TTU154: Why Trend Following Isn't Crash Insurance ft. Philippe Jordan

What if one of the biggest misconceptions about trend following is what investors expect it to do? Niels Kaastrup-Larsen and Alan Dunne are joined by Philippe Jordan, President of CFM, for a conversation that challenges conventional thinking about systematic investing. Drawing on 35 years of experience, Philippe explains why even the most sophisticated models sometimes need human judgment, how AI is transforming the search for alpha, and why diversification matters more than any single strategy. They also explore the limits of scientific approaches to markets, the importance of investment culture, and why trend following’s greatest value may have little to do with protecting investors from the next crash.

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Episode Timestamps:

00:00 - Why trend following isn't crash insurance

01:05 - Can investment flows create lasting market edges?

02:33 - Philippe Jordan and the evolution of CFM

08:06 - What scientific models miss during extreme market crises

13:56 - Why CFM moved beyond traditional trend following

16:28 - Scientific rigor and the growing power of technology

20:51 - Why investment culture matters as much as technology

25:05 - How AI agents are transforming quantitative research

28:29 - Balancing model robustness with diversification

33:13 - The case for systematic investing beyond equity returns

42:08 - Alternative markets and the search for genuine diversification

50:48 - Knowing when human judgment should override the models

55:07 - How CFM has reinvented trend following

58:36 - What investors should realistically expect from trend following

01:02:23 - The long-term reality of trend following returns

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