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there is no theoreticall basis for high returns to necessarily have lower ratios beyond capitalism.

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beyond capitalism? what does that mean?

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according to capitalism, higher risk means higher returns. you have to take more risk to incur larger returns.

what i meant to say was that there is no theoretical reason why higher returns must have a necessarily lower ratio beyond cost of leverage etc. (i.e. usually in order to gain more exposure, it costs some small amount so higher returns that have proportionally higher risk lose a little in their ratio in terms of the costs of taking the more risky positions... i.e. you can't costlessly scale up high IRs). that is what i meant by capitalism though i was a bit glib.

Barron