The Next Renaissance, The Secrets of Hillhouse, Playing The Great Game, What is DeFi and Insights from Sohn

May 13, 2021

“In their calmer moments, investors recognise their inability to know what the future holds. In moments of extreme panic or enthusiasm, however, they become remarkably bold in their predictions: they act as though uncertainty has vanished and the outcome is beyond doubt. Reality is abruptly transformed into that hypothetical future where the outcome is known. These are rare occasions, but they are unforgettable: major tops and bottoms in markets are defined by this switch from doubt to certainty.”

- Peter Bernstein

“Sit down before fact as a little child, be prepared to give up every preconceived notion, follow humbly wherever and to whatever abysses nature leads, or you shall learn nothing. I have only begun to learn content and peace of mind since I have resolved at all risks to do this.”

- Thomas Huxley

“It’s not what you look at that matters, it’s what you see.”

- Henry David Thoreau

A. A Few Things Worth Checking Out

1.  In markets, it is often said that while history doesn’t repeat itself, it often rhymes. In this great Bankless podcast featuring historian turned investor (at 6ixth Event) Josh Rosenthal covers exactly that – looking at the possibility that we may be living through revolutionary times, with the printing press and double-entry bookkeeping – arguably the two most important innovations that drove expression and financial growth in the Renaissance – seeing their modern counterparts in the Internet and Blockchains respectively.

This was mind opening and perspective changing and really brought historical context to what the combination of what peer-to-peer information sharing (the internet) and peer-to-peer value transfer (blockchains / cryptocurrencies) could mean for society.

2. Zhang-Lei is the founder and Chairman of Hillhouse Capital, one of the best asset managers in China. He wrote a book last year (in Mandarin) on his journey, entrepreneurship and investing. Here’s a great tweet storm of the big ideas:

3. Adam Robinson is one of my favourite people. I always learn a lot from him and he shared his approach to markets, which I summarised in this tweet storm.

4. Packy McCormick writes the Not Boring letter - and his latest this week on why & how to play and win the Great Online Game was an awesome read.

5. How to have a high returning VC fund by Frank Rotman of QED Investors. Thank you Yaser.

6. What is DeFi in 3 mins.

7. Great presentation on NFT’s.

8. Finished these two great books on the history and intellectual underpinnings of Bitcoin and crypto currencies. Both highly recommended. Thank you Yaser and Meltem for the recommendations.

9. Ming Zhao is my new favourite follow on Twitter, here are some goodies:

B. A Few Things I Learnt At The Sohn Conference

The Sohn conference happened yesterday.

The two stand out sessions were John Collison of Stripe chatting with Dan Sundheim of D1 Capital.

and Bill Gurley talking to Brad Gerstner.

More at their twitter handle.

Ram Parameswaran, Octahedron Capital presented on Peloton, saying the company is an asymmetric bet that could return 4x over 5 years. “fitness is undergoing a once-in-a-generation structural shift from offline to online” - Peloton is getting increasingly affordable, each new version is cheaper than the predecessor, so younger people are using it now - “Peloton has the chance to build a Netflix-like business for free” - He’s expecting subscribers to rise 8x between now and 2025. Peloton’s stock should be worth more than $300 a share. 

David Einhorn, Greenlight Capital discussed the gold rush coming in electric vehicles and is talking about the need for copper – “You don’t have to be a genius to know that if you’re building EV, storage, wind and to grow the electric grid, you need lots of copper. You need copper for wind and solar installation, for charging stations” – Quotes Goldman’s research note titled “Copper is the new oil” – The pipeline of potential new copper capacity is low, its takes a long time to create new mines. Supply is expected to fall below demand in 2024, and will lead to higher copper prices - Freeport McMoran is a pure play on the copper price, and for $3 copper, the shares of Teck are worth about C$40.

Thank you Aron.

Disclaimer: This is NOT RESEARCH (certainly not “substantive”) or any kind of INVESTMENT RECOMMENDATION. Just my personal weekly views for fellow financial professionals.