Anti-Fiat Portfolio: Gold, Bitcoin and Convexity

Recorded live from the Cboe RMC floor in Munich, Cem Karsan sits down with volatility veteran David Dredge for a deep exploration of what truly drives risk. From the crash of 1987 to today’s era of correlation, Dredge reframes volatility not as fear, but freedom. Through his F1 “brakes” analogy, he reveals why protection enables performance, and how convexity builds resilience in an uncertain world. Together, they trace the arc from structured-product flows to demographics, fiscal repression, and the coming global “Hunger Games” for savings. A masterclass in compounding through uncertainty.

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Episode TimeStamps:

00:01:29 – Cem introduces David Dredge live from Munich.

00:03:28 – Dredge recalls arriving in Asia before the 1987 crash.

00:05:06 – The F1 brakes analogy—why protection enables speed.

00:07:45 – The “preserve and enhance” portfolio that defied 65/35.

00:10:57 – Rethinking 60/40 and the illusion of diversification.

00:14:33 – Cem on $500 trillion of correlated assets.

00:17:22 – Why covered calls lose to convexity over time.

00:19:14 – Misreading 2022: correlation, not equities, was the risk.

00:21:20 – When diversification fails, only convexity endures.

00:27:13 – Value investing in volatility—buying what others suppress.

00:37:48 – Euro FX vol: the paradox of cheap risk.

00:44:07 – Demographics and the quiet mathematics of decline.

00:47:46 – The “Hunger Games” for global savings begins.

00:52:57 – Lessons from 1997: FX and gold vol as survival trades.

00:56:11 – The anti-fiat portfolio—Bitcoin, gold, and long vol.

01:01:13 – Closing reflection on resilience as freedom.

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