UGO08: The Coming Hunger Games for Global Savings ft. David Dredge

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Nov 19, 2025

David Dredge, a seasoned volatility strategist and author, joins to discuss how risk can be reframed as freedom. He shares his F1 brakes analogy, illustrating how protection boosts resilience in investing. Dredge critiques the traditional 60/40 portfolio, touting a 'preserve and enhance' approach for better long-term performance. He delves into the growing 'Hunger Games' dilemma for global savings amid fiscal repression and demographic shifts, arguing for convexity-focused strategies and the integration of gold and Bitcoin as protective assets.

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INSIGHT

Protection Enables Faster Compounding

David Dredge uses an F1 brakes analogy: protection (brakes) enables faster, safer exploration of upside.
Good protection changes the compounding path by letting you take more calculated risks over time.

ADVICE

Split Preservation And Enhancement 50/50

Allocate meaningful capital to preservation: Dredge suggests 25% gold and 25% long volatility for sovereign-like portfolios.
Use the remaining capital for high-convexity, growth-oriented bets like NASDAQ proxies.

INSIGHT

Don’t Forego Upside For Lower Volatility

Driving slowly to improve Sharpe often sacrifices upside and creates negative skew over time.
True risk management should reduce downside while preserving upside convexity for compounding.

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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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