GM 78: The Market Risk Nobody’s Watching ft. Dave Dredge & Cem Karsan
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 712 Ratings
🗓️ 22 January 2025
⏱️ 92 minutes
🧾️ Download transcript
Summary
Today, we take you into the complexities of the current financial landscape, emphasizing the crucial theme of positioning in an environment marked by rising interest rates and shifting market dynamics. We explore how recent structured product issuance is significantly impacting market structure, particularly in the U.S., where the volume of callable bonds and equity-linked products has surged. They highlight the risks associated with reliance on historical correlations, which may not hold in times of market stress, and the implications for investors navigating these turbulent waters. The conversation also touches on the potential for a significant monetary regime shift, akin to what was seen in the late '90s, driven by geopolitical tensions and domestic economic policies. You will gain valuable insights into how to recognize and adapt to these evolving risks, to become well prepared for the challenges ahead.
-----
50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
-----
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
Learn more about the Trend Barometer here.
Send your questions to info@toptradersunplugged.com
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
Follow Cem on Twitter.
Follow David on LinkedIn.
Read David's report here.
Episode TimeStamps:
01:34 - A quick catch up since last conversation
02:13 - Dredge's key takeaways from 2024
08:58 - When did things really start to move for Dredge?
15:41 - Cem's analysis of the recent global macro environment
22:51 - What has driven the S&P volatility?
24:44 - Positioning is all that matters
29:31 - "Correlation is a bitch"
33:31 - Portfolio Manager in legal trouble for following an ESG strategy
37:57 - The difference between credit and vol investors
42:07 - The good outcome is a recession
45:36 - All the things that you are not worried about is driving your performance
48:49 - The state of interest rates and FX trading
57:24 - Is the Fed losing its grip on the economy?
01:03:46 - The outlook of markets - where are we heading?
01:09:18 - Risk is on your balance sheet, not in the future
01:16:14 - Dredge's perspective on structural products issuance
01:27:22 - The recession might come sooner than we think
Copyright © 2025 – CMC AG – All Rights Reserved
----
PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:
1. eBooks that cover key topics that you need to know about
In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here
2. Daily Trend Barometer and Market Score
One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here
3. Other Resources that can help you
And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here
Transcript
Click on a timestamp to play from that location
| 0:00.0 | The good outcome is a recession, because then people will buy the bonds. |
| 0:11.0 | But if you keep trying to avoid the recession, and you cut interest rates too early, people won't |
| 0:16.7 | buy the bonds. |
| 0:17.5 | Because the guys who bought them all when the price was wrong bought them because |
| 0:22.2 | they were regulated to do so with an incentive to pay themselves for annual accrued income |
| 0:28.2 | while they destroyed capital generation for somebody else's money. And those guys are full. |
| 0:34.7 | They're full. They're not buying. |
| 0:38.0 | Imagine spending an hour with the world's greatest traders. |
| 0:41.9 | Imagine learning from their experiences, their successes, and their failures. |
| 0:46.3 | Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn from the best |
| 0:52.5 | hedge fund managers in the world so you can take your manager, due diligence, or investment career to the next level. |
| 0:59.0 | Before we begin today's conversation, remember to keep two things in mind. |
| 1:03.0 | All the discussion we'll have about investment performance is about the past, and past performance does not guarantee or even infer anything about future performance. |
| 1:11.7 | Also understand that there's a significant risk of financial loss with all investment strategies, |
| 1:16.0 | and you need to request and understand the specific risks from the investment manager about their product |
| 1:21.4 | before you make investment decisions. |
| 1:23.8 | Here's your host, veteran hedge fund manager, Niels Kostrup Larson. |
| 1:33.8 | Thanks so much for staying late in the office, which is always the case when you join |
| 1:38.2 | Jem and I for these wide-ranging conversations, and we very much look forward to discussing |
| 1:43.5 | what lies ahead of us in 2025. |
| 1:46.5 | How have you been since I saw you a few months ago in Singapore? |
| 1:49.4 | Great, busy, did a little bit of traveling right after I saw you, literally right after I saw |
... |
Please login to see the full transcript.
Disclaimer: The podcast and artwork embedded on this page are from Niels Kaastrup-Larsen, and are the property of its owner and not affiliated with or endorsed by Tapesearch.
Generated transcripts are the property of Niels Kaastrup-Larsen and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.
Copyright © Tapesearch 2026.