What you should be reading: #6 January 2022

1. The Quest for Monopoly

“Stock exchanges are fascinating businesses. They are the ultimate network business, pioneers in the category. Before there were social networks, before even payments networks, there were stock exchanges. The special case of the New York Stock Exchange is especially fascinating. It’s a great story of fragmentation to monopoly to fragmentation to monopoly.”



2. The Many Worlds of Enough

You might have set some goals of saving X amount for Y thing. But whenever that finish line draws closer we’re ever so uncertain whether that X is enough and want to push that line ever so further.

The question of enough is one that appears to have no answer. People have tried to quantify it using intricate formulas, but you can’t apply mathematics to what is really a matter of philosophy.”

How do we resolve the tension that emerges when we set future goals based on present-day wants? How do we manage the fact that when we reach enough, we’re no longer the person that once desired it? Is it inevitable that enough will always shift, or can we transcend this?

This post is a fascinating deep dive into the elusiveness of enough. Not through the lens of numbers, but the lens of personal identity.



3. Silver Thursday: How the Hunt Brothers cornered the World’s Silver Market and then lost it all

Back in 1980, Hunt brothers Bunker and Herbert and other members of the Hunt clan owned roughly two-thirds of all the privately held silver on earth. But the historic stockpiling of bullion hadn’t been a ploy to manipulate the market. Instead, it was a strategy to hedge against the voracious inflation of the 1970s as they and their legal team would insist in the following years.

Whatever the motive, it was a bet that went historically sour. The debt-fueled boom and bust of the global silver market not only decimated the Hunt fortune, but threatened to take down the U.S. financial system.

  • The panic of “Silver Thursday” took place over 35 years ago, but it still raises questions about the nature of financial manipulation.

  • From a spot price of around $6 per ounce in early 1979, the price of silver shot up to $50.42 in January of 1980. In the same week, silver futures contracts were trading at $46.80. Film companies like Kodak saw costs go through the roof, while the British film producer, Ilford, was forced to lay off workers.

  • After the oil bust of the early 1980s and a series of lawsuits polished off the remainder of the Hunt brothers’ once historic fortune, the two declared bankruptcy in 1988. Bunker, who had been worth an estimated $16 billion in the 1960s, emerged with only under $10 million to his name.



4. Inside Bill Ackman’s ‘Greatest Trade of all Time’

Hedge fund manager Bill Ackman is both celebrated and derided for his confidence and tenacity when it comes to making big bets on a handful of positions. His all-or-nothing approach has led to some of the greatest, most prescient calls in the investing world – and some of the biggest busts.

This $27-million bet he placed at the start of COVID-19, earned him a whopping $2.6 billion and was hailed in an op-ed in the New York Times as perhaps “the single best trade of all time.”



5. The Long vs The Short Game

  • Why you need to be focusing on the long road to success: In a game of overhyped valuations and extreme overnight hero-branding, it is essential to incline the focus on what business can be built for the long term, for the everlasting.

  • The importance of consistency and continuum: When you choose between what’s right and what’s convenient, it eases your effort in building a business for the long term. Doing what’s right is the continuous correct decision that has to be made at every dicey challenge. Constantly being aware of the bigger picture is crucial.

  • The downside of the short game and how it becomes obsessive: You will have to continuously look for new games after the previous, new players after the old, and so on. This drains your long-term decision-making ability along with productivity.



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Good articles these. The “Many enoughs” articles was thoughtful. It has parallels in many ideas even trading. I think finding ‘Enough’ is at least as difficult as finding stop loss or booking profit on a rising or falling chart. Do it too soon or do it too late and there is remorse either way. It makes sense then why people avoid making this decision for as long as they can. Consequently also why people who found themselves on the right side of their trades, would form a bias that theirs was the correct “enough”.

As for Bill Ackman’s trade, calling it the GOAT trade would not be fair in my opinion. John Paulson’s Bet against the mortgage industry and Soros’s breaking of the Pound Sterling were better trades. Its just more recent so attracts more eyes.