‘Guys far more experienced than me didn’t really know what risk was’

A flawed understanding of risk has made markets fragile, says Convex Strategies CIO David Dredge

Monday, October 5, 1987. David Dredge was just starting out in the treasury division at Bank of America in Singapore.

“My bosses told me how lucky I was – how Asia was the best place in the world to be a trader,” recalls Dredge, now chief investment officer at hedge fund Convex Strategies and a trader for more than 30 years. “Two weeks later, markets dropped by about 20 times what would be implied by the bank’s drawdown limit.”

“It dawned on me that guys far more experienced than me, that

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