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Jean-Philippe Bouchaud

lines on the record: 62
first: 2026-04-17
most recent: 2026-04-17
sittings or episodes: 1
sources: podcast

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“Yeah, I mean, most, maybe even all our researchers have a PhD. It doesn't mean that we're an academic lab. We're really working on concrete stuff. We're really there to make models that work, build portfolios that are robust, model risk, model execution, control costs, all these things are bread and butter for everyday work. But at the same time, we feel that when we find something that is beyond the kind of daily work and that can be published because it brings something to the academic debate or to the public debate, how do markets work? Why are there crashes? Are markets efficient? What about the economy? Do people understand inflation? Do we need new theories to understand inflation, monetary policy, and all these things? We believe it's our role. Also because we have access to”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of the success of CFM has been attracting talents, and I think part of that, only part of that, of course, it's a teamwork, is due to the fact that I'm still very connected in academic circles and young students, they've listened to me, giving talks, lecturing, they've read my papers, and so they feel let's go and work for that firm because it seems that they're really doing cool stuff.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, first of all, it is me. I feel I'm a researcher at heart and I need to continue. It's like people running the marathon. They are doing something else in life and then there's an urge to run the marathon. For me, there's an urge to understand what I'm doing and understand also things that I'm not doing even now. Even physics problems I can get excited about them or trying new things like the ML revolution. How does ML work? Do large language models work so well, learn so well. I think it's fascinating. I want to understand. But there's another reason for doing this, is that to attract talent, you need to identify them, you need to attract them, you need to be that professor at one point.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, that was exactly Jean-Pierre Aguilar's idea. He said, okay, I'm doing trend following, it's good, but it's not rocket science. Maybe we can do much better. And so he said, why don't we work on something more beefy than just trend following? And so that started the whole thing. And the idea of the main idea is data. Physicists are good at looking at data and extracting structures. Looking at data and imagining that from that data you can build theories, you can identify what's important and what's not. And that's, I think, the way it all works in physics, that you scrutinize data and then there's a flash and you think, okay, I can model that. And it's really the same process in finance, at least as far as we were concerned and we are concerned now. It hasn't changed. It's the same process.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“There was a fluid that was flowing between us immediately. And so CFM then merged with science and finance in 1990, so it's now the same firm. But the idea he had at the time, he had this small CTA trading firm, and he thought, I need to beef up my research team. And this guy seems to be interesting. So we just partnered. And that's how it all started.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“And so it looked to me interesting, and I thought okay, maybe we can do software out of that and commercialize it. And so I went and knocked on several doors. And suddenly the door of Jean-Pierre Aguilar opened. And Jean-Pierre Aguilar was someone who had founded actually CFM in 1991. That was 1994. And I started explaining what I had been doing and that I was interested in transferring ideas from physics to finance. And he said, why don't we create something together? And so at the time we created a company called Science and Finance. And this was done, you know, in...”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“And someone who was working in the banking industry called me and said, hey, it's really interesting because it resembles what happens in finance. And in particular, what just happened, the 1987 crash. And there's this theory, the black shoal theory, that is a theory that only works in a world where there are no crashes, where all the motions are small and they're random, but they're kind of predictable even if they're random in some strange way. And I thought this is really weird. And this guy said, why don't you try to generalize black shawls to a world where there are crashes? And I thought, well, that's really interesting. So I read blackshaws and I thought it can't be right. They must be wrong, these guys. So I kind of redid everything myself and found something that looked more interesting than blackshaws because it could be extended to non Gaussian statistics, as they're called.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so as I said, initially I've always been excited by data and trying to make sense of data. So there was something there anyway. But what really drove the transition was in a sense the 1987 crash and the Blackshaw theory. So I didn't know anything about that. And then I wrote a paper on what I was working on, which physics systems with large jumps, if you want large crashes that happened from time to time.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's the traditional way economists think about markets. They are kind of buffeted by things you can't predict because they come from outside. And then I think the physics hunch is that, hey, but there can be self-generated shocks, self-generated randomness that come from large assemblies of individuals, i. e. traders, agents that trade and buy and sell to each other. And this can generate intrinsic randomness that is not of the same kind as the three-body problem, but really comes from the interaction of a huge number of elements.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, there are two ways to be unpredictable. One is that the system is by itself unpredictable, that even with deterministic laws like the three-body problem, you can't say much after a few seconds, days, or weeks. But there are other kinds of unpredictability where there's a true source of exogenous noise that hits the system and you can't say anything.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. Yeah, but it's all. The problem is how to interacting elements give rise to something surprising. Granular matter is grains that interact with one another and then you have these strange phenomena called avalanches where you drop a grain on the slope and most of the time nothing happens but sometimes there's a big landslide that takes all the grains down. And so this again is very reminiscent of financial markets, right? I mean many things happen nothing much follows and then sometimes there's a crash. And so this was really intriguing for physicists like me.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I was planning to be a physicist, but then studying statistical physics, and we can go into that later if you wish, I realized that physics can offer much more than studying physics. And then I was always fascinating by numbers. I've always liked statistics and financial markets spit statistics every day and I thought, you know, this is a very interesting, complex system. There are crisis crashes, jumps. This system seems to be driven by its own dynamics. Physicists have to do something about this.”
2026-04-17 · Masters in Business · The Intersection of Science and Finance with CFM's Jean-Philippe Bouchaud · IDENTIFIED FROM THE TRANSCRIPT · source