Yet the market beta still casts a long shadow on return as a general rule. In the short run, we can do better, according to the new finance-or worse. Keep in mind that investors who beat the market are financed with losses from those who trail it. Returns are still a zero sum game in the new finance.
The old finance no longer has a monopoly on deciphering markets, but it's still a mistake to think that its lessons are worthless.
James Picerno is editor of The Beta Investment Report and author of Dynamic Asset Allocation (Bloomberg Press).