macrocephalopod

why would you decrease leverage to get the desired returns?

The whole point of “volatility pumping” is that an asset with zero geometric return can be made to have positive geometric return if you reduce the leverage. My claim is that you can’t find assets with high enough volatility for that to be interesting in practice.

That is a very simplistic view of what vol pumping is. Vol pumping isn't abut an asset with zero geo return, its just the most eye catching type. There are plenty of articles on vol pumping where cash isn't involved, and the "pumping" is just between a bunch of risky assets.

This is exactly the same as saying that by diversifying you can reduce the volatility drag of a portfolio of assets, right? ie “diversification is the only free lunch in investing”.

These buzzwords/terms just describe the general trading problem we're all familiar with don't they? If you find a stable (Geo mean = 0) noisy thing you can trade deviations from it. Where do I find this stable noisy thing? Well, indeed.

Just for the record, there's nothing "stable" about a geomean=0 stock. "Stable" implies mean reversion. A geomean=0 stock driven by random multiplicative noise is completely unpredictable, that's why it's interesting. (At least to me.)

If it has geomean=0 then it ultimately doesn't go anywhere. Is it not self-evident that we could profitably trade such a series if it is volatile? The main trading question is - where do you find stuff that looks a bit like this (for a small period of time or in combination)?

If it's an arithmetic random walk with mean=0 on a log price chart, the log price diverges over time. There's no "deviation from" or "attraction to" any particular price or level. Yet if there's enough volatility you can get rich off it. Sorry, but I just think that's cool.