What We’re Reading (Week Ending 05 April 2026) - 05 Apr 2026
Reading helps us learn about the world and it is a really important aspect of investing. The late Charlie Munger even went so far as to say that “I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading.” We (the co-founders of Compounder Fund) read widely across a range of topics, including investing, business, technology, and the world in general. We want to regularly share the best articles we’ve come across recently. Here they are (for the week ending 05 April 2026):
1. Energy’s Moment – Abdullah Al-Rezwan
I had this naive assumption that since the US has now become a net oil exporter and China remains heavily dependent on imported oil, any oil shock would be net negative for China far more than it would affect the US.
So, it was surprising for me when I noticed that China was actually ahead of the US in terms of “total insulation factor” when it comes to global oil & gas shocks. The “total insulation factor” indicates the share of a country’s useful final energy that is less exposed to global oil and gas shocks. JPM calculated it by adding together a country’s reliance on four specific energy sources: domestically produced gas, domestically produced coal, nuclear power, renewables (such as biofuel, hydro, wind, solar, and biomass). China has a total insulation factor of 76%, while the US has a total insulation factor of 70%. China scores higher primarily because of its massive reliance on domestic coal (54% of useful final energy), which accounts for a larger share of its energy mix than the US’s primary domestic buffer: natural gas (44.5% of useful final energy).
Even though China is the world’s largest oil importer nation, oil imports make up 13% of China’s primary energy consumption. When you combine all oil consumption and imported gas, it only accounts for 20% of China’s primary energy.
2. A Sinister Raise, a Bitter Press Release, and Five Other Weird SEC Filings – Andrew Walker
EMPD is a digital treasury company focused on Bitcoin. Like most digital treasury companies, they’ve traded for a discount to NAV basically this entire year; for most of the past month, they’ve been trading around 80-90% of NAV (you can see a real time NAV calc here).
Towards the end of March, the company announced a $25m equity raise. The raise was priced at a premium to both NAV (it priced at 103% of NAV) and the market price (again, the company trades for <90% of NAV); on top of that premium raise, the company noted they’d continued to buy back stock at a discount to NAV. Read that sentence again: a company trading at a discount is buying back shares and somehow raising capital at a premium to NAV? Nirvana for shareholders, right!?!?!
Au contraire, mon frère!
EMPD didn’t just issue stock in the equity raise; for every share they issued, they gave the buyer a four year warrant struck at $6.27/share (~20% above NAV). Those warrants have enormous value; BTC currently trades with ~50 vol. EMPD is a levered BTC treasury company, so it should have even more volatility than BTC (EMPD’s option chain is extremely thin but points to volatility well over 100). ChatGPT tells me that a four year warrant that’s 40% out of the money with 100 vol is worth ~65% of the spot price…. for EMPD, that means each warrant was worth ~$2.90/share. So, yes, the headline number EMPD raised at was $5.39/share, but if you adjust for the value of the warrant EMPD raised money at an effective price of ~$2.50/share while the stock was trading at ~$4.50/share. An absolutely awful trade.
Why would EMPD raise money like this? Well, I’m not in the board room, so I can’t tell you with absolutely certainty…. but I’d suggest it’s likely a board entrenchment maneuver. EMPD is currently in a rarely seen double proxy fight where two separate shareholder groups3 are trying to replace the board with a more shareholder friendly group4. EMPD’s press release announcing the raise notes the raise was bought by a “current institutional investor” in EMPD; my guess is EMPD went to a big shareholder and said “hey, agree to keep the current board in place, and we’ll give you a big slug of stock to vote and toss in a ton of warrants to make the whole thing worth your while.” …
…Today, BNTX has just shy of $20B in net cash, and while the COVID franchise is obviously dwindling the company has a ton of promising other drugs / readouts coming over the next few years….
Perhaps those readouts work, perhaps they don’t. I have no idea! But it’s a pretty promising set up…. which is why it’s so wild that BNTX announced that their co-Founders / top executives were leaving BNTX to start a “next-generation mRNA innovations” company. What’s even crazier is that BNTX will be contributing their mRNA assets to the new company!
Why is this so crazy? It’s absolutely ripe for conflicts of interest! BNTX could have spun out the mRNA assets to all their shareholders and put their founders / exec team in control of the new company. That would have been a fair and equitable way to do a start up. Instead, it seems BNTX will contribute the mRNA assets to the new company in exchange for a piece of that company. How are the mRNA assets going to get valued in that transaction? Given the founders / CEOs are going to the new company, it’s not hard to see how they might want to give the new company a boost by paying BNTX far under market value for the mRNA assets.
3. 2023 – Dean W. Ball
Intelligence is a tremendously useful capability, but it is not the bottleneck on all human progress, and, crucially, an extreme amount of intelligence does not equate to omniscience. Intelligence is not knowledge. Aristotle was surely more intelligent than I am, but he was not more knowledgeable, including even about many of the topics to which he devoted his treatises. This is why I am confident I would score better on a standardized test in biology or physics than Aristotle, despite him being one of the West’s originators of those fields of inquiry.
In a similar vein, imagine a newborn baby that was guaranteed to grow into an adult with an astoundingly high IQ (say, an IQ of 300, or 500, or 1000), but raised by Aristotle in Ancient Greece. Do you expect that the baby would mature into an adult that invents all modern science within the span of a few years or decades? Eliezer Yudkowsky does. Indeed, he describes contemporary humans trying to grapple with superintelligent AI as equivalent to “the 11th century trying to fight the 21st century.” I, on the other hand, strongly doubt that our imaginary high-IQ baby would invent all modern science from first principles. First principles do not have unbounded explanatory power.
In the end, most interesting things about the universe cannot be inferred from first principles. Imagine, for example, that you came upon a dry planet with mountain ranges but no bodies of water. But imagine that you knew, magically, that the planet would soon gain an atmosphere and thus precipitation, seasons, and the like. Suppose you have a superintelligent AI with you, and you show it the map of the planet as it is, and ask it to predict where all the planet’s rivers, lakes, and oceans will lie 50 years hence, after the planet gains regular precipitation. You don’t ask it to predict “generally speaking, where the bodies of water might end up,” but instead to predict exactly where they will be.
I would submit that there is no computational process which can arrive at the end of this natural process faster than nature itself. In other words, there is no pattern or abstraction you can create that allows you to speed ahead to the end of the process, and thus there is no amount of intelligence that gets you to the correct solution faster than nature on its own. You just have to wait the 50 years to find out. This is what the scientist Stephen Wolfram describes as “computational irreducibility.” Understanding this notion deeply is key, I think, to understanding the limits of intelligence. It should therefore come as no surprise that the best debate I’ve ever heard about AI existential risk was between Wolfram and Eliezer Yudkowsky.
Computational irreducibility comes into play anytime you are interacting with a complex system (though this is not to say that computational irreducibility is intrinsic to all interactions with a complex system). Every natural ecosystem, cell, animal, and economy is a complex system. While we have all manner of methods to predict what will happen when a complex system is perturbed (we call these things “physics,” “biology,” “chemistry,” “economics,” and the like), none of those methods is perfect, and often they are far from it.
The way we build better models of the world does not usually resemble “thinking about the problem really hard.” Generally it involves testing ideas and seeing if they work in the real world. In science these are generally called “experiments,” and in business sometimes we call these “startups.” Both take time and often money (sometimes considerable amounts of both); in the limit, neither of these things can be abstracted away with intelligence, no matter how much of it you have on tap. This is the central reason that I have written so much about, and even written into public policy, automated scientific labs that could run thousands of experiments in parallel; AI will increase the number of good predictions, but these are worth little without the ability to verify those predictions with experiments at massive scale.
There is one further observation that follows from the disentanglement of knowledge and intelligence. This is that knowledge itself is distributed throughout the world in highly uneven and imperfect ways. Anyone who thinks that “all the world’s knowledge” is on the internet is deeply mistaken. There is information that exists within a firm like Taiwan Semiconductor Manufacturing Corporation that is, first of all, not only unavailable on the internet but literally against Taiwanese law to make public. Even more importantly, though, there is knowledge within that firm that cannot be written down and is only held collectively. No single employee knows it all; it is the network—the meta-organism of TSMC itself—that holds this knowledge. It cannot be replicated so easily. This is all merely a restatement of the knowledge problem most memorably elucidated by the economist Friedrich Hayek.
The implicit, and sometimes even explicit, argument of “the doomers” is that intelligence is the sole bottleneck on capability (because any other bottlenecks can be resolved with more intelligence), and that everything else follows instantly once that bottleneck is removed. I believe this is just flatly untrue, and thus I doubt many “AI doom” scenarios. Intelligence is neither omniscience nor omnipotence.
What all of this means is that I am doubtful about the ability of an AI system—no matter how smart—to eradicate or enslave humanity in the ways imagined by the doomers. Note that this is not a claim about alignment or any other technical safeguard, even if a “misaligned” AI system wanted to take over the world and had no developer- or government-imposed, AI-specific safeguards to hinder it, I contend it would still fail. “Taking over the world” involves too many steps that require capital, interfacing with hard-to-predict complex systems (yes, hard to predict even for a superintelligence), ascertaining esoteric and deliberately hidden knowledge (knowledge that cannot be deduced from first principles), and running into too many other systems and procedures with in-built human oversight. It is not any one of these things, but the combination of them, that gives me high confidence that AI existential risk is highly unlikely and thus not worth extreme policy mitigations such as bans on AI development enforced by threats to bomb civilian infrastructure like data centers. “If anyone builds it, everyone dies” is false.
4. Beware of Simple Narratives – Alfred Lin
Consider a few narratives that shaped and misshaped technology investing:
- Winner takes all. In some markets, such as search and social networking, this proved largely correct, but enterprise software proved stubbornly multi-vendor. E-commerce never consolidated the way the narrative predicted. Even in cloud infrastructure, the oligopoly of AWS, Azure, and GCP defied the single-winner thesis. The narrative was a useful heuristic. Founders and investors who treated it as a law made expensive mistakes.
- First mover advantage. Google was not the first search engine. Facebook was not the first social network. The iPhone was not the first smartphone. The company that finds product-market fit in the right window wins. But “timing and execution matter more than sequence” is a harder story to tell than “be first.”
- AI will replace [x]. Today’s dominant narrative is directionally correct but operationally misleading. The simple version, that AI replaces humans in a neat, linear substitution, misses the more investable reality. Augmentation, new workflows, and entirely new categories of work tend to emerge alongside displacement. The companies building for the nuanced version of this future look very different from those building for the simple version…
…In 1997, I declared that Amazon would kill Walmart. Today, Walmart is 30 times larger than it was 30 years ago. With each quarter of declining mall traffic and each confirmed brick-and-mortar bankruptcy, the thesis held true. This was confirmation bias at work. The world was messier than the story. E-commerce companies also failed. Customer acquisition costs online kept rising. Certain categories had persistent try-before-you-buy dynamics. Physical presence created brand equity that digital alone could not. Those who treated the simple narrative as a settled truth missed the omnichannel reality that ultimately prevailed.
5. Javier Blas on Why Oil Could Go Much, Much Higher (Transcript here) – Tracy Alloway, Joe Weisenthal, and Javier Blas
Javier: You are absolutely right that what is really cushioning the market right now is a number of buffers that we are going through. One is regular inventories that every country, every refinery has to normal functioning. Then is also the strategic inventories that some countries own, particularly industrialized countries like the United States, Europe, Japan, and also China. Those have been mobilized, in most places have been released. And also we entered the crisis with a market that was over-supplied. There was even floating storage – that is when an oil tanker has been loaded, it’s on the high seas but it cannot find a buyer and just basically sits on the high seas looking for someone who will take the oil. We have quite a lot of that just going into the crisis. So there was quite an element of buffer through the system and probably a larger buffer than in normal circumstances because the market was over-supplied. That is helping to cushion or to mitigate the crisis.
Where we are seeing some actions by government is where countries are closer to the crisis, which is the Strait of Hormuz. So the closer that you are to that location, the more action you need to take because you typically depend more of that flow of oil coming from the Middle East and also because you are impacted earlier. If you are moving oil from say Saudi Arabia into India, that’s only a few days, at most a week, of sailing time. If you are moving that to say the Philippines, that’s about 15 days. It’s longer if you are moving that oil into Europe, probably around three weeks. And it’s even longer if you are moving that oil into say the United States where Saudi oil takes about 40 days. All of that means that the crisis is felt in some places quicker than in other places.
Also is how the global oil market works. And to put it in quite simple terms, I’m afraid that I have to go with colonial vocabulary. The oil market is divided in two large chunks. East of Suez and west of Suez. This is like the British Empire was still around and everything was east or west of the Suez Canal. Countries that are east of Suez, mostly Asia, rely a lot on Middle East oil these days and therefore they are impacted earlier on by the crisis. West of Suez, Europe, Western Europe, and the whole American continent, is a bit detached from that market and therefore the crisis will hit them much later…
…Javier: But if I may suggest, forget about the price of a barrel of oil. No one cares about the price of oil unless you are someone producing oil in Texas or Saudi Arabia, or you are someone who owns a refinery. Those are the people that care about the price of a barrel of crude. The rest of us, you and I, we care about the price of a refined product because that’s what we consume. We consume gasoline, we consume diesel, or we consume other refined products that they embed into a service that we are buying. Think about an airfare ticket, where inside that ticket there’s a big proportion of it that is jet fuel, or you are buying a cup made of plastic. You are buying effectively some kind of transformed naphtha and obviously the transformation and the retail margin and so on, but what matters really is the price of refined products, and there actually we are beginning to see, particularly in the Southeast Asian markets, some very extreme prices.
If you look at the price of crude or Brent or WTI or Oman, things look relatively contained. We are trading around $110 a barrel, that is well below the all-time high. If you look at the cost of diesel in Singapore, which is a benchmark for the Southeast Asian market, the price there is approaching $200 a barrel, which is something that we have never seen. The refined product is where really we are seeing the real tension.
Tracy: This is exactly what I wanted to ask you. If you look at the benchmark prices for crude oil, we’ve seen higher prices before, and relatively recently in 2022. But if you look at the refined products, we’re getting to places that we haven’t seen. What explains that disconnect? Back in 2022, why didn’t we see the higher cost of crude feed into refined products the way that we seem to be seeing now?
Javier: For two reasons. One is because we have lost not only a lot of crude oil production, but we have lost a significant chunk of refined production. The Middle East also has a lot of refineries which are export refineries. They are just devoted to the export market and the global trade of refined products is a lot smaller than the global trade of crude oil. So even a small reduction in supply could have a much larger impact. You think about the global market for crude oil which is 100 million barrels, around 60 million are traded globally. But if you look at the market for say jet fuel, that market is a lot smaller and we have lost a significant proportion of the refineries who are serving that international market for jet fuel and therefore prices are reacting much more stronger than we saw in previous crises.
There’s also the way that the world of refining works. Some refineries are slowing down intake of crude oil because there is not enough crude oil in the market but we have not really seen yet the consumers reacting the same way. So what is happening is the refining world is acting as a buffer between crude oil that is not there, and consumers that have not yet realized that the crude oil is not there. The refined market is trying to basically get those two together. The way that it can only do it is by extreme pricing and indicating to the consumers, “I don’t have enough crude to make these refined products, so please can you stop demanding the refined products?” The please is basically $200 a barrel diesel…
…Tracy: What’s going on with US natural gas? If you look there – we’re talking about muted market moves in the oil market, even though those have risen – if you look at nat gas, nat gas has actually come down.
Javier: Nat gas in the United States is trading almost at a six-month low, which considering what is happening in the global energy market, is almost incredible. The reason there is US shale. And the reason is that you cannot export gas easily. For exporting gas, you first need to cool it down, liquefy. That basically means having an enormous fridge that cools gas from room temperature to -160 celsius, then it liquefies and then you can put it on a tanker and send it to the rest of the market. Because we have limited liquefaction capacity, and it does increase quite quickly, that creates a bottleneck. That means that the US and Canadian gas is effectively trapped inside North America and that’s keeping prices completely detached from the global market. That is a huge difference from previous episodes of high energy prices. Even in 2022, the price of US natural gas went from around $3.50-$4 to almost $10 per British Thermal Unit. This time it’s staying at actually below $3 per MBTU.
That is incredible because it means that the heavy US industry, electricity generators, chemical companies, fertilizer companies, there is no crisis while everyone else in the world is suffering. The US is completely insulated…
…Javier: 2022 was a huge shock to the global food market because it affected a bread basket region of the world. If you look at Russia and Ukraine, at the time combined, they accounted for around a quarter of global exports of wheat and barley, around 15% of global exports of corn, and even much higher percentage for some vegetable oil like rapeseed and sunflower. The Russian invasion of Ukraine, the battleground was some of the richest fertile farmland in the planet. The battleground of the crisis in the Middle East is deserts and a piece of sea that we call the Strait of Hormuz. It doesn’t have the same impact in terms of global supply.
It does have an impact on fertilizer prices. It did also, the 2022 war between Russia and Ukraine which is still ongoing. But fertilizer prices require time to have an impact on food production. Also, while yes the numbers are very scary and you look at the global fertilizer market, just focusing on urea, you look at that market and say, “Oh boy it’s going up a lot, we are approaching the 2022 record high.” But that is a problem in many markets, it’s a problem that is not a food problem. It will be a fiscal problem and the reason is that urea fertilizer in particular is massively subsidized in the developing world, particularly in places like India and Pakistan. So the problem there is going to be for the Indian government – can it afford to spend billions of dollars extra subsidizing fertilizer? Less so is it going to be a food crisis in India because the fertilizer I think is going to be there. You are the finance minister in India, you have a big problem there. That’s how I’m seeing the problem.
Also the global food market is in a better position than almost anytime in the last two or three decades. Inventories of wheat are very high. Inventories of rice in particular at an all-time high. You mentioned rice, while we are worried about fertilizer prices, etc., etc., if you look at the most important benchmark for rice prices in Asia, it is about to hit at 19-year low…
…Javier: Oh boy, if we we didn’t have enough with the Middle East, here is Ukraine. You cannot blame Ukraine, it is fighting for survival. They are hitting Russia as hard as they can, wherever they can. And that means hitting their oil terminals. In the past, they were hitting the terminals in the south of the country. That’s the Black Sea. But they have found a corridor to send long-distance drones into the north, into the Baltic. I think the Russians were caught completely offguard. They didn’t think that Ukraine will be able to hit the terminals in the far north of Russian territory. So they were not very well protected, or you say Ukrainians were extremely good at it. But the terminals have been damaged significantly. We don’t know for sure the extent of the damage, but looking at the satellite pictures, it looks bad enough. So we may be also losing potentially 1 million barrels a day of Russian oil. Again you cannot blame Ukraine, but it’s not really the time when you want to be losing more oil…
…Tracy: Okay, one thing that people have talked about for I’m pretty sure the duration of all of our careers, are attempts to move away from pricing oil in dollars. If you think about the current situation, there’s something very perverse about seeing the dollar go up because there’s a scramble for barrels of oil because of an action taken by the United States. From your context in the oil market, is anyone talking about actual currency pricing for barrels at the moment? Is this something that is going to get renewed traction?
Javier: No, I don’t hear anyone. Certainly Iran may be happy to take other currencies. It has been relatively happy to take Chinese yuan, and also other currencies which has problems on convertibility. Everyone else will still want the dollar. The way that it was put to me by a leading producing country in the Middle East, and I was talking to the head of the central bank, I’m going to not name the country. But they said to me, “If I switch from the dollar to say the yuan, I move from a relatively high interest rate, to a low interest rate. I move from full convertibility to a lot of problems to convert. And I move from maximum liquidity to no liquidity whatsoever.” And then this central bank governor is like, “Why I would like to do that? Why I would like to really take a step back on my currency?” I think that the yuan is not there yet for oil producers. Everyone that is using other currencies than the dollar to price their oil or to invoice their oil, they are doing it because they are under American sanctions. They’re not doing it because they want to do it. They’re doing it because they have no other option than to do it. Just because they are on the naughty corner of the US Treasury.
Disclaimer: None of the information or analysis presented is intended to form the basis for any offer or recommendation. We currently have a vested interest in Alphabet (parent of GCP), Amazon (parent of AWS), Microsoft (parent of Azure), and TSMC. Holdings are subject to change at any time.
