|The Jolly Contrarian’s Dictionary |
The snippy guide to financial services lingo.™
Beta /ˈbiːtə/ (n.)
So-so. Ordinary. Unspectacular. Safe. Dull. Meets expectations. Won’t try to rip you off.
Since the whole market has all the securities in it, you can’t add to that, the whole market has a beta of 1.
Therefore, to track beta is to track the whole market’s performance. Therefore watch out for — well, to put not to fine a point on it — bullshit products claiming to yield returns like “intelligent beta”; “smart beta” or “enhanced beta”. Nonsense on stilts.
Good article here.
- Greeks - the home of all things Greek on this site. It’s our own little Athens.
- Nu - a trick for young players — and those with a degree in Classics.
- Omega — the end of days, and the right time for backtesting
- Vega — not really a Greek at all, but a maudlin singer-songwriter
- Enhanced beta
- Leveraged alpha