Wealth Manager

January 2008, Wealth Manager

A strategist discusses why alpha’s horizons may be broader than you think.

By James Picerno

Chess is one example, poker is another. But is
investment alpha a zero sum game, too? Do
the winners in money management always
triumph at the expense of the losers?

January 2008, Wealth Manager

Does thinking in risk-adjusted terms increase the supply of alpha?

By James Picerno

Alpha is widely viewed as a zero sum game,
and so for every investor who
beats the market, someone must trail it.
If this balancing act accurately describes
how the money game works, there’s a limited
supply of alpha—which is to say something
other than beta. And of this finite
quantity, then only half is positive alpha.