VOL07: Participate & Protect ft. Dave Dredge
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 712 Ratings
🗓️ 12 January 2022
⏱️ 67 minutes
🧾️ Download transcript
Summary
Hari Krishnan is joined today by Dave Dredge, to discuss how long-volatility strategies can improve on the traditional 60/40 portfolio, the concept of ‘participate and protect’, the importance of understanding why compounding is the ultimate goal, the ‘always good weather’ portfolio, trading Bitcoin volatility, being a ‘value buyer’ of volatility, mechanisms for taking profits, and how to size portfolio allocations properly.
-----
50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
In this episode, we discuss:
- How to improve on the traditional 60/40 portfolio
- Dave’s concept of ‘participate and protect’
- The importance of compounding
- Dave’s ‘always good weather’ portfolio
- Long-volatility Bitcoin strategies
- Value investing in the volatility space
- Methods for taking profits
- Sizing portfolio allocations
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 Hari on Twitter.
Follow Dave on LinkedIn.
-----
Episode TimeStamps:
00:00 - Intro
02:01 - How did you end up in the long-volatility sector?
04:55 - How options used to be considered as a redundant trading method
07:53 - Do you have any idea why the Bitcoin skew is so high and flat?
08:56 - What does it mean when you say you consider yourself a value-buyer of volatility?
10:15 - Do you have any notion how to mix the various positions you warehouse?
15:46 - How do you source good ideas, and has living in Singapore given you an edge for this?
27:12 - Can you talk about the Taliban’s use of the ‘Sandpile Theory’?
33:13 - Are there more opportunities for you globally now, then there used to be?
40:51 - What are your mechanisms for taking profits?
47:19 - What’s your view on paying for convexity in your positions?
51:13 - Do you engage in skew trades?
52:41 - How do you think about low-vol?
55:49 - How do you size allocations to your long-vol strategy?
01:01:49 - Closing thoughts from Dave?
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 | So as a simple example, we run all the time for people, take your 60-40 model, take the amount of |
| 0:14.3 | capital allocated to the 40 in fixed income, split that 50-50 between long-vall and more equity. |
| 0:21.6 | So you're now 80-20, 80 equities 20 long-val. |
| 0:26.6 | And that looks better than 60-40, less risk, more return. |
| 0:31.6 | And then because of the capital efficiency of the way people run long-vall strategies, everybody's able to run that at 2x leverage through a 2x leverage sleeve of some form or run it off balance sheet with full leverage the way Massemer Mark Spitznkel does. |
| 0:50.3 | So two times lever that. Now you're 80, 40. |
| 0:53.3 | And you make more return and have less risk. |
| 0:59.3 | For me, the best part of my podcasting journey has been the opportunity to speak to a huge |
| 1:04.5 | range of extraordinary investors from all around the world. |
| 1:07.5 | In this series, I've invited one of them, who also happens to be a long-time |
| 1:11.5 | friend, namely Harry Kristlin, to host a series of in-depth conversation on the topics of volatility, |
| 1:17.9 | risk, and portfolio protection. In today's world, portfolio construction is fast moving to the |
| 1:23.5 | top of the agenda of many investors as they try to analyze and understand |
| 1:28.0 | the riskiness of their portfolio. |
| 1:30.5 | With ever increasing uncertainty around the globe, |
| 1:33.1 | knowing if you are essentially long or short volatility |
| 1:35.8 | in your portfolio can mean the difference |
| 1:38.0 | between ruin and survival when the next crisis emerge. |
| 1:42.4 | The aim of these conversations is to try and understand the experiences |
| 1:46.0 | that have influenced these highly specialized market participants |
| 1:50.0 | and the processes they follow to harness their returns |
| 1:53.0 | so that we can all become better informed investors. |
... |
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.