SI379: The Illusion of Safety in a Fully Invested Market ft. Cem Karsan
Top Traders Unplugged
Quantifying positioning and reflexivity
Cem explains why measuring positioning and reflexive flows is crucial for anticipating regime shifts.
Niels and Cem reflect on a year marked by concentration, confidence, and growing structural fragility beneath calm markets. They examine extreme positioning, record low cash levels, and the quiet dominance of reflexive flows over fundamentals. Cem challenges common readings of volatility, explains where real fear hides in options markets, and outlines why tail exposure becomes critical late in cycles. The discussion broadens into portfolio construction, questioning the legacy of 60/40 investing and the illusion of diversification built during falling-rate decades. Grounded in history, market structure, and political cycles, this conversation offers a disciplined framework for navigating regimes where leverage, policy, and inequality quietly redefine risk.
-----
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.
Episode TimeStamps:
00:00 - Introduction to the Systematic Investor Series
00:49 - Geopolitical tensions beneath the surface of markets
02:07 - Extreme bullish sentiment and record low cash levels
04:12 - Margin use, positioning, and why this setup is fragile
06:07 - Why the VIX fails as a true fear indicator
11:48 - Buffett’s concentration and risk management through quality
16:27 - Leverage, Sharpe ratios, and misunderstood diversification
21:02 - Trend following performance and late year positioning
23:48 - Positioning, reflexivity, and market microstructure
28:25 - Volatility traps and convexity before stress events
31:06 - Asymmetric opportunities in gold, FX, and bond volatility
37:17 - Populism, inequality, and long cycle market behavior
45:31 - Why 60/40 is a product of a falling rate era
54:47 - Key lessons from 2025 and structural market shifts
01:07:32 - Political cycles, midterms, and forward looking risks
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
The AI-powered Podcast Player
