Holiday Book Recommendations and Other Adjacent Stuff - 12/6/22
A selection of books I like, that you might like too.
Upcoming Episode
Evan Tindell will be the guest for the next episode. Parts of Evan’s interview made it into the “Rocket Man” episode, but the next show will feature Evan exclusively. Evan is the co-founder and CIO for Bireme Capital, and is also a former poker player. Bireme is value oriented and emphasizes finding stocks that have been beaten up due to ingrained human biases. Bireme puts out quarterly letters which give some clue as to how they view the market, and they also write blog posts on individual stocks. I enjoyed their recent writeup of META.
The episode will probably come out by about 12/16 or so.
Book Recommendations
I’m always looking for good books, so I thought it might be nice to offer some recommendations for the holiday season. Gift them to someone else, or gift them to yourself.
If you have any book recommendations you can put them in the comments (you’ll need to install the Substack app to comment).
The Gambler - William C. Rempel
The Taking of Getty Oil - Steve Coll
The Ultimate Edge - Mark Billings
Then One Day - Chris Andrews
Fortune’s Formula - William Poundstone
Gambling Wizards - Richard Munchkin
The Caesars Palace Coup - Frumes and Indap
The Hard Thing About Hard Things - Ben Horowitz
Liar’s Poker - Michael Lewis
A Man for All Markets - Ed Thorp
I'm shocked, shocked, to find that gambling is going on in here.
The classic line from Casablanca is so great that it gets used in all kinds of situations where it’s not exactly on point. Broadly, people just use it now when something is obvious and not shocking.
But the brilliance of the line is that Renault is the enabler of the gambling - and he’s not too embarrassed by his complicity to act against Rick!
It’s like, however low your expectations might be for a corrupt public figure, you should probably lower them even further.
There’s an idea going around the interwebs that Sam Bankman-Fried has paid off all the right people, and will never be held to account for the collapse of FTX.
We don’t know all of the evidence yet, but what we do know looks horrible for SBF. And the political steamroller is just starting to move.
I kind of suspect that the Casablanca scene will end up being informative for what SBF will experience.
The legendary shortseller Jim Chanos also points out that being juiced in politically didn’t save the Enron executives.
Tough Day at the Track
I saw an interesting tweet thread from Coinledger where they were offering to buy any NFT (for a very small amount) so that the NFT’s prior owner can claim a tax loss.
I think the takeaway here is: people like to gamble. Sometimes that means they will buy NFTs that lose 100% of their value.
It might seem like the market has fallen a lot, but I still see cartoon jpgs (that I wouldn’t trade a tube of chapstick for) selling for hundreds of dollars. Also, I’m not talking about some of the well-known projects that are at least original and unique. I’m talking about derivative junk.
This actually reminds me of something that I have encountered in California real estate, which is that if you go to some really far flung places like California City, you can find land that has been subdivided expressly for the purpose of selling to unsophisticated speculators (i.e. gamblers). In 20 acres of land you might find 50 separate owners. There are no roads or utilities, and there likely never will be. These are also not properties that “show well” - they are reminiscent of the “What’s in the box?” scene.
The original subdivider of these lots never had any intention of developing a project. The only goal was to break it up and sell to suckers, with slogans like “Own a piece of California!”
In the case of NFTs and in the case of real estate, there are actual assets that can hold value over time, and even appreciate. And then there will also be massive amounts of garbage, only suitable for speculation, which likely costs more to own than it’s worth.
In the NFT example above, the seller has to pay the ETH gas fees to facilitate the tax loss sale. So their bad day at the track is only mostly over.
Amex Platinum Airline Benefit
If you have an Amex Platinum card, you probably have a $200 airline incidental fee credit. One of the things that I have to remind myself to do at the end of the year is to make sure that I’ve used the full credit. If there’s still some credit remaining, I will usually book cheap Southwest flights, then cancel the flights and have the refunds issued as a Southwest credit. It’s kind of a hassle, but that’s probably among the lower hanging fruit in terms of getting the full value out of the Amex Platinum card. The other credits and benefits are even more marginal!
-John Reeder, Risk of Ruin Podcast