SI411: Why the Best Portfolios Are Built to Be Wrong ft. David Dredge & Richard Brennan

**SPEAKER_1** (0:01)
Welcome to Top Traders Unplugged. In markets, success doesn't come from predicting what happens next. It comes from being prepared for what you can't predict.
In each episode, we go deep with some of the world's most thoughtful minds in investing, economics and beyond, to understand how they think, how they prepare and how they decide, and the experiences that shaped how they see the world. No noise, no shortcuts, just real conversations to help you think better and invest with confidence.

**Niels Kaastrup-Larsen** (0:35)
Welcome or welcome back to this week's edition of the systematic investor series with Richard Brennan and I, Niels Kaastrup-Larsen, where each week we take the pulse of the global markets through the lens of a rules-based investor. This week we have a very special guest, namely the one and only Dave Dredge, who really needs no introduction, but who officially is the Chief Investment Officer at Convex Strategies in Singapore. Rich and Dave, it is really wonderful to have you both here this week.
Hope you're doing well. What's going on in your part of the world, so to speak? I'll let Dave go first since he's the...

**Dave Dredge** (1:10)
You know, it's summer in Singapore, which is just like any other time of the year in Singapore. So it's hot and humid and it rains a lot. But you know, business-wise, we're super busy. There's obviously a lot going on in the world.
And the need for effective, explicit, loss mitigation, effective, explicit, negatively correlating, explicit, true diversifying has never been higher. And so we're pretty busy and markets are active across all kinds of asset classes. And I got some presentations coming up. I'm down in Australia in a couple of weeks speaking at a conference down there. So you know, everything's going here as usual.

**Niels Kaastrup-Larsen** (1:50)
That's fantastic, Gustaf. How about you, Rich? How are you doing?

**Richard Brennan** (1:54)
It's a bit colder for me, Niels. So down in the Southern Hemisphere here, I'm not too far away from Dave in Singapore, but sufficiently south to know it's winter down here. So I noticed that Dave and I both got our merch on for Top Traders Unplugged. And the only one who's absent of that, Niels, is you. And I assume it's because it's the boiling summer heat up there and you can't afford to have anything over that top of yours.

**Niels Kaastrup-Larsen** (2:19)
Well, I mean, that is definitely one excuse. The other more truthful excuse is, I completely forgot it.
But there we are. I will have to improve my prep skills. That is for sure. It's great to have you here and it is really wonderful knowing what topics we're going to be talking about, which I appreciate both of you help put together. And I think really the audience is in for a treat this week. Now it is coming up to month end in July.
And my trend barometer yesterday finished at 45, which is pretty neutral, probably more or less in line with what we see in terms of the indices. And for those who listen on a regular basis, you'll notice that I skipped the What's Been On Your Radar, because we've got so much stuff to cover with Dave and Rich that I thought we would just simply go on to that a little bit quicker today. Now we're recording on Thursday. We've got one and a half days left of the month of July, so we'll see how it goes. But so far, the data looks like the following. And this is as of Tuesday evening. Beat Up 50, down 23 basis points, up 8.32% for the month. Oh, sorry, for the year.
SG CTA Index, down 79 basis points for the month, and up 8.5 for the year. SocGen Trend, down 75 basis points for the month, up 8.3% for the year. And the Short-Term Traders Index, that's struggling a bit more, down 1.71% in July, and up 3.34% so far this year. In the traditional world, MSCI world, is down 1.63%, and if we exclude US and Canada, which was suggested by Andrew, not the Andrew that comes on as a co-host, but another Andrew, that is down 26 basis points only for the month, and up 9.56% so far this year. The S&P US Aggregate Bond Index, down 91 basis points, so no relief on that, and it's flat for the year. And the S&P 500 Total Return, down 2.39% so far in July, up 7.58% so far this year. Before we dive into all the topics, just wanted to ask whether there was anything from the month of July, I mean, obviously there's been some activity, I think, to say the least, over in Taiwan, if I'm not mistaken, but anything else going on from your vantage point?