Uncut Gems is a high-octane anxiety ridden trip of a film. Yet, whenever my body tells me to turn off the film, I keep feeling compelled to watch it all the way through until by the time the film is over, I need the peace and tranquillity of a white room with no external objects or fast moving stimuli. A ten day Vipassana meditation course may be needed!
The main protagonist of the film, a Jewish New Yorker jeweller named Howard Ratner played by Adam Sandler, keeps unnecessarily falling into tricky and at times dangerous situations. On one hand, I want to sympathise with him and his misfortune, but on the other he ultimately creates his own problems. It’s like he wants to spend his life swimming in quicksand when it would be less painful just to take the smooth plain vanilla road.
What’s more he is a father with kids to support. If he were single, hell, get into any kind of hot mess you want. But if you have a family, that is beyond selfish. Ratner’s mind is like a fast flowing river. There are seldom any moments of peace in his frantic dome. It is a gamblers mind he possesses and the thrill of it all seems to be his raison d’etre. A pretty pathetic one. He’s like the quintessential stock market speculator who never does any thorough due diligence on a stock and gets excited simply by a hot tip or any kind of hype. He will be the first to catch the FOMO (fear of missing out) fever.
Even when he wins big, like towards the end of the film, there is no grace in his behaviour. His gamblers’ mind simply glows more red hot. And if his life weren’t abruptly cut short, you can bet your bottom dollar he would keep gambling with whatever money he has left until he’s back to a no money situation or worse, further deep in debt.
People close to him find him draining. Especially his long suffering wife who bears the bulk of his chaos. One night she tells him to his face; ‘I think you are the most annoying person I have ever met’. And she’s right. He’s an exhausting and draining motherfucker. An impulsive, low grade hustler bereft of wisdom. I think any woman in a relationship long enough with Howard would get so beaten down to the point where a boring but dependable relationship devoid of even a modicum of drama would seem very attractive.
As ghastly and shady as the people pursuing him may be, they ultimately do him a favour by gunning him down. Throughout the film he is a hazard to himself and those around him. He’s like some insufferable stray dog constantly barking. A broken record. In the end someone somewhere was bound to lose patience and say, ‘Somebody shoot the dog’.
Tesla is arguably the most divisive and one of the most high profile and hyped stocks in the world today. I have written about Elon Musk and his companies in previous blog posts over the last few years . During that time I was in awe of the projects he was working on. How he has been able to take Tesla from a niche electric car company and scale it to a massive mainstream global company is beyond impressive. Ditto his progress with his other company, Space Exploration Technologies. Although the space industry is still a very nascent industry, he has arguably done more than any other commercial entrepreneur to create the infrastructure to make it possible for space exploration to potentially become a thriving and fast growing industry.
Since Tesla first became a public company, it has always attracted a lot of attention. On one side, there are millions of Tesla supporters and fanatics who worship Elon Musk almost elevating him to the status of a powerful religious figure. In their eyes he and his companies can do no wrong. Then on the other side, you have a group of sceptics. The most extreme contingent of this group are full-on haters who intensely dislike Musk and everything he stands for. Where the most passionate supporters see Musk and his companies as the future – the most powerful narrative being that some see him as the man who will pave the way to make the world an interplanetary species – his most damning critics see him as a fraud and a charlatan – an emperor with no clothes. The most fervent haters are the yang to the yin represented by the most fervent fanboys. However, the more thoughtful doubters are not cut from the same cloth. They draw their own conclusions on Musk and his companies based on facts and rigorous research.
Back in December 2019, I wrote a post on my predictions for the coming decade . One of my predictions was that I stated that it may be unwise to bet against Musk and his companies – basically echoing Peter Thiel’s mantra of “Don’t bet against Elon”. Since I made this prediction the share price of Tesla has been on an epic tear. Although I could see a lot of potential for the share price of Tesla to do well – merely on the prevailing sentiment alone. I could never in a million years have expected the share price to have gone absolutely parabolic in such a short space of time. Back when I made my prediction, the market cap of Tesla was around $50bn. Today, it is just over $1tn.
For the last decade or so, like many others, I had a lot of admiration for Musk and his companies. I was even in awe of him as I couldn’t think of another entrepreneur who was doing what he was doing and had the same breadth of vision as he had. However, today I have very mixed feelings. What has changed? I think in the past I was most definitely swayed by the narrative. But I don’t think it was just that. As I just said, who else is doing what he is doing? Nobody else has a pure EV and energy company on anywhere near the same scale as his. What’s more, no other entrepreneur has a commercial space exploration company at the same level of development as his.
I suppose any scepticism I had of Tesla back then was purely related to the company’s financial statements and how out of whack they were with it’s market cap. Yet, unlike the sceptics of the time, I reasoned to myself that Tesla was not only a high growth company, it was also more than simply just a company selling EVs. It was and had the potential to be much more than that and that at some point in the future it would eventually grow into it’s high market valuation. This was also along the same lines as the Scottish investment firm, Baillie Gifford, who are one of the earliest investors in the company and have seen their stake grow exponentially since then.
Many of the Tesla sceptics operate with the ticker symbol TSLAQ via Twitter. Whilst a section of this group may be hateful and spread lies and misinformation on Tesla, there are a good number who have legitimate concerns about the company based on facts. And I think it’s important that these are not swept under the carpet. One high profile example are those shared by the fund manager David Einhorn back in 2019. Einhorn is known for his bet against Lehman Brothers bank just before it collapsed during the 2008 Financial Crisis. It is easy to dismiss Einhorn today, especially since he (like others) had short positions on Tesla stock at the time and got badly burnt when the stock exploded in value in 2020. Musk also famously sent Einhorn a pair of “short shorts”.
However, I wouldn’t write Einhorn off so fast. One of his major criticisms of Tesla relates to it’s acquisition of Solar City back in 2016. Einhorn went as far as saying that Musk “knowingly orchestrated a significant fraud by arranging the $2.6 billion acquisition at a time when SolarCity was insolvent. Musk and his family had a huge conflict of interest, but rather than properly recusing himself, Musk initiated the transaction and drove the process.” Indeed, this acquisition was controversial. Solar City was a company founded in 2006 by brothers Peter and Lyndon Reve who are both cousins of Musk. Musk himself was the chairman of the company and instrumental in helping to found it. Solar City since it’s inception was, however, quite a cash intensive company. Although it was growing at a fast pace, it was also losing a large amount of money. For example, in Q1 of 2015, the company generated $67.4m in net revenue, yet made a loss of $146.9m with operating expenses alone being $147m. Back in Q1 of 2014 operating expenses were less than $90m . Often such losses are normal for a high growth company since it is often assumed that in the longer term the company may develop a sufficient moat as well as a level of scale and market leading position meaning that over time there is every possibility that it would be generating much higher revenues and solid net income profits. A low interest rate environment has also been very favourable for these kinds of companies since it means that money is cheap and thus it doesn’t matter if they are not making any net profits any time soon. However, in 2016 Solar City desperately needed a bridging loan of $200m  to avoid defaulting on it’s debt and it was struggling to raise money for it. It seemed that no one was prepared to lend Solar City the money. Failure to secure this loan would have likely resulted in the company going bankrupt. This would have had significant consequences for Musk and his companies. SpaceX owned 77% of the Solar City bonds  and if Solar City were to go bankrupt, this would have affected SpaceX in a huge way and possibly even it’s ability to continue as a going concern. It would have also been a huge financial blow for Musk since he personally owned over 22 million shares of Solar City stock worth nearly half a billion dollars . Thus, Einhorn, whether one may like it or not, is quite correct in his assessment that Musk committed fraud on a grand scale and that there was an enormous conflict of interest. Musk may have dressed the acquisition up as a takeover of a company aligned with Tesla’s own ambition’s as a clean energy company, when the truth is it was a bailout of his cousins’ struggling company not just to save his cousins’ skin but also his own and that of his companies.
The other glaring concern for me are the sheer number of lawsuits against Tesla. There are over 1000 lawsuits against the company of which 200 are in China alone . Aside from the Solar City case, perhaps one of the biggest and most unnecessary burdens on the company is Musk’s own erratic and unpredictable behaviour, which have led to lawsuits and fines. Perhaps, the most well known one is from back in August 2018, when Musk stated via Twitter that he was considering taking Tesla private and that he had ‘funding secured’. Not only did he not provide any evidence of having ‘funding secured’, he also violated federal securities laws with his tweet. The plain fact is that if any other CEO had done what Musk had done, they would have been fired on the spot and probably would have faced consequences of a far greater magnitude. I remember that time well and the whole furore that ensued. Yet, at the time I thought it was inconsequential in the grand scheme of things. My mindset was very much, ‘Ah, that’s just Elon being Elon. Fundamentally, he’s a genius and a visionary and this kind of behaviour is just part of his eccentricity.’ But I don’t know whether it is morally right to be so lenient on something so serious and to just shrug it off. This is especially true since this is not the first or the last time when Musk has behaved in an erratic and destructive way on his Twitter account. Sometimes, his tweets have been beyond the realms of bad taste. There is of course that well known incident from 2018 where he called a British diver who saved a group of young boys trapped in a flooded cave in Thailand a ‘pedo’. Then, rather more recently, he sent the following tweet earlier this month to Ron Wyden, a Democratic Senator from Oregon; “Why does ur pp look like u just came?” Wyden was critical of Musk’s decision to sell portions of his Tesla stock to pay taxes in accordance to a poll he proposed on Twitter. Wyden quite rightly stated that Musk paying tax, ”shouldn’t depend on the results of a Twitter poll.” . Just a few days ago on November 13th, US Senator Bernie Sanders tweeted, “We must demand that the extremely wealthy pay their fair share. Period.” Musk responded to Bernie’s tweet with, “I keep forgetting that you’re still alive”. In a perverse kind of way, I find a lot of this quite entertaining. The world of Twitter would most certainly be a duller place without Musk’s tweets. Yet the difference is that Musk is no ordinary Joe. He is currently the richest individual in the world due to the explosive rise of the share price of Tesla. It is also never wise to taunt or provoke prominent people in government positions, especially with that level of power. After all, even if you are the richest person in the world, it is ultimately the government that operates the switch, not you.
There have also been cases regarding the safety and shortcomings of Tesla’s vehicles . These have included battery fires. As early as 2012, there were leaked emails saying that Tesla had knowingly sold Model S vehicles that had design flaws in it’s batteries making them very vulnerable to catch fire. This has been a never ending issue and even involved the National Highway Traffic Safety Administration (NHTSA) intervening in 2014 and 2019. Even as recently as this year, Chinese regulators also stepped in after a number of customers in China reported and complained about the batteries in their Tesla vehicles catching fire. Furthermore, there have been reports of break failures, “whompy wheels” (where the suspension system of the vehicle breaks sometimes resulting in a wheel collapsing or falling off), and cases of sudden unintended acceleration. Perhaps the most high profile safety issue relates to Tesla’s Full Self Driving (FSD) software in it’s vehicles. This is controversial as it’s very misleading. The FSD software is anything but and requires drivers full supervision. However the fact that it is advertised as such is dangerous as it has resulted in multiple accidents where the drivers were under the misapprehension that they had full self driving software in their vehicles. Whether Tesla will ever develop true self driving software is another matter but by falsely selling products advertised in this way is not only misleading it also poses a serious risk to the drivers of it’s vehicles as well other drivers, cyclists and pedestrians.
I could go on but I think I’ll leave it at that. What is quite astonishing is that in spite of all these issues, millions of people continue to worship Elon Musk in an almost blind and blinkered way. On Twitter, he currently has over 60 million followers. When Peter Thiel says, “Don’t bet against Elon” he means don’t bet against a visionary a la Steve Jobs. And I continue to echo Thiel’s words too, but for different reasons this time. For me, betting against Musk implies betting against a universal chosen one with millions of fanatical and devoted fans. All the aforementioned issues and concerns don’t matter and have barely made a dent to his popularity. This is why for many years, short sellers, have lost staggering amounts of money betting against Tesla. And not all these short sellers are fools. Some of them like David Einhorn and Jim Chanos (who famously made a fortune betting against Enron) are highly respected and do tremendous amounts of fundamental analysis on the companies they focus on. They were both right in their analysis on Tesla, but what they forgot to account for was the sheer fandom and worshiping at the Temple of Musk. As a wise bulletin board poster once told me when commenting on the amount of money lost by Tesla short sellers; “Never bet against the great levitator”. Quite.
The economist John Maynard Keynes said it best with his immortal words about financial markets being able to stay irrational longer than one can stay solvent. I think it was Keynes who said those words yet it doesn’t matter. What matters is how important and powerful those words are. I personally think these are some of the most important words of advice for any investor whether they are a novice or seasoned. One may have complete confidence and conviction in a security they are investing in yet there is always the chance that things don’t go according to plan regardless of how much due diligence they may have done on it.
The Big Short is a well known book by Michael Lewis, which was later made into a successful film. The book is about an investor and fund manager named Michael Burry who places an enormous bet against subprime mortgage bonds. He was one of a small handful of investors who at the time discovered how rotten those bonds were and how they had the power to create an enormous financial crisis, which they eventually did in 2007-8. He placed his bet relatively early in around 2005. At the time, it was seen as a rather contrarian thing to do as the majority of people in the financial world were amazingly unaware of how toxic those bonds were.
Although Burry would eventually be vindicated and handsomely rewarded for his bet, I personally think that the way he went about it wasn’t so smart. To be clear, I am not for one moment knocking his deep research and analysis. In fact, I applaud his diligence and ability to discover serious flaws in that corner of the market whilst everyone else it seemed was asleep at the wheel. Yet I don’t think it was a smart move for the following reasons. Firstly, his move to short those bonds represented a very high percentage of his total fund, which made a lot of investors very nervous. If you are a fund manager or work for a fund, it is quite common for an individual security to not represent more than 10% of the total fund. Anything higher than that percentage has the potential to create a lot more risk and volatility to the fund. What’s more, it was expensive to hold such a large short position as large payments to service it were due every month. It was understandable why those investors and others at his fund were nervous and had very little patience. Secondly, and more importantly, I don’t think Burry ever familiarised himself with Keynes’ quote. Although it took about two years for his bet to come good it could have taken much much longer. It is entirely plausible that had his fund had to wait even longer for his bet to come good there would have been so much pressure on Burry to finally close his short and thus cut the loses the fund was making by holding it.
You see it doesn’t matter whether Burry was fundamentally right in his analysis. He was completely correct. These bonds were a train wreck waiting to happen. But that’s not the point. The point is that timing the markets is very very difficult. Alternatively, Burry could have done the following. He could have still made his bet yet it wouldn’t have represented more than 10% of his total fund for example. That way, there would be less tension and pressure on Burry to close his position in the event that it was going to take so long to come good. What’s more, it would have still made him and the investors in his fund a lot of money when that day would eventually arrive.
This brings me to another well worn adage in the investment world of never having all your eggs in one basket. Although this may be a cliché it is so very true. Although enormous fortunes are made by putting all one’s huevos in one single basket, it is also the fastest way to blow up a portfolio. Burry’s enormous bet came good and he was rewarded, but he could also have been fooled by randomness by some unusual twist of fate.
Over the last few years many investors, including some well known names, lost a lot of money shorting Tesla. Although the rationale behind their decision to short the company was completely understandable, namely that the market capitalisation of the company was not reflective of it’s fundamentals, the share price has nonetheless continued to climb even higher. This right there should be a warning in the perils of going for that ‘big short’. As I already stated, it is ok if such a position is not so great that it poses a serious risk to an entire portfolio. But one can only imagine those legions of investors having a Michael Burry style moment with Elon Musk’s company.
Interestingly, it seems that Burry himself has now thrown his hat in the Tesla Short ring. I may be wrong, but it appears that his fund is betting against Tesla to the tune of 40% of the entire weighting of the fund. I wish him luck. Will his bet come good again? Or will he join the scores of other investors who got badly burnt betting against Elon?
Whenever someone asks me to choose between The Beatles or The Stones I will sometimes reply with ‘neither’. Instead I will say The Kinks. There is something special and close to my heart about that band. Throughout the 60s they had hit after hit and were certainly one of the leading British groups of that era. Yet many listeners of The Kinks I feel only penetrate the surface of this great band. They know the hits, but few venture beyond those songs as popular as they may be. I came to the band a little late. I first got into the group via a greatest hits compilation I purchased when I was 19. As much as I cherish all those well loved songs, what struck me as odd was that the compilation ended at the 1970 hit single Apeman; as if the group ceased to exist after that song. It seems to be the same with many other Kinks compilations.
Most of their well known hits are from the time when they were signed in the UK to the Pye record label from 1964 until 1970. The vast majority of their most well known songs such as You Really Got Me, Sunny Afternoon, Tired Of Waiting, Waterloo Sunset, Days and Lola fall within those years. Personally, my favourite years are from 1968 to 1975. I love those early songs and they will never get stale and always retain a timeless quality to them. For me though, the most exciting years are when the group’s chief songwriter Ray Davies began to compose these brilliant and ambitious concept albums starting with the 1968 album The Kinks Are The Village Green Preservation Society(TKATVGPS) and ending with the 1975 album Schoolboys In Disgrace. Those albums receive mixed reviews from fans. For example, the former is today frequently heralded as a classic landmark album and can be seen in many ‘greatest albums of all time’ polls. The latter album, on the other hand, gets invariably torn apart. Perhaps those journalists and listeners never even bothered to actually listen to Schoolboys? They probably saw the hideous front cover and decided that they didn’t need to investigate further; their prejudices already set in stone.
During the few remaining Pye years, The Kinks released some very strong albums. In 1968 they released the aforementioned TKATVGPS album. Then the following year they released the album Arthur, which is just as good as VGPS and is equally held in high esteem. The final two albums they released on Pye were the 1970 studio album Lola Vs Powerman And The Moneygoround and the 1971 soundtrack album Percy for the film of the same name. Lola Vs Powerman… produced the hit singles “Lola” and “Apeman”. The former is one of the band’s best known songs.
After the band left Pye, they signed a new deal with RCA records in 1971. Their tenure at RCA would last for four years and during this time the band continued on it’s trajectory of releasing concept albums. Just as they signed to RCA, they released the album Muswell Hillbillies. It’s a strong album with some fine songs on it. The next year they released the album Everybody’s In Showbiz. Personally, I have mixed views about this album. On one hand, I like Ray’s ideas and inspiration behind it as well as songs such as Celluloid Heroes and Sitting In My Hotel Room. Both these songs are excellent. Celluloid Heroes has gone on to be covered by multiple artists – most notably Bon Jovi. It contains some of Ray’s finest lyrics.
Then in 1973 and 1974, the band released two albums; Preservation: Act One followed by Preservation: Act Two. All in all, neither of these albums were particularly well received by music critics at the time; especially the Preservation: Act Two album. However, after listening to both those albums I have come to the conclusion that they are the two lost masterpieces of The Kinks’ cannon of albums. And it is those two albums that I want to make the centre of this article. Whilst it may be too controversial to say that they are the best albums by The Kinks, I think I can firmly say that they are Ray Davies’ most ambitious works. It doesn’t matter whether one thinks those albums are a success or a failure. I don’t personally think they are a failure. What I will say is that those albums took Ray down avenues he never, or at the minimum only casually, ventured down before. He had already explored subjects like greed, poverty, inequality and injustice in society earlier on via songs like ‘Dead End Street’,‘Brainwashed’ and ‘Powerman’. But on the Preservation Act albums he goes right into the heart of darkness. The Village Green Preservation Society(VGPS) album is almost soft liquor by comparison. Whilst the songs on VGPS are very strong and vivid, they are also accessible. They don’t rock the boat nor do they, at least superficially, take the listener to an ostentatiously dark and uncomfortable place. The Preservation Act albums, on the other hand, are much more polemic.
We’ll start with the Preservation: Act 1 album from 1973 before delving more deeply into Preservation: Act 2. One of the gems of this album is the song Sweet Lady Genevieve – a song that could fit quite comfortably with the cannon of better known Kinks hits. Of the two Preservation Act albums this one is lighter in tone and there are even echoes of the earlier VGPS album via songs like Sitting In The Midday Sun and Daylight. Another pearl on this album is the song ‘Where Are They Now?’…
I’ll sing a song about some people you might know They made front pages in the news not long ago But now they’re just part of a crowd And I wonder where they all are now.
For me this song is an affectionate tribute to all the mavericks. The individual and special people who were a blast of colour in a world that is becoming increasingly colourless and homogenous. In the context of the earlier VGPS album that would be characters like Johnny Thunder. Some strands of humanity are evident on Preservation: Act 1. But this is deceptive. The presence of the song Money And Corruption/I am Your Man poisons any idyllic and romantic notions…
Money and Corruption Are ruining the land Crooked politicians Betray the working man, Pocketing the profits And treating us like sheep, And we’re tired of hearing promises That we know they’ll never keep.
With this song Ray dives straight into the underbelly of the system – taking it on like a firebrand revolucionario a la Hugo Chavez. This continues and is reinforced in the end refrain part of the song with it’s Communist Manifesto overtones…
I visualize a day when people will be free And we’ll be living in a new society. No class distinction, no slums or poverty, So workers of the nation unite, Workers of the nation unite, People of the nation unite.
This song sets the tone for the follow up Preservation: Act 2 album. On the later released bonus edition of the Preservation: Act 1 album is the song ‘Preservation’, which wasn’t featured on the album when it was originally released. It’s lyrically not only a very strong song but totally encapsulates the spirit of both Preservation albums as a whole. It also, along with the song Here Comes Flash, introduces the character Flash, a central figure in the follow up album who represents everything that’s wrong in the world – a psychopathic, greedy, amoral, corrupt and duplicitous individual who lacks empathy and is only out for himself. He is the type of person that would make Gordan Gecko blush…
Once upon a time In a faraway land Lived a villain called Flash He was such a wicked man He terrorized the people He broke arms and crushed hands He ruled with a fist and he purchased all the land
Then he plowed up the fields and cut down the trees For property speculation And he did it all for a pot of gold And for his own preservation
Preservation: Act 2 is a dark unsexy beast of an album. Whatever light there was on Preservation: Act One has now been blocked out. If VGPS is all rural fields, church fetes, strong bonds of trust, tea and scones and strawberry jam, then Preservation Act Two is polluted rivers, eyesore landscapes, revolutions, and societal collapse where everyone just looks after number one. The VGPS album has a kind of innocence to it. Even the mildly dark characters in the album like in the song Wicked Anabella completely pale in comparison to Flash. The world of VGPS is a paradise compared with the world of Preservation: Act Two, which represents a paradise that is well and truly lost. It is about as east of Eden as one can get.
The life portrayed in Village Green is overall idyllic and peaceful. Yet it is a bubble shielded from the truly evil and disruptive forces of life. It is naïve to think such a life like that one can just go on forever. Flash hadn’t yet pitched up to turn things upside down.
The first song on Preservation: Act 2 to really get things going is the song When A Solution Comes…
When a solution comes, It’s gonna breathe right down on everyone. When a solution comes It’s gonna cover up the clouds And eclipse the sun And black out a pale blue sky, And everybody’s gonna be terrified, Because they’re all going to feel the bite And there’s going to be a revolution
‘Days’ this song is not; in that iconic song from 1968 there is sadness, loss and grief. But there is no bitterness. There is no hate nor is there fear. This is evident in the following lyrics;
You took my life, But then I knew that very soon you’d leave me, But it’s all right, Now I’m not frightened of this world, believe me.
Yet in When A Solution Comes there is a change in the weather. This is the beginning of a new period of fresh hell that will reign down on all of society. In the book The Fourth Turning, the authors William Strauss and Neil Howe look at the world over the last 500 years and locate a series of cycles each lasting a generation. Within each generational cycle are four turnings. The first turning represents a ‘high’: this is a period of stability. Trust in institutions is strong and individualism is weak. A new civic order is established the old values regime collapses The second turning represents an ‘awakening’ where the civic order established in the first turning begins to come under attack from a new values regime. The third turning represents an ‘unravelling’. During this era trust in institutions begins to weaken and individualism strengthens. The first turning civic order collapses at this point and eventually taken out by the new values regime. The forth and final turning represents a ‘crisis’. By this time the world is in chaos as the the new values regime replaces the original civic order created in the first turning with a new one.
In the context of the trilogy of all three Preservation albums, the song When A Solution Comes represents the ‘unravelling’ phase of society. It is not in the full ‘crisis’ phase yet, but it is already well on it’s way. On the other side of the coin, the opening title track of the VGPS album in some ways represents many attributes of the first turning….
We are the Village Green Preservation Society God save Donald Duck, Vaudeville and Variety We are the Desperate Dan Appreciation Society God save strawberry jam and all the different varieties Preserving the old ways from being abused Protecting the new ways for me and for you What more can we do
The lyrics of the title track of that album for me evokes a strong sense of unity. A sense of everyone looking after each other. Not allowing society to disintegrate. Keeping the peace. And that requires making an effort and caring. Once people stop caring, apathy begins to prevail and with that goes the ties that bind paving the way for disruptive forces to take over. The consequences of this are probed deeply in Preservation: Act 2.
The song Shepherds Of The Nations is one of the strongest songs on the album and in my view represents the new horror show of this dark turning….
Down with sex and sin, Down with pot, heroin. Down with pornography, Down with lust. Down with vice lechery and debauchery.
We are the new centurians. Shepherds of the Nations. We’ll keep on our guard For sin and degradation. We are the national guard Against filth and depravity, Perversion and vulgarity, Homosexuality. Keep it clean.
When all of a sudden all basic freedoms that were once taken for granted have now been eroded and a new cabal of neo-puritan Gestapo-like folk have taken over the asylum. Rather than the world taking a step forward and continuing to evolve and flourish, it has been abruptly thrown off its course and has taken a thousand steps backward towards some unfolding new sterile, lifeless and fearful Middle Ages era wasteland; where all the flowers start to wilt and die, and turn a new shade of grey. All the colours of the Village Green world now dulled to cigarette ash.
The song Nobody Gives is another dark slice of what it’s like to be in the living in the middle of a turbulent fourth turning style world…
I can’t understand why everybody’s quarreling, Nobody gives in case they lose face, And everybody’s guilty and everybody’s innocent, And the fact of it is nobody gives any more.
Once upon a time there was a period of peace, stability and trust amongst one another. The aforementioned VGPS title track nails that sense of societal harmony perfectly with the lyrical couplet, ‘Preserving the old ways from being abused / Protecting the new ways for me and for you‘. But in the song ‘Nobody Gives’ everyone has turned against one another. They have become fearful and full of mistrust. Any attempt at simply performing any altruistic acts of kindness is simply not worth the bother and in a climate of unanimous fear this could even backfire. Thus it is easier and safer to just not care anymore.
As the song gathers pace, it takes the listener on a vivid and sombre journey through the roots of this social breakdown leading to, in the example of this song, the rise of Hitler…
Back in nineteen hundred and twenty-five There were thousands of people struggling to survive. There was hunger, unemployment and poverty, Then in 1926 they decided to be free So they all went on strike and The workers told the unions, who blamed it on the government, The politicians blamed it on the strikers and the militants, Everybody’s guilty and everybody’s innocent, But the fact of it is nobody gives any more.
Back in nineteen hundred and thirty-nine There were scores of German military waiting in a line, And the Fatherland wanted what the world wouldn’t give, And then Hitler decided he could take what was his, So they all went to war and said Kill all the left-wing intellectuals, Annihilate the Jews and wipe out their race, Eliminate the weak because they’re ineffectual, And the fact of it is nobody gives any more.
In 1923, when Germany was then the Weimer Republic, the country experienced a period of devastating hyperinflation. This had the effect of throwing millions of citizens into acute poverty – especially those who didn’t own any hard assets that could protect them from this inflation. Any savings in the local currency that had been accumulated via hard work and over a long period of time had very quickly become worthless. The grinding poverty and desperation aside, one can also only imagine the extreme anger and injustice felt by those who had lost all their life savings. They wanted blood and someone to blame. Hitler emerged at a time when this anger and desperation was reaching boiling point. It is only when a society is in meltdown and in the eye of a fourth turning that a figure as evil Hitler can rise to the top. In a Village Green world of togetherness and mutual respect for one another, Adolf wouldn’t stand a chance.
Overall, I think both these Preservation Act albums should be essential listening and certainly deserve to be much more wildly known. They not only complement the earlier and more well known VGPS album, they also give the listener a glimpse into the more intricate and visionary workings of the mind of Ray Davies. I think this was perhaps lost on some of the music critics who were reviewing both albums at the time. The lyrics aside, I think some credit also needs to go to Ray’s brother Dave. Generally, I don’t think he gets another credit as a guitarist. His guitar work is a really important part of both albums and I feel it sets the tone very effectively on some of the songs.
Two further albums followed in 1975, Soap Opera and Schoolboys In Disgrace, before the group left the RCA record label. Like the earlier Preservation Act albums, neither album got overly favourable reviews. Yet I think they are both interesting in their own ways. Soap Opera is a flawed hit and miss album yet the concept behind it is strong and very relevant. I particularly like the songs Everybody’s A Star (Starmaker) and You Can’t Stop The Music. The former song quite simply describes how anyone can be a star; even the blandest and most personality and talent bereft of individuals. Ray created a character called Norman to personify such people.
Schoolboys In Disgrace also has it’s moments. Unfortunately, it suffers from a front cover that is quite frankly a veritable abomination. I feel it unfairly undermines the whole album. That is certainly one reason why many listeners do not give this album a proper chance. However, those who look beyond this monstrosity of an album cover will be rewarded for their curiosity. It is not a perfect album, but there are some gems on there like Schooldays, I am In Disgrace and The Hard Way . It is also conceptually a very interesting album as it is based around a disruptive and unruly schoolboy who would eventually develop into the vile and evil character Flash of the earlier PreservationAct albums. So, in a way, this album plays an notable role next to those albums. It is an important part of that complex puzzle.
Fame can be a dangerous thing. Some people seek it because in their minds it fills a void. If you are talented and have a lot to offer it presents the opportunity to be valued and respected by many people. Fame has always had it’s drawbacks yet I feel there are two different periods of time that one must be aware of. These are Before The Adoption Of The Internet (BTAOTI) and After The Adoption Of The Internet (ATAOTI). In The last 25 years, the growth and development of the internet has been staggering. We currently live in a world of instant hyper connectivity.
If I had to pick a time to be famous I would pick BTAOTI in a heartbeat. News travelled slower back then. The digital world was less developed. I have no nostalgia or desire to live in the past, but when I look at the growth and development of social media today I flinch at the concept of fame. I would even go as far as saying that eventually it may even lose it’s appeal. It would take real guts to go down that path so much so that anonymity would become increasingly attractive. Andy Warhol said that everyone would be famous for 15 minutes. The internet has provided a platform for everybody to publicly project themselves if they want to. There is so much content on the internet today. There is no way one would be able to absorb all the digital content out there in one lifetime. According to Statista, as of May 2019, more than 500 hours of video content was uploaded to YouTube alone every minute.
It is increasingly a rarity nowadays to not have any personal platform or content online. To be purely anonymous will be rarer and more cherished than fame itself.
A few years ago I wrote a post entitled ‘Talent Is Cheaper Than Table Salt’. In this post I outline how talent is actually not so rare and rather it is hard work that matters when it comes to finding success.
I’ve often thought about this post, especially as it is one of my most viewed posts. Yet since I first wrote it, I’ve increasingly began to question it, even though, at least at a logical and basic level, it may be correct. But what if, just what if, I may have got it completely wrong regarding talent? Maybe genuine talent is actually rather scarce. To be clear, when I say this, I mean a kind of talent that is just so special and very hard to replicate.
The quote in my original article by the writer Stephen King goes like this; “Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work.”
King is correct, especially if one also takes into account the second sentence of his quote. It is all true. Yet talent and hard work are two different things. Anyone can develop a hard work ethic, but not everyone has real god given supernatural talent. I think we need to really reassess how we define talent. I also dispute this notion that if you work hard you will automatically be rewarded. We fall victim to something called ‘Survivorship Bias’ – only looking at success stories and overlooking all the failures.
There are countless stories of those who worked extremely hard and didn’t ‘make it’. Yet those stories seem to be lost on us. But that doesn’t mean that one should not work hard. Absolutely not. Hard work, unexpected challenges and multiple failures are an important part of one’s character building. Saying that hard work is a waste of time sets a bad example.
As a whole, we often neglect to take into account just how random the world can be. Please see my other post Fooled By Randomness. Life is not as linear as we think it is. There are some things that are simply beyond our control.
But getting back to the subject of talent. When I look at the people I admire throughout history one thing they all have in common was that they were special. They were not like everybody else. They had talent in spades and often there was hardly any chasm between their life and their art. Now THAT is rare.
Start-ups are an important part of the business landscape. More crucially, the best start-ups provide much needed solutions to long standing problems. They provide real value to consumers. However, one thing I have observed over the years with certain start-ups is this mantra of ‘growth at all costs’.
If you are the founder of a start-up that provides a product or service that people really need and for a reasonable price, it is fair to say that this start-up has a bright future with a large potential for sizable growth over the coming months and years. That is all well. Yet, it does concern me when I observe the ones that have this ‘growth at all costs’ mindset.
No matter how driven or ambitious a founder may be, it is absolutely paramount that there is a healthy working environment amongst all the people who work at the company. There is currently a huge scandal with the UK craft beer company BrewDog over the maltreatment of many of its workers. BrewDog has been a huge success story. Ever since it’s founding a little over a decade ago, it has grown exponentially and is now the largest craft beer company in the country. It’s become a ubiquitous brand with it’s beers sold in all major supermarkets.
I could be wrong, but I am guessing that during those years when BrewDog was growing at such a fast pace, there was very much a ‘if you can’t stand the heat..’ atmosphere in the organisation. Even though BrewDog do make very good beers, the craft brewery industry is very competitive. There are many players and the way that BrewDog has been able to get to the position it is currently at today has been by scaling very fast in a relatively short period of time. By growing at such a rapid pace, it has now got to a size that gives it a clear edge over it’s competitors. If it had not embarked on this journey of aggressive growth it likely would have lost out to another competitor in the space.
Yet a big consequence of adopting an aggressive growth strategy is that it can create a toxic environment in the workplace. It suddenly becomes very easy for founders/chief executives to forget to care about the wellbeing of the other workers in the organisation as, in an almost single minded fashion, they have their eyes set on reaching their lofty targets they have set themselves out to achieve. They fail to understand that the workers are an integral part of the growth/success of their business. Without those workers, it is unlikely that their company would have been able to grow so spectacularly. This is especially true of those founders with very large egos and a lack of empathy for others.
A more extreme example of a growth at all costs business that makes Brewdog look like a plain vanilla enterprise is the rise and fall of office rental space company WeWork under the leadership of it’s colourful founder Adam Neumann. Unlike Brewdog, WeWork never made a profit and simply haemorrhaged cash. Billions of dollars of venture capital money was thrown at the company, most notably by Softbank whose founder and CEO, Masayoshi Son, really believed in the company. At one point WeWork had a valuation of over $40 billion. An eye watering valuation when one takes into account the fundamentals of the business.
WeWork also suffered from a toxic workplace culture. Those Brewdog workers, who via the Twitter group Punks With Purpose are bringing to light the less than perfect behind the scenes picture of the business, accuse the company of being ‘built on a cult of personality’. They take aim at how the company and it’s founders cultivated an image of the company as authentic (applying a ‘punk ethos’), caring about the environment, being forward thinking and progressive, and an amazing and cutting edge place to work at. Yet the irony is that it was anything but rosy. In their own words they scathingly say that “The true culture of Brewdog is and seemingly always has been, fear”.
Yet compared with WeWork this is small beer (no pun intended). The larger than life WeWork founder Adam Naumann would make make Brewdog co-founders James Watt and Martin Dickie blush. He took the term ‘cult of personality’ to another level. To the point where he was able to get some of the most powerful heavyweights in the venture capital space to invest megabucks in his business. Even though, with just a modicum of due diligence, it would soon seem apparent that WeWork was essentially a start-up with very poor fundamentals. The emperor had no clothes. Those VCs who were smart enough to see beyond the hype and mega personality of Neumann and actually did some stone cold research on the fundamentals of his business, saved themselves a packet.
Sometimes it is not necessary for a start-up to pursue a ‘growth on steroids’ strategy. It may be that you can create a lot of value and provide a unique solution without the need to aggressively grow. Sometimes large growth can happen by default if suddenly there is a massive demand for your products and services. And that is fine. There is nothing wrong with growth. Hell, there is nothing wrong with full on hyper growth. But not when it’s at all costs. Not when workers are not feeling valued and a dysfunctional and toxic workplace environment manifests.
Before you decide to invest in a company, start-up or venture that is highly risky, there is one very important rule that all investors should heed. We are all aware of the obvious rules such as doing sufficient due diligence and only investing what we can truly afford to lose. However, a less obvious rule, and the one which I am talking about in this article, is focused on having Skin In The Game.
The origin of this phrase is debatable although a quick Wikipedia search tells me that it originates from derby races whereby the owners of the horses taking part in these races have ‘skin’ in ‘the game’. More recently, it has been written about extensively in the works of Nassim Nicholas Taleb. Put simply, it refers to how much ‘skin’ a person has in something or how much personal risk they are willing to take on. For example, in the case of entrepreneurs or founders of businesses, an entrepreneur who has the vast majority of their net wealth tied up in their business has considerable Skin In The Game. Even though they will be handsomely rewarded if the company is successful, they will also go down with the ship and face financial ruin if the company goes belly up. This latter point is crucial.
When I analyse high risk ventures, one thing that is a huge red flag for me is a genuine absence of Skin In The Game. A founder or director of such a company needs to have the majority of their own capital invested. ‘Share options’ do not count. However, ‘director buys’ do.
Another red flag is when founders and directors draw huge salaries, especially if the company is not currently generating any revenues. If a company is not yet making money, a company will be raising money via debt or equity placings (issuing more shares) to keep it a going concern. This is precious cash and should not be eaten up in the form of generous remuneration packages. Alarm bells should be ringing if this is the case.
Founders and directors who have a considerable amount of Skin In The Game in a venture is an indication not only that they truly believe in what they are working on and executing, but also that they are motivated and kept under a considerable amount of pressure to ensure that the company succeeds. They believe in the company so much that they are more than willing to match their considerable belief via taking on a considerable amount of personal monetary risk. If the company doesn’t succeed they will be financially ruined. There will be no government or organisation ready to bail them out if they fail.
I have seen so many high risk ventures collapse where the founders and directors have come out of the wreckage mostly unharmed. They always drew big salaries and their equity stakes were mostly in the form of options rather than purchased with their own money. Founders and directors with little to no Skin In The Game are not under any acute pressure to contribute in the best ways they can. They don’t believe in the company they are working for nor is their heart really in it. It is merely a gravy train.
Thus, before deciding to invest in a company, start-up, venture or anything that is highly risky, one should always ask, ‘How much Skin In The Game do the founders and directors have?’
It is natural to get in the habit of trying to buy or sell shares at a particular price. Sometimes we may get lucky and reach our desired entry or exit point. Other times, we may not always get what we want in this respect. I fall into this trap myself a lot of the time, yet, perhaps unwittingly, am I playing a mugs game?
The future is uncertain. Nobody can predict the future and don’t believe anyone who tells you otherwise. I have written articles where I have talked about where I think certain things may be going, but the truth is anything can happen. I know nothing. Even if we have deep and unmatched levels of foresight we can so very easily, in the words of Nassim Nicholas Taleb, be fooled by randomness. We can be knocked off our perch by completely random and unforeseen events way out of our control. This is one reason why it is important to have a diversified and balanced investment portfolio. If one sector or stock is particularly badly hit by some unexpected event, at least your other investments in other stocks and sectors are not affected. That old chestnut of ‘not keeping all your eggs in one basket’, whilst it may sound hackneyed, still rings true.
Whilst we may or may not be able to get our desired buy or sell price for a particular stock, one thing we do have complete control over is how we weigh and structure our investment portfolios. There may be a company you highly rate and want to invest in, but you want to invest in it at the right price. Right now, you consider the current price too high and have lower price in mind that you hope will arrive. But what happens if that price never comes and instead the share price of the company just continues to climb in value? Instead of hoping to get the right price, or worse, the lowest price, why not say to yourself, ‘What percentage of my total investment portfolio do I want this company or security to represent?’. I think dealing in percentages rather than prices can not only help you to be a better investor, as it can take away a lot of the unnecessary stress and anxiety associated with trying to buy or sell a security at ‘the right price’. It can also help you overcome deeply ingrained cognitive biases.
When you focus more on what percentage of your investment portfolio you want a security to represent, rather than chasing a price, that can give you more control and balance. If the investment goes down in value, the percentage weighting it represents in your portfolio also goes down. If the investment goes up in value, it’s percentage weighting also goes up. By this you can then decide whether you want to be more overweight or underweight in the percentage weight of this particular security. If you want to be more overweight, you buy more. If you want to be more underweight, you sell a portion.
The percentage of what a security represents of your total portfolio is in many ways more important than the price you pay for it. Even if you end up overpaying for a stock or security, if it represents a percentage of your portfolio that is not too detrimental to the overall performance than it is not so bad.
‘As the world has become smaller so its wonders have diminished. There is nothing amazing about the Great Wall of China, the Taj Mahal, or the Pyramids of Egypt. They are as banal and familiar as the face of a Cornflakes Packet.’
He further embellished on this via the following decrees originally established at the Shymkent Hotel in Shymkent, Kazakhstan on October 1999 as part of the so-called ‘first international congress of Anti- Tourists’;
The duty of the traveller therefore is to open up new zones of experience. In our over explored world these must of necessity be wastelands, black holes, and grim urban blackspots: all the places which, ordinarily, people choose to avoid.
The only true voyagers, therefore, are anti- tourists. Following this logic we declare that:
The anti-tourist does not visit places that are in any way desirable.
The anti-tourist eschews comfort.
The anti-tourist embraces hunger and hallucinations and shit hotels.
The anti-tourist seeks locked doors and demolished buildings.
The anti-tourist scorns the bluster and bravado of the daredevil, who attempts to penetrate danger zones such as Afghanistan. The only thing that lies behind this is vanity and a desire to brag.
The anti-tourist travels at the wrong time of year.
The anti-tourist prefers dead things to living ones.
The anti-tourist is humble and seeks invisibility.
The anti-tourist is interested only in hidden histories, in delightful obscurities, in bad art.
The anti-tourist believes beauty is in the street.
The anti-tourist holds that whatever travel does, it rarely broadens the mind.
The anti-tourist values disorientation over enlightenment.
The anti-tourist loves truth, but he is also partial to lies. Especially his own.
Considering these resolutions were written a little more than 20 years ago, I wonder what Kalder would make of travelling today? In 1999, the internet was barely a few years old. Back then, households that had an internet connection had a slow dail-up connection. There was no broadband and neither were there smartphones. 1999 seems rather ancient compared to the world today in the context of the exponential growth of global digital connectivity.
The world today is much more globalised than the world of 1999. A consequence of this has been even more demand to visit the worlds ‘wonders’ be it the Taj Mahal or the Great Wall of China or cities such as Venice and Florence. The ‘very desirable’ places that the so called anti-tourist snubs.
Then again, on the other hand, such wonders are an important part of the history of a country regardless of whether they are popular or not. Most visitors to India visit the Taj Mahal yet the Taj Mahal is an important part of the history of the Mughal Empire. Indian history is fascinating and one of the best documenters and narrators of this history is the writer and historian William Dalrymple. Dalrymple is a black belt regarding the history of the Indian subcontinent and has a deep passion and interest for that part of the world. So much so that he has lived in India for over 35 years. What this means is that this goes beyond any labels or identity. Dalrymple is neither a tourist nor an anti-tourist. Traveller or dilettante. He is simply someone who loves the subcontinent and dedicates a substantial chunk of their time to writing, educating, reading and learning about it.
When I think of my very first trip to India, I did a lot of the typical tourist things. I visited the Taj Mahal in Agra, I visited all the well trodden places in Goa and went on popular tours. Yet I also, unwittingly, did a lot of anti-tourist activities. I stayed in some of the cheapest and most unsavoury guesthouses I could find. I ate street food at rock bottom prices. I developed a habit of roaming the streets of the more down and out parts of the cities I visited. I didn’t document any of this neither did I really brag about them. I had no digital social media accounts at the time and I never kept a physical journal. Friends and family would ask me if I was writing about my trip, but I had no desire to. It wasn’t indolence. I suppose I was adrift in multiple intangible fleeting experiences and frequent moments of disorientation and I had no inclination to hole myself in my threadbare guesthouse room to put it all down to paper. People often talk about ‘finding one-self’ or ‘becoming enlightened’, but I wanted to get away from myself. In at least a semi-masochistic way, I revelled in my anonymity and frequent discomfort.
Every time I spoke to a tourist who expressed an interest to visit Brazil they would invariably say that they wanted to visit Brazil during Carnaval and specifically visit the city of Rio De Janeiro. In my mind I would say to myself, ‘I would like to visit Brazil anytime except during Carnaval.’ During this period, especially in Rio, accommodation prices go through the roof, many parts of the cities become unbearably overcrowded and the levels of crime spiral out of control. Rio is already a dangerous enough city at night, do I really want to visit it when it becomes even more dangerous? Nao obrigado!
Staying on the subject of Brazil, one popular activity many backpackers undertake when they visit Rio is a ‘favela tour’. Favelas are slums located on the the outskirts of cities in Brazil. Rio has a much higher proportion of them compared with other cities in Brazil owing both to the layout of the city and the extreme inequalities of wealth. Even the richest neighbourhoods in Rio seem to be just a stone’s throw away from one. I think the popularity of such tours is down to the belief that backpackers think they are doing something ‘edgy’ and ‘non-touristy’. Yet the irony is, considering the relatively recent popularity of such tours, they are anything but. It may be considered ‘anti-tourism’ on the surface and such activities do conform to Kalder’s resolution; ‘The anti-tourist does not visit places that are in any way desirable’. There is nothing desirable about these favelas. Yet neither is it clever or cool to visit such places which are downright dangerous. Also most of the people that go on such tours do so to brag and get a so-called one-upmanship over other travellers. The anti-tourist would never brag or boast about such things. Furthermore, there’s no danger during these tours since you are always accompanied with protection just in case anything does flare up. My Brazilian friend Carlos finds it comical that such tours exist; ‘Why would any tourist want to pay to visit a favela? Anyone who lives in a favela wants to pay to get out!’
There are other tours with anti-tourist themes. They could be ‘street tours’, tours to visit abandoned buildings or tours to visit derelict and defunct places destroyed by war. When I visited Bosnia a few years ago I went on a tour in the capital, Sarajevo. The city was under siege for three years from 1992-95. It was a fascinating tour and I dont regret doing it. Our guide lived through this terrible period and almost died at one point during the conflict. It would be pathetic and poor form of me to categorise it as a tourist or anti-tourist experience. I don’t wish to plunge to such low depths.
I guess the bottom line is that the anti-tourist does not purposefully try to be an anti-tourist. The anti-tourist is not aware that they are an anti-tourist. It is almost like a hardwired way of life with no underlying agenda or anything to prove. We seldom ever hear about such people, because they have no desire for notoriety. They prefer to remain invisible and anonymous.
Calling oneself an ‘anti-tourist’ is missing the point completely.