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My guest today is Jean-Philippe Bouchaud, the Chairman of the multi-strategy quantitative hedge fund Capital Fund Management (5B+ AUM) and co-supervisor of the research team. He is a well known authority in the field of Econophysics, co-author of \u201cTheory of Financial Risks and Derivative Pricing\u201d, a Professor of \xc9cole Polytechnique where he teaches Complex Systems and has his Ph.D in theoretical physics from \xc9cole Normale Sup\xe9rieure.

The topic is Trend Following.

In this episode of Trend Following Radio we discuss:

• Bouchaud\u2019s physics background and how it collided with the world of classical economics
• The Black-Scholes model, and its still use; experimenting with simulation
• Bouchaud and his colleague\u2019s paper, \u201cTwo Centuries of Trend Following\u201c
• The efficient market hypothesis
• Why the existence of trends is one of the most statistically significant anomalies in financial markets
• How trends predate trend following
• Why classical economics has no framework through which to understand \u201cwild markets\u201d
• Benign randomness vs. wild randomness
• Accepting uncertainty
• Differences between physicists and economists

Jump in!

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I\u2019m MICHAEL COVEL, the host of TREND FOLLOWING RADIO, and I\u2019m proud to have delivered 10+ million podcast listens since 2012. Investments, economics, psychology, politics, decision-making, human behavior, entrepreneurship and trend following are all passionately explored and debated on my show.

To start? I\u2019d like to give you a great piece of advice you can use in your life and trading journey\u2026 cut your losses! You will find much more about that philosophy here: https://www.trendfollowing.com/trend/

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