by Snoopy the dog: “My life has no purpose, no meaning, no direction, and still I’m happy. What am I doing right?”

At a decidedly more prosaic level, we will all experience a dramatic acceleration in the technology trends that have already subtly reshaped our lives for the last two decades. The markets get it. When the market value of the top 4 companies – all technology – in the S&P 500 exceeds that of the bottom 400, you know profound changes are under way in the global economy. “We’ve seen two years’ worth of digital transformation in two months”, said Microsoft CEO Satya Nadella in April, as it’s Azure cloud platform recorded 59% growth in Q1 2020. The divergence between digital and analogue, old world and new world, has never been as stark as it has through The Great Lockdown. Given our penchant for superlatives, and since a Great(er) Depression seems to be off the table, let’s call it The Great Digitization.

It is a truth universally acknowledged that we are all creatures of habit. Yet there is plenty of precedent for how behavioural changes following “shock treatment” tend to stick, the acid test for such stickiness being whether or not these changes made sense anyway. Take India’s controversial experiment with demonetisation in 2016, which led to an explosion in the use of electronic payments – a digital transformation that has substantially endured. Cash transactions in India now account for circa 70% of all payments, down from 95% at the time. In a closer parallel to COVID-19, consider the impact of the SARS outbreak in China in 2002-3, which led Alibaba to transform its B2B business model and launch the Taobao e-commerce platform. There was no looking back – e-commerce in China today accounts for 37% of all retail, compared to 11% in the United States.

Digital commerce is indeed the most obvious beneficiary of the shutdown. US e-commerce sales jumped 49% from March to April, and it wasn’t all Amazon, whose share actually declined from 51% to 40%. A robust e-commerce strategy has rapidly become the sine qua non for a successful retailer; thus Target is thriving while J.C. Penney has filed for bankruptcy. Facebook’s announcement of Facebook Shops added an impressive $30bn to its market value, its e-commerce engine powered by Shopify – whose own shares are up 86% YTD. The next phase – a combination of ubiquitous 5G networks along with relentless developments in virtual reality and AI will create the digital shopping experience of the future. Jeff Bezos and Anna Wintour might seem like an unlikely couple – until you experience progressive iterations of Amazon Fashion’s AI powered StyleSnap. The Pretty Woman remake will feature Vivian uploading a photograph, perhaps a screenshot of her favourite Instagram influencer, describe the occasion, indicate a budget and find the ultimate makeover delivered to her doorstep within the hour. Who needs a snooty salesgirl on Rodeo Drive, that’s so last century…

The digitisation of finance was already well under way, but this is yet another mega trend reinforced by COVID. Last week I paid my caddie using Apple Pay for the first time, and we both instinctively knew we had crossed the payment Rubicon: there would be no turning back. Interesting to watch will be the Japanese fascination with cash – always a puzzle in the context of an otherwise highly digitised society – and how it clashes with an equally compulsive fixation on hygiene. Regardless, physical bank branches seem increasingly anachronistic, and – as with retail – a digital strategy will become a key differentiator among the incumbents. April 2020 saw a 200% surge in new mobile banking registrations, while traffic increased by 85%. Surveys suggest only 40% of people expect to return to physical bank branches once the pandemic passes. The so-called challenger banks should logically be beneficiaries of this trend, but their ability to capitalise on these tailwinds will be a function of how they evolve their business models, as well as their funding and regulatory status. In the investment world, new wave online brokers report record trading volumes and client additions. Robinhood, despite major technical glitches in March, reported 3 million new funded accounts while raising money at a staggering $8.3bn valuation.

Virtual healthcare will also become an integral part of our new normal, yet another case of a mega trend turbo charged by COVID. China has led the way in this regard, with Ping An Good Doctor boasting an impressive 300mm users, including a 30% bump over the Lunar New Year period at the height of the pandemic. While the Chinese government has actively encouraged tele-health, approving coverage via public insurance last summer, it took COVID to get the US government to expand Medicare to cover telemedicine, and for State governments to mandate private insurers cover online doctor visits. Ever hear of Teladoc Heath? It is the US market leader, with 43mm subscribers, and its share price is up 2.1X for the year. Meanwhile competitor Amwell, which provides “a single comprehensive platform to support all telehealth needs” announced a $194mm fund raise in an attempt to keep pace with demand, it’s CEO reporting that the “past two months have accelerated telehealth by more than two years“. Venture funding for tele-health is already up 2.2x in Q1 2020 relative to Q1 2019. As an example, start-up Bright.MD’s SmartExam software platform “acts like a virtual physician’s assistant, automating 90% of a video visit, and reducing average visit time from 20 minutes to under 90 seconds.” Will anyone miss a depressing doctor’s waiting room, filling in forms while surrounded by sickly coughing patients? In fact, if telemedicine lives up to its promise of extending the reach of medical care, and leads to safer and more efficient digital delivery mechanisms for timely health care, we may yet have an entirely unexpected outcome – an overall decline in excess mortality in a digitised post-COVID world.

Next, let’s talk about the simultaneous digitisation of the workplace and of leisure, or the creation of the so called Stay-At-Home economy. The inimitable Jack Dorsey led the way, declaring that all Twitter employees could work from home “forever”. Zuckerberg announced that Facebook will embrace remote work, with the expectation that over time 50% of its workforce would work remotely. While one could debate the merits of personal interaction, particularly when it comes to leadership, new hire integration, creativity and teamwork, what is undeniable is the explosion in demand for bandwidth generally and enabling technologies like video conferencing applications. My own view is that as cool as Zoom (up 290% YTD) and Slack (up 61% YTD) might seem, there is very little Microsoft or Google could not replicate, and with security concerns paramount, enterprise CTOs will gravitate toward the perceived safety of big tech. Robotic Process Automation (RPA) – software that automates repetitive tasks – and robotics generally should logically experience a massive lift in a post COVID world, though I suspect the pressure to minimise disruptive job losses will mitigate this in the near term.

As for leisure, live sports was the sole raison d’être for linear TV. Not surprisingly therefore, 1.8mm pay-TV subscribers cancelled service in Q1 2020, up 70% from the same period last year. Meanwhile, Netflix added 15.8mm new customers, while Disney + added 5mm in April alone. COVID has turned cord-cutting from a slow trickle to a torrent. Even when the NFL, Premier League or the IPL get going, it’s simply a matter of picking your preferred streaming bundle to allow you to watch anything anywhere – soon with a VR overlay in a 5G world. In other entertainment trends, Twitch – the leading streaming platform for gamers – grew its audience by a third in April, and as for working out, a $99 annual subscription to Beachbody On Demand streamed to my iPad has permanently supplanted my $250 monthly Equinox membership.

And finally, if you want provocation, you might want to listen to NYU’s Scott Galloway discuss the future of higher education in the United States. According to Prof Galloway, schools charging $50K/year have value propositions that have been exposed and “rendered untenable overnight” by the pandemic. A US Ivy League education minus “the university experience” would be “like Sea World without killer whales”: the stamp is worth something, but “nobody pays $50K/year for Zoom classes”. Galloway sees a world with 50% online classes, as universities, devoid of the cash cow that is an international student body, embark on a radical restructuring with deployment of technology at its core, eventually resulting in a dramatic increase in enrolment, potentially even reverting college to the utopian vison of being a “public good”. Partnerships with big tech are likely a fundamental part of this digital restructuring, as higher education becomes one of the few alternatives available to Amazon and Google to generate scalable growth. Galloway unleashed – this is a guy who called the demise of WeWork and Amazon’s Whole Foods acquisition – always gets my attention. As Anderson Cooper says at the end of his interview with Scott (, “this is the most interesting 5-minutes I’ve had in a long time.”

Among the more ridiculous notions promoted through the lockdown is #AloneTogether, as if SARS-CoV-2 was a benign moonbeam promoting kumbaya on earth. Is David Geffen isolating on his $400mm superyatch “alone together” with a family of 8 confined to a tiny apartment in a Bronx project? Is an athletic 25-year old as vulnerable as an obese 55-year old? Is a debt laden casino operator in the same boat (not David’s, any boat) as Microsoft? The answer to all is of course a resounding “no f*cking way”. On the contrary, this virus is Darwinian in the extreme, and while the many cultural, societal and geopolitical implications will unfold over time, here’s the one thing we can say with relative certainty.

Your digital future has finally arrived.

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Strange Days

The Rolling Stones just released their first new song in almost a decade. Living in a Ghost Town is a catchy enough tune, but the lyrics are somewhat trite. “Life was so beautiful, then we all got locked down”? Come on Mick, you know you can do better. If you want a song about deserted streets, the deeply dystopian Ghost Town by The Specials does the job nicely. Although, ironically, when it comes to gloom The Stones are hard to beat. Paint it Black is – literally – the darkest song ever written, and among my all-time favourite tunes. Which says as much about me as it does about Jagger and Richards, but wtf, as they say in my homeland, after all we are like this only. In any case, Jagger falls woefully short of the Dylanesque epoch defining music these troubled times demand; for that we must wait.

Speaking of Dylan, the handwritten lyrics to The Times They Are A-Changin‘ went on the block this week for a $2.2 million minimum price tag, potentially setting a new record for rock lyrics.  Not surprisingly, a record hitherto held by the maestro’s own Like a Rolling Stone. While times they certainly are a-changing, I guess some things always endure. If there’s ever a complex thought or emotion that needs to be expressed, Bob’s your man. No surprise, therefore, as I started to sketch out my own soundtrack to The Great Lockdown, Dylan featured prominently. Yours will undoubtedly be different – give it a go, and if you don’t already have one, a lockdown reading list is an essential exercise as well. Mine started with Mark Manson’s The Subtle Art of Not Giving a Fu*k and ends with the resounding Everything is Fu*ked.

The compilation begins with a Rolling Stones classic, this one the real deal from the 60s. As I scrambled to catch what turned about to be the last commercial flight from San Francisco to London on March 15th – propitiously, the Ides of March – the ominous guitar riff and bleak lyrics of Gimme Shelter screeched inside my head. “If I don’t get some shelter…ooh yeah, I’m going to fade away”. The head pounding continued upon arrival at a disturbingly normal Heathrow airport  (wtf were these idiots thinking?) with Black Sabbath’s Paranoid taking over. In fact the Prince of Darkness stayed in my head for a while, and he still lingers. “All day long I think of things but nothing seems to satisfy”. Yes, I needed Shelter From The Storm, and Dylan’s infinitely more mellow Things Have Changed played in the background as the hunkering down began at home in a decidedly vernal London. “People are crazy and times are strange, I’m locked in tight, I’m out of range. I used to care, but things have changed.”

For the next week, I went through a phase of mind numbing morbidity. Perhaps this was true for the world at large, when you consider that March 23rd marked the low point of unbridled panic in the financial markets. I contemplated the calculus of my own mortality, captivated by the probabilities so callously suggested by the epidemiological models, while the apocalyptic A Hard Rain’s A-Gonna Fall, Van Morrison’s soulful take on It’s All Over Now, Baby Blue and Jim Morrison’s terrifying The End played in the background.

But the panic gradually receded, and what reigned instead was ELO’s Confusion (“you know its driving me wild”), or the more strident Land of Confusion from Genesis (“Oh superman where are you now, when everything’s gone wrong somehow?”). One slowly adjusted to a world that was not necessarily terminal, perhaps just different? No, unlike the plague the virus isn’t actually Blowin’ in the Wind, and yes I’m Still Standing, but it’s definitely a case of You Can’t Always Get What You Want. Another One Bites the Dust may sound eerily like Freddie Mercury reaching out from the grave, but for me Queen resonates every time I yank yet another bottle from my wine cellar. MC Hammer’s U Can’t Touch This serves as a constant reminder of a lurking danger, while Sting’s Don’t Stand So Close To Me has the potential to be the all time favourite T-shirt print. As central banks crank up the printing presses, the cash registers in Pink Floyd’s Money ring loud, while Spandau Ballet suggest now might be the time to buy Gold. But as far as profoundly therapeutic music goes, John Lee Hooker’s The Healer – featuring Carlos Santana on lead guitar – is unrivalled.  Yeah man, “blues a healer, all over the world…I was down, it healed me…it healed me, it can heal you…”.

Of late though, an increasing sense of detachment has set in, and Tears for Fears have emerged as unlikely poets. Yes indeed, “I find it hard to tell you, I find it kind of sad. When people run in circles , its a very very…mad world, mad world”. Kissinger once said the difficulty of leadership is that, by design, all the easy decisions have been made before they reach a President’s or Prime Minister’s desk. In a time when judgements made today will impact the lives and livelihood of billions, I find myself wondering who is the greater wack job – the dolt who suggests imbibing Clorox disinfectant as a lung cleanser, or the organiser of a cow urine drinking party? Pick your poison. Meanwhile, a roll of toilet paper costs a fortune but you can pay for it by buying a barrel of oil, Georgia has re-opened tattoo parlours, Missouri has sued China, and The Daily Mail reports that cruise ship bookings for 2021 are up 40 percent. Are people fu*king insane? If I was stranded on a desert island, down to my last bottle of rum, and a cruise ship offered to “rescue” me, I’d be scampering up the nearest palm tree. And pulling up the trunk after me. People Are Strange. In fact, they’re bat sh*t crazy.

At this point, it is a foregone conclusion this annoying malaise will be with us for at least another year. Decidedly no V-shaped recoveries, more likely a long tailed Nike swoosh, but hopefully not a deathly flat bottomed W. Many of you will seek solace in the inspirational saga of Captain Tom Moore and You’ll Never Walk Alone. The coda in my soundtrack, however, is the title track from one of my all time favourite albums, the surreal and psychedelic Strange Days by The Doors. It is a song that perhaps best captures the vibe of our times, an era where designer face masks are an essential fashion accessory – Alexander McQueen for me – but sadly it may be a case of all dressed up with nowhere to go. Faith in science, human ingenuity and Marley’s Positive Vibrations suggests there must be an easier way out, but meanwhile I suspect the words, delivered in the Lizard King’s rich baritone, will remain with us for many days to come:

Strange days have found us

Strange days have tracked us down

They’re going to destroy

Our casual joys

We shall go on playing

Or find a new town

Link to Spotify “Strange Days” Playlist :


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The Greatest Story Ever Told


You can never be too rich or too thin” is a quote attributed to Wallis Simpson, the enigmatic former Duchess of Windsor.

This marvellously cynical line may well have been the inspiration for the founders of The Lanserhof Group.  Two slick and minimalist rural retreats in the Bavarian Forest and Tyrolean Alps, respectively, serve up a daily fare of passage salts and spelt bread. Bread which you must masticate a minimum of 30 times, while  Nurse Ratched (remember One Flew Over the Cuckoo’s Nest?) diligently watches over you.

Other rustic European spa retreats have long peddled the much lauded “Mayr Cure”, fundamentally a Draconian regime of gut cleansing and tea fasting. Lanserhof, however, through a combination of sleek, minimalist design and clever marketing, has succeeded in cementing it’s place in the annual calendar of the global jet set, bang in there between St. Barts or Saint-Tropez and Aspen or Courchevel. After all, if you’re not toxed, wtf is the point of a tortuous detox? Forget the meek, blessed are the rich, for they shall inherit the earth.

Yet there is another dimension to the Lanserhof experience, albeit one easily replicated elsewhere on a shoestring budget, or indeed on no budget at all. It is the sheer novelty of being all dressed down with nowhere to go after being done with “dinner” at 6pm, and with it a rare opportunity for the type of reflective fireside reading one craves, but rarely finds the mind space to indulge in. Murakami for me is a gift that keeps on giving, and Killing Commendatore, an epic rambling narrative of a man in a surreal flight from his own emotions, did not disappoint. Walter Isaacson’s Leonardo da Vinci biography proved a fascinating read, while Alan Lightman’s Einstein’s Dreams and Richard Dawkins’ The Magic of Reality were both disappointingly lightweight. Men Without Women – also Murakami – turned out to be a wonderful collection of short stories showcasing the master in an altogether earthy mode. Intrigued at the potential connection, I also breezed through Hemingway’s identically named Men Without Women compilation, and found myself wondering at the connection between the bullfighters who populate Hemingway’s short stories, and the tortured middle aged men who inhabit Murakami’s world. I didn’t get it, but in my search for clues in cyberspace, I wandered down the rabbit hole of short stories from great writers better known for more celebrated works. Which brings me, in my usual meandering fashion, to the point of this blog.

James Joyce described Tolstoy’s How Much Land Does A Man Need? as “the greatest story that the literature of the world knows. There is a delicious double irony in this, the obvious one being Joyce’s implicit ranking of a pithy short story above the works of a man known for tomes not just monumental, but monumentally long. Equally ironic is my estimation of Joyce’s Ulysses as ranking right up there with Rushdie’s Midnight’s Children in the pantheon of great novels that are just plain f**king impossible to read. Joyce’s partner Nora, upon the publication of Ulysses, suggested he might consider “writing sensible books that people can understand. Bizarre, therefore, that Joyce would hold in such remarkable esteem a punchy allegorical story, eminently readable and entirely comprehensible, even for a not particularly precocious 10-year old.

Tolstoy’s story begins with two sisters in a predictable debate about the quality of their respective lives. The older boasts about the superiority of her sophisticated urban existence, while the younger, a peasant, sings the praises of a rural life without worries and temptation. Pakhom, the younger sister’s husband, finds himself agreeing with his partner, but lets slip that “my only grievance is I don’t have enough land. Unbeknownst to all, the Devil has been listening to every word, and decides to play a game with Pakhom.

Part of the story’s appeal is the remarkable parallel with the world of modern finance. Pakhom kicks off his career as a real estate investor negotiating a deal with a lady from the village who owns a 300 acre estate. He sells his foal and his bees, and combined with the family savings he is able to make a 50% down payment on 30 acres of land, with the balance to be paid over two years. At this point, Satan is smiling; Pakhom has now discovered the heady drug that is leverage. He borrows more to buy seeds, sows the newly bought land and within a year has a flourishing crop.

What follows next could well be a case study in corporate finance. There’s rivalry with competing landowners, multiple litigations, bankruptcies and distress sales, joint ventures, and of course, more levered acquisitions. As we near the climax of the story, our hero has accumulated 1300 acres of land, along with the all the trimmings of wealth: fine vodka, tea, a lavish homestead.

At this point, the ever acquisitive Pakhom meets a merchant, who tells him of a distant tribe of Bashkirs who own an abundance of fertile land, and are apparently a pushover when it comes to negotiating skills. Intrigued, Pakhom sets off, ready to cajole the Bashkirs into parting with their prime land. However, the Bashkir elder proposes an unusual deal: Pakhom can have as much land as he can circumnavigate in a day – sunrise to sunset – for a flat payment of 1,000 rubles. There is, however, a catch. Pakhom must return to his starting point by sundown, else he forfeits 100% of his deposit.

Seduced by this obviously Faustian pact, Pakhom sets out at sunrise, energetic and optimistic. The further he goes, the better the land gets, tempting Pakhom to venture beyond what he intended, unwilling to rest for fear of missing out. Sound familiar? When he eventually decides to make the turn home, Pakhom finds the going increasingly tough. Exhausted, dehydrated, and eventually terrified, Pakhom wills himself to carry on, even as he sees the sun receding in the distance. He fears ridicule even more than he does death. “If I stopped now, after coming all this way, they’d call me an idiot”, he tells himself.

If this was a movie, Pink Floyd’s iconic and appropriately dramatic Time would play in the background, with its ominous lyrics (“so you run and you run to catch up with the sun but its sinking”) providing the perfect coda. Pakhom makes it to the finish line, just as the sun disappears, but even as he does, his legs give way and he falls to the ground, dead.

The story ends with Tolstoy answering the question he poses in the title. “Pakhom’s worker picked up the spade, and dug a grave for his master – six feet from head to heel, which was exactly the right length – and buried him.”

Is this the greatest story ever told? Perhaps somewhat cliched, the cynical among you might say. The relative ranking or impact of any story, or indeed a piece of music or art, is of course an intensely personal matter. For me, redolent as it is with the world of finance and memories of those fallen by the wayside, the story resonates in a profound way. This little gem, this blinding flash of the obvious, was my reward for a week of meditative penance, much more so than a flat stomach or a lower heart rate.

And if you still don’t get it, “yeah, well, that’s just, like, your opinion, man…”







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Deus Ex Machina


“I’m not afraid to die, I just don’t want to be there when it happens.” Woody Allen.

Everyone takes the limits of his own vision for the limits of the world.” Arthur Schopenhauer.

Immortality is so hot right now.  Yuval Harari in his bestseller Home Deus pronounces that eternal life will be a primary goal for humanity in the 21st century. Peter Thiel is certain that death is a solvable problem, within reach of an emerging super intelligence. Ray Kurzweil believes intelligent wifi-connected nanobots (wtf?) in our bloodstream will routinely repair or replace worn down cells in our body, while machine versions of our organs will power on forever. No more broken hearts.

Back to the present, and close to home, a long bedside vigil alongside my dying father provoked an intense period of introspection. Solitude can indeed be blissful, but what flashed upon the inward eye in this instance was not Wordsworth’s daffodils, but rather profound questions of mortality. If this was a Bollywood film, this is when I jettison my atheistic disease and start to pray. I didn’t, for the same reason I’m not a Bollywood star: I ask too many questions. Besides, I can’t dance. Instead, I did what an inquiring mind might do in these situations. I read, in the quest of that which can never be fully understood or explained.

Atul Gawande’s Being Mortal deals with the mind bending complexity of managing the dying process, and coming to terms with the ultimate decision – when to switch the machines off, or indeed, whether to turn them on in the first place. As Gawande sensibly highlights, the medical profession needs to move beyond a Hippocratic obsession with prolonging life to reflect instead on a managed exit. I considered a living will, but what if I change my mind? Regardless, I resolved that Lacrimosa from Mozart’s Requiem Mass be played at my cremation, and my ashes, preferably not in a Folger’s can, be scattered in the sea alongside the 15th green at Kingsbarn’s. In case you’re wondering why, you may wish to watch Lebowski and visit St. Andrews. If you still don’t get it…well, that’s just like, your opinion, man…

Tolstoy’s monumental The Death of Ivan Ilyich came next, rivalling Anna Karenina and War and Peace, and much shorter besides. My father’s life was entirely antithetical to that of Ivan, I reasoned, and I had to believe what went through his mind in what were inevitably his final days was, unlike Ivan, anything but the terror of death, but rather the infinite peacefulness that might be the reward for a life well lived.

Gawande and Tolstoy are an unlikely pairing perhaps, but for anyone coming to terms with the physical and metaphysical aspects of dying, this combination might be hard to beat. Unless of course you happen to be in the Kurzweil camp, in which case your time might be better spent understanding “superintelligence” and its implications for humanity. Kurzweil’s The Singularity is Near may well be the most important book you don’t really need to read, for its essence can be captured in two simple, yet powerful, concepts. First, the extraordinary power of accelerating returns i.e. an increasing rate of change, and the implications for evolution in general and machine intelligence in particular. Second, as a corollary to the first, the inevitability that machine or artificial superintelligence will exceed human intelligence. Kurzweil postulates a time frame (2045) when this event – “singularity” – might happen.

Oxford philosopher Nick Bostrom’s Superintelligence: Paths, Dangers, Strategies takes Kurzweil’s work to the metaphoric next level, with a rigorous examination of the nature of super intelligence, and the opportunities and dangers it presents. Immortality may well be the ultimate opportunity: as physicist Richard Feynman observes, “it is one of the most remarkable things that in all of the biological sciences there is no clue as to the necessity of death.” 

The flip side of this delicate balance beam, and the ultimate danger posed by an unpredictable and uncontrollable superintelligence, is the diametric opposite of immortality. It is the final extinction of the human race. The formidable Elon Musk’s latest Neuralink venture anticipates something akin to Spock’s Vulcan mind meld with a computer; this “neural lace” keeps humans one step ahead of the evil artificial intelligence. Presumably as a hedge, Elon is also building an Interplanetary Transport System to help us colonise Mars in preparation for the impending machine invasion. If a million people sign up, the cost could be down to $200,000, a small price to pay for an escape from doomsday. In this brave new world, to book or not to book, that is the question.

Back down to earth, for all the exciting developments with convolutional neural networks, your most visible and frequent contacts with the world of AI are the sophomoric algorithms that suggest what you might wish to listen to next on Spotify, or what you might read next on your Kindle. Perhaps this is artificial stupidity at work, but I suspect we might be grossly underestimating how fast things are moving. This may in fact be part of a machine conspiracy to dumb down the human race. Take away the ability to expand the mind and experience the new, and we don’t need to wait for 2045: the machines have already won.

At this point, an embedded artificial intelligence algorithm might suggest that if you enjoyed this post, you might consider reading…well, whatever the f**k. Ignore it. Read Tolstoy instead. And while you’re at it, do something a cyborg will never do. Light up a spliff and listen to Shine On You Crazy Diamond. Because there’s more to life than being really really really intelligent. 

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Men In Tights


Joseph Nye, the former Dean of Harvard’s Kennedy School of Government, coined the term “soft power” in 1990 to describe a nation’s ability to “attract and co-opt rather than use force or give money as a means of persuasion”. In the lexicon of modern diplomacy, the expression more broadly suggests the process of influencing public perception through relatively subtle channels: digital media effectively turbo-charges this notion.

Take South Korea for example.  Gangnam Style, with its memorable “Hey Sexy Lady” chorus, went viral on YouTube with over 2 billion views to become the most watched video of all time. Drama Fever, a North American video streaming site whose content offering is primarily Korean drama, reports that over 80% of its viewership is non-Asian. For a nation that is almost entirely reliant on US support as its primary deterrent against the tubby nuclear buffoon across the border, K-Pop and K-Drama have likely accomplished more than any government sponsored lobbying effort ever could. As an aside, I personally think the fact that Korean golfers occupy an unreal 22 spots in the LPGA Top 50 rankings – compared to 12 for the Americans – is way cooler than anything served up by the pudgy Psy. Either way, the venerable Professor Nye would approve: this stuff matters. Not only does it do wonders for the self-esteem of 50mm Koreans, it also makes Seoul a safer place.

Indian soft power over the years has a somewhat mixed track record. The world perceives us as analytical and spiritual, but absent the very shapely Priyanka imprinting a Punjabi Style video on the collective consciousness of the millennial generations, our cool quotient is decidedly low. To most Westerners, we are, quite bluntly, a nation of geeks, a stereotype reinforced by Nadella and Pichai at the apex of Microsoft and Google, or the brilliant Manjul Bhargava as the latest recipient of the Fields Medal. We also seem to populate and dominate the uber-geeky and tainted world of finance, and New York cab drivers tragically drag us down even further: its bad enough being geeks, but smelly geeks? As for Bollywood, I know its big in the Middle East and Africa, but when Shashi Tharoor proudly announces on TED that middle-aged Senegalese women ride buses to watch weekly screenings of Hindi movies dubbed in French, I find myself asking “wtf dude, so who cares”?

To be fair, nobody has yet asked me to fix their computer (except my daughter), and perhaps I am, as always, over cynical. With the formidable NaMo in charge, India is back in fashion…well, among investors anyway. But for all the news flow emanating from India, the one that decidedly falls within the category of “wtf, I didn’t see that coming” is the phenomenal success of the Indian Pro-Kabaddi league.

For the uninitiated, kabaddi is an ancient Indian contact sport that combines a high-octane mix of tag, wrestling, and chanting. According to The Wall Street Journal, kabaddi demands “the strength of a linebacker and the lung capacity of a tuba player”. Two teams of seven players face each other in a circle and take turns sending a “raider” into the other team’s terriotory. To win a point, the raider must take a deep breath, run into the opposing half, tag one member of the opposite team, then return to his home, holding his breath and chanting “kabaddi” all the while. The raider will have precisely 30 seconds to touch and eliminate an opponent(s) and come back to his home turf. Each game is 45-minutes, with 20-minute halves and a five-minute half-time break during which the teams change sides. No equipment is involved, which perhaps adds to the games earthy appeal. As for what “kabaddi” actually means, nobody seems to know, although a fan offered The Guardian a cheerful and typically convoluted Indian explanation. “The kabaddi is called the kabaddi because of the saying kabaddi.” Of course.

The first I heard of the existence of a professional kabaddi league was in a casual conversation at a cocktail party in Delhi with a lady who happened to be co-owner of an international kabaddi team with the unlikely name of Yo-Yo Tigers, named after her equally absurdly named partner, Punjabi rapper Yo-Yo Honey Singh. Intrigued, I investigated further. Turns out a staggering 22 million people watched the inaugural match on July 26, with Twitter and Facebook recording an equally mind blowing 140mm tags within 12 hours of the game! For perspective, 2.2mm Indians watched the first 2014 World Cup soccer match, and the global viewership for the deciding game of the NBA finals was 18mm. The World Kabaddi League followed, kicking off at London’s O2 Arena with a total of 144 players from various countries participating across 15 international venues, broadcast live on its own YouTube channel to a global digital audience. Total viewership for the matches was estimated at an incredible 400mm. (Appropriately, the league featured a Korean player. Hong Dongbu from Busan is a Delhi defender who played kabaddi in college and apparently relocated to India in defiance of his family to play professionally. Go figure.) Last night, the United Singhs beat the formidable sounding Khalsa Warriors in the finals, while the California Eagles captured third place beating the Vancouver Lions. Within 4-months pro-kabaddi had achieved the remarkable feat of becoming India’s #2 professional sport, ahead of hockey, badminton or soccer. With the endorsement of the local business, Bollywood and sporting elite, the kabaddi league hopes to rival the Indian Cricket League in terms of media and financial metrics within a 5-year time frame. Heady stuff indeed.

Celebs At Pro Kabaddi Match

Which of course begs the question: does kabaddi have the potential to make it on the global stage and provide some much needed oomph to Indian soft power? Could it capture the hearts and minds of people in the fashion of Bruce Lee’s kung-fu fighting? Many of the ingredients are in place –  the game itself is fast-paced, and demands strength and agility, with the type of vigorous physical contact that is de rigeur in the modern sporting arena. A robust following in India and among the diaspora provide the essential financial support for a sustained global push. And unlike cricket – despite the protestations of most Indian fans who believe that cricket is an Indian game accidentally discovered by the British – kabaddi is quintessentially and undeniably grass-roots Indian. So I suppose one would have to concede the possibility.

But I’m not holding my breath…

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The Ten Year Itch

MarilynSeptember 15, 2014 marks the 60th anniversary of the filming of one of the most iconic images in cinematic history  – a delightfully uninhibited Marilyn laughing as the updraft from a Manhattan subway vent billows her skirt skyward. Such is the allure of this glamorous scene – from the classic The Seven Year Itch – that Marilyn’s white dress fetched a record $4.6mm in auction. For perspective, this is almost 5x what was paid for Audrey Hepburn’s memorable little black dress from Breakfast at Tiffany’s.

This piece of Hollywood history may well be the least obvious place to look for clues to the gyrations of the Indian stock market. But the answer lies in the title itself, or a temporal variation thereof. I call it The Ten Year Itch. Alternatively, paraphrasing Mark Twain paraphrasing Voltaire, history never repeats itself, but it rhymes every decade. Add to that yet another (paraphrased) cliché – there’s a sucker born every ten years. If you still don’t get it, here’s my point. India is and always has been a net importer of capital with a relatively fragile balance of payments and a notoriously illiquid stock market. Roughly every ten years an entirely new crowd of fund managers in Manhattan wakes up to the screamingly obvious D’s of Delhi – democracy, demographics and demand. (There’s dirt too, literally and metaphorically, but for that read Rana Dasgupta’s excellent Capital). Invariably fueled by the likes of Helicopter Ben, and lately his Japanese and European kin, testosterone levels rise, animal spirits revive, and risk capital finds its way into India, seduced by its impossibly articulate entrepreneurial snake charmers. Wtf, unlike the Chinese, they even speak English, how cool is that? And while a few billion dollars of buying/selling barely nudges AAPL or GOOG, in India it creates a loud blowing (or alternatively, sucking) sound.

To be clear, there is usually some method in the madness of crowds, even in the seemingly irrational financial markets. There is invariably a catalyst that directs risk appetite toward India in these liquidity driven market runs. In the early 90s, the story was Rao’s reforms, ostensibly engineered by his erudite Cambridge educated Finance Minister, but in reality mandated at gunpoint by a multilateral bailout. Predictably, once the IMF relaxed its trigger finger, normal service was resumed with the economy gravitating toward its meandering path. In the millennium, the excitement was around Thomas Friedman’s The World is Flat narrative. Paraphrasing again, this time JFK, ich bin eine outsourcer. Never mind that no country has ever skipped the essential step of a vibrant employment-creating manufacturing sector as a forerunner to a services-oriented economy. Aided by the largesse of US monetary policy following the tech bubble bursting, Indian markets took off and partied like it was 1999. And now ten years on, with Signor Draghi and Kuroda-San eagerly accepting the baton the very dovish Ms. Yellen appears ready to pass on, the tsunami of money hits India again, the story this time being great expectations around the intrepid messiah Modi.

But as the markets are swept away by the euphoria surrounding a new regime, lets pause and reflect on the nature of this rally. Clearly, global risk appetite has much to do with it, as does mean reversion given the annus horribilis that was 2013. It seems fashionable to run down the vanquished old-guard, but much credit is due to our avatar Raghu Rajan and the erstwhile finance minister Chidambaran for acting decisively and in a co-ordinated fashion to engineer an improved capital account and fiscal deficit picture, which was an essential pre-requite to this rally. As for the election itself, here’s the thing – markets invariably rally following major leadership changes, not just in India but (for example) recently in Mexico, China and Japan. Empirically, these rallies tend to be ephemeral, and moreover the historical data does not support the view that political stability alone correlates to economic growth or market performance. Yet there is no shortage of analyses justifying and projecting ever higher targets for the Indian markets – macro regressions, valuation comparison, fund flow data suggesting increased domestic participation. The harsh reality is without truly meaningful action – of which there has been very little thus far – to address the well known structural bottlenecks that have traditionally held India back, this rally seems destined to follow the pattern of decennial foreign liquidity driven phenomena. In other words, this is likely not a “new era” secular bull market. After the initial “pop”, we’re currently in a consolidation phase, following which – event risk notwithstanding – we’re likely to see a final “blow-out”. Not unlike Marilyn’s dress.

My bottom line? As the legendary David Swensen (who manages Yale’s $20bn endowment) once told me, markets like India tend to be momentum trades, and market timing more than stock selection is key to outperformance. We’re in that sweet spot now, and 9,000 for the Nifty and 30,000 for the Sensex – event risk notwithstanding – seem eminently reasonable medium term targets. So think of Marilyn’s seductive smile and know that the sex is back in the hitherto limp Sensex. Enjoy the experience, just remember to pull out in time.

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Student of the Year


“Better to remain silent and be thought a fool than to speak out and remove all doubt.” Abraham Lincoln.

Almost 30% of Indian Members of Parliament have criminal records. Many have been in jail, some are out on bail and most are doomed to fail. But only a select few go to Yale. Every year, as part of its India Initiative, Yale invites a small group of Indian MPs to its campus for a one-week Parliamentary Leadership Seminar.  For its next such outing, the organisers would be well advised to start proceedings with the above lesson from Lincoln, as underscored by the outrageously moronic utterances from the program’s most recent “graduate”, Indian Human Resources Minister Smriti Irani.

By all accounts, Ms. Irani seemed like a terrific role model for the millennial Indian woman. From flipping burgers at McDonalds to stardom as a model/actress is vintage Bollywood fare in and of itself. Not content, the ambitious Ms. Irani moved seamlessly into the manly world of politics, breaking through the metaphoric glass ceiling to find her way into India’s Cabinet. As a politician, she is anything but a wallflower: not afraid to take a stand, she threatened to “fast unto death” in protest against Narendra Modi following the Gujarat riots. Meanwhile, she found the time to raise a family as a mother of three in an exemplary cross-religous marriage to a divorced Zoroastrian. All great stuff, and in fact inspirational in many aspects.

Where the redoubtable Ms. Irani completely loses the plot is her evident insecurity about her education, or lack thereof, which of course is supremely ironic for someone who now finds herself responsible for India’s erstwhile Education Ministry. Her papers submitted to the Election Commission in 2004 document that Ms. Irani holds a B.A. degree from Delhi University’s “School of Correspondence”. A cursory glance at the school’s website suggests that aspiring students need only “write their Name and Course applied for on back side of Demand Draft”. Wtf, not exactly a high bar, but fair enough for someone whose aspirations might lie beyond the purely academic. However, eyebrows begin to rise when her filing in 2014 suggests she completed only Part I of a B.Com degree, and the plot thickens when the University’s own records reveal no evidence of any credentials whatsoever. The predictably pathetic response – “ask Sonia Gandhi for her credentials” – completely misses the point, but then the shit really hits the fan. At this point, it likely occurrs to Ms. Irani that if one wishes to prevaricate about one’s schooling, why tout a correspondence course from lowly local Delhi University? Why not an elite phoren degree from Oxford and Cambridge, or Harvard and Yale? Wtf, even Sonia Gandhi gets that!

Following the grand tradition of the Bushes and the Clintons, Italian PM Monti and Mexican President Zedillo, Ms. Irani now proudly announces that she is a Yale graduate. Displaying truly remarkable chutzpah, in a performance befitting Oscar-winning Yalies Meryl Streep and Jodie Foster, Ms. Irani proclaims on national television that “I have a degree from Yale which I can bring out and show how Yale celebrated my leadership”. This of course on the strength of a sightseeing trip to unsightly New Haven for a photo opportunity with Yale President Rick Levin. A true “WTF” moment, even by the standards of India’s degenerate political classes, prompting a torrent of mirth in the Twittershpere. Novelist Shobhaa De wondered if having a Yale lock on her front door qualified her for a Yale degree, but my personal favourite was journalist Madhu Kishwar who described the bosomy Ms. Irani’s New Haven sojourn as a “titsy-bitsy” 6-day course.


All of which would be delightfully amusing were it nor for the sad fact that with this BJP government, we convinced ourselves that this time was different. Seriously. To have a Cabinet minister who makes Sarah Palin sound like Winston Churchill by comparison is a national embarrassment. It’s déjà vu all over again. Plus ça change, plus c’est la même chose. The allegorical ship of fools continues to sail. This is yet another Indian tale that makes me want to wail.

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