Good Reading -- January 2022
A selection of great books, articles, and essays
Facts & Figures
“Around 39 million options contacts have changed hands on an average day [in 2021], up 35% from  and the highest level ever.” Source: Options Clearing Corp as of the end of Nov. 2021
“Among Americans who have been [Amazon] Prime members for at least two years, nearly 98 percent of them keep renewing.”
The common stock of AMC was valued at roughly $475 million entering 2021, hit a peak north of $27 billion within six months, and had more of its shares traded during the year than those of Apple, the second-most active company. Apple is currently the world’s most valuable company and had a market capitalization that was, at various points, 100x to 6,000x higher than AMC’s. Apple also had a share count that was more than 30x larger than AMC’s, but AMC’s shares traded hands more than 55 times each during 2021 compared to 1.4 times each for Apple’s shares.
The 2021 market for options on Tesla common stock was more than 60 times as active as the entire FTSE 100 options market and helped push U.S. option trading volumes higher than actual stock trading volumes. On several days during 2021 the volume in Tesla options was five to six times greater than the rest of the options on S&P 500 companies combined. Sources: WSJ, Bloomberg, and the FT (https://on.ft.com/3JKRYq0)
The Revolution That Wasn’t: Gamestop, Reddit, and the Fleecing of Small Investors — Spencer Jakab is the editor of the “Heard on the Street” column at the WSJ, and he’s written an excellent book. We will be looking back on this episode in awe for a long, long time. (The next time someone asks for an explanation of how/what/why something crazy happened in financial markets I’m probably going to hand over a copy of this book.)
The Demon-Haunted World: Science as a Candle in the Dark — Here’s a good antidote for much of what ails us today. Now almost 25 years ago, this book is aging exceptionally well, and I wish I had read it many years ago.
This is How They Tell Me the World Ends: The Cyberweapons Arms Race — If you need a cheerful book to start the year, look elsewhere. This book did win some awards last year, and it’s compelling (if terrifying). I would need to read it closely at least once or twice more to begin to grasp everything.
Lou Simpson obituary, Chicago Tribune — We lost a titan. Simpson was a hall-of-fame investor, businessperson, director and governance expert, and philanthropist. He will be missed.
How Much Should You Lie? — This is a thought-provoking essay, and one that is perhaps more relevant today than ever.
A Very American Question About Elizabeth Holmes and the Price of Success — And on the topic of lying, I highly recommend this thought-provoking essay by Bethany McLean. “A jury’s verdict is black-and-white, but the real story is rarely so simple. We think of visionaries and fraudsters as polar opposites. In reality, just like Newton, many of today’s great entrepreneurs have some characteristics of both. It’s a very American question about the price of success: What degree of dishonesty is acceptable, especially if the dishonesty is the result of a certain amount of self-delusion? As a society, we’re willing to tolerate this — to a point. Whether it’s technology companies making promises about products that don’t quite exist in their promised form to seduce customers or investors, or Elon Musk touting Tesla’s ‘full self-driving’ cars that do not actually drive themselves, the line between the visionary and the fraudster can be less a bright slash than it is a blur of dots.”
Could Being Cold Actually Be Good for You? — A timely article. “Before industrialization…‘[temperature] extremes were actually part of life.’ Bodies dealt with cold in the winter and heat in the summer. ‘You kept on going back and forth, and back and forth. And this probably contributed to metabolic health.’ Researchers know that your body reacts when it’s cold…but what all this means for modern human health—and whether we can harness the effects of cold to improve it—are still open questions. One vein of research is trying to understand how cold-induced changes in fat or muscle can help stave off metabolic disease, such as diabetes. Another suggests it’s easier than you might think to get comfortable in the cold—without blasting the heat.”
Scientists are Racing to Understand the Fury of Tonga’s Volcano — A recap of the jaw-dropping eruption near Tonga that produced what is believed to be the loudest eruption since Krakatau in 1883, audible 5,000-6,000 miles away in Alaska. “Volcanologists couldn’t believe what they were witnessing. No matter which metric you picked, this was an astonishing, terrible eruption…The two once-conjoined but now segregated islands of Hunga Tonga and Hunga Ha'apai are the small surface expression of a far larger, 12-mile-long cauldron-shaped volcano (known as a caldera) beneath the waves. [I]ts magma reservoir takes many centuries to refill, and last weekend’s major paroxysm takes place roughly once a millennium, the result of the violent and sudden emptying of most of that cache of molten rock... [Scientists] used multiple satellites to visually calculate [the resulting ash plume’s] height. And after marking the plume’s canopy at 22 miles, with a central spike at 34 miles—a spike reaching an even higher atmospheric layer, the mesosphere—Proud only had one way to describe it: ‘It’s totally nuts,’ he says. The erupted ash…must have been going up close to the speed of sound in order to get that high.”