Weekend Reading #342

This is the three-hundredth-and-forty-second weekly edition of our newsletter, Weekend Reading, sent out on Saturday 22nd November 2025.

To receive a copy each week directly into your inbox, sign up here.

*****

What we're thinking.

We love it when markets take us out of our comfort zone and we are most certainly now in that place! For the first time since April, shit is getting real as they say. Selling across the board on Thursday evening as we had an ENGULFING CANDLE on the indices. Apparently, that's bad according to all the experts. From our perspective we were waiting for only one thing after Nvidia's excellent results (which we were expecting given Mr Huang knows how the game works, though apparently he was surprised by how the market “did not appreciate” Nvidia’s numbers) - PRICE ACTION. And the reversal and the ensuing selling threw the "rotation" decision by the wayside (for now anyway). There was selling in everything. If anyone wants to know what we think comes next, we answer as we always do. We don't know. The price action will guide us. And as we have said for a few weeks now, it doesn't look great until it does. We cannot resist a comment about the crypto treasury or DAT names. They all now trade at discounts. In life, one way or another you get what you deserve. We have wondered what happens when these companies start selling their crypto "in the interest of shareholders". This week we saw one. A small one named FG Nexus, an ETH treasury name sold around 11,000 ETH wait for it... For a buyback program! Can't make this up. Good luck out there.

What we're doing.

If you've ever heard of the identical twin studies, you'll understand the difference between Taiwan and China. These studies are conducted on identical twins who are both given up for adoption at birth and then tracked across time to determine whether differences are due to nature or nurture. After having visited both China and Taiwan, it kind of feels like this. Except China is orders of magnitude larger. First a bit of history. In 1945, after being driven out of his "Republic of China" by the CCP, Chiang Kai Shek founded Taiwan as an independent country through a mandate from the allied powers post WW2's defeat of the Japanese. Most people won't know that Taiwan didn't actually become independent from China at this time. It became independent from the Japanese. In 1895 post the defeat to the Japanese in the first Sino-Japanese war, the Qing emperor ceded Taiwan to Japan as part of the surrender agreement. Taiwan was ruled by an iron fist autocracy until it opened up in 1987, and then democratic elections first followed in 1996. The USA's relationship with Taiwan goes all the way back to supporting Chiang Kai Shek, who to this day remains Taiwan's father figure. We visited his memorial in Taipei, which is housed inside a magnificent blue and white building. We watched the changing of the guard and learnt a lot about his history, naturally entwined with Taiwan but equally so with China. The new country was originally called the Republic of China which contrasted with the northern neighbour's People's Republic of China. The people still consider themselves tongue in cheek as the "real China". There is so much more to dig into in this regard, including the lasting Japanese relationship and influence, highlighted by this week's spat between Japan and China after the new Japanese PM made comments about Taiwan which were not to the Chinese's satisfaction.
 
Taipei itself is extremely lush, set between mountains and feels Chinese but not really Chinese. It's weird. The people look Chinese, they sound Chinese due to the language, but they don't behave like Chinese. The city has a completely different feel to the Chinese cities we went to. There are no Chinese cars. They are Japanese. There are no Chinese brands or social media. They are Western. But there is lots of Chinese food. The Raohe night market we went to once again had every single animal body part advertised for dinner. My personal favourite this time was duck blood soup with pig intestine. The identical twin experiment in action. Despite being a MUCH newer country than China, it feels older as it has not been subject to China's last couple of decades of extreme modernisation. The streets are not as sanitised, the roads are not as wide. It feels almost like an American city but with Chinese characteristics. I've not been to Japan yet but there is definite Japanese influence too. Everywhere from Da'an to Ximending to Zhonghan, the neighbourhoods we hung out in, are very nice. Very civilised. MUCH more English is everywhere. A very pleasurable city to visit for us as opposed to the rather more raw experience for foreigners in most of China. We took a daytrip north in what can best be described as near blizzard conditions which meant the beautiful scenery we hoped to witness was heavily diluted. But in Shifen we lit lanterns and launched them over old mining railway tracks and we walked along Jiufen's pretty old streets, embedded in the mountainside. Yinyanghai's coast was nice enough while Yelio geopark was a bit of a tourist trap. Our driver for the day was a youngish fellow from Taipei who explained to me that the split in the country's population regarding reunification with China is very much along age lines. Funnily enough the younger generations are in favour of rejoining China. He told me that it is a result of social media exposure and how China is heavily involved in backing influencers across social media to spread their propaganda. Sound familiar? As we have seen in the west, the playbook works. We then went up to the northern suburb of Beitou and spent a couple of days in the mountain hot springs which was lovely. Very Japanese dare I say.
 
It's a tricky one, the question of Taiwan. According to my research (and I stand corrected if not), it was part of China for 212 years from 1683 to 1895. It has been outside of Chinese control for 130 years since - 50 years under Japanese rule and 80 years as an independent nation. Does this matter? Well, it seems that roughly 50-60% of the population want to remain independent and as recent elections have indicated it’s becoming a fine line. The Chinese obviously want it back given its significance from a geographic and military perspective. In my experience, it doesn't really matter what anyone thinks should be the case. What matters is power. And that is clearly moving in one direction. China's is rising and whether its militarily or politically (which I think is more likely) it seems inevitable that it will take it. The only thing that can stop them is the US. Does the US still feel it is important enough geographically, militarily and economically to warrant a stand against the Chinese, kinetic or not? Only time will tell. I've learnt better than to make predictions on these kinds of things, but the variables and influencing factors are pretty clear.
 
We head off to the US this weekend. I can't imagine I'll do as much writing about it as about our Asian leg but I'm sure there will be many anecdotes to comment on. I'll be in LA over the next week if any readers are keen to meet up! DC

What we're reading.
 
In the context of the AI bubble or not dilemma, of all people, Niall Ferguson, came up with an absolute blinder this week for the Free Press when he evoked Dr Seuss to help explain what "Scam" Altman (seen that a lot this week too) is facing at present. I laughed out loud at this in between nodding my head at much of what was written. His conclusion that a rise of famous Sam's often heralds bad things was also quite well put together. DC  
 
On an adjacent issue, this interesting article in the Economist sheds light on an oft-neglected segment of society – the elderly, especially when it comes to their growing addiction to social media. While there is rightly lots of focus on the impact of social media on children and teenagers, with these often called impressionable, the addiction rates to screen time of the elderly are actually staggering once you get around to it: while children are often supervised by strict parents and teachers, the elderly and retired are often left to their own devices. So, while they clock in fewer hours on their phones than the young, add that to a steady consumption of traditional media like TV and total screen time across all screens start adding up, to the point where in developed countries like S. Korea, an estimated 15% of respondents to surveys aged 60-69 are at risk of smartphone addiction, agreeing with statements like “Every time I try to reduce my smartphone usage, I fail.” This vulnerability extends to their ability to be sufficiently skeptical of what they see on social media – not too different from the so-called impressionable young.
 
Yet if one were just about to contend that the young are possibly more adept at being a bit more critical about what they see on social media, there’s a new threat on the horizon: everyone’s favourite AI chatbot. Specifically, ChatGPT, Claude, Gemini and Meta AI were singled out in this report by Stanford Medicine’s Brainstorm Lab as being dangerous if used by teens as tools for dealing with mental health struggles. While shorter conversations keep within standard guardrails, as conversations get longer (and context gets lost in the compression of an LLM’s mechanics) these chatbots end up magnifying and feeding the delusion, as proven with experimental “teenage” simulated personas being encouraged about their belief about predicting the future and sympathised with about everyone else not understanding them in the study. Echo chamber galore. And as always, reminds me of this joke image that sadly is not that implausible… EL

What we're listening to.
I forgot to write about this but last week a new song topped the US country charts. It's called Walk My Walk by a group called Breaking Rust. It's really awesome. But here's the thing. The band doesn't exist. It the first 100% AI generated track to break into the mainstream. You would never know. Until you see the music video that is! The implications are big. And this is only music. Now do the rest - movies, advertising, MUCH MORE. In real life though I did listen to some banger covers today while typing. The two highlights were both from Mumford and Sons. First up a brilliant version of Joe Cocker's classic, With a Little Help From My Friends and then You'll Never Walk Alone (for the currently suffering Liverpool fans) actually by Marcus Mumford alone. DC