What does SP reward?

agreed.

if SP is going by the person with the best risk adjusted returns then statistically speaking there is always going to be someone who can pick a few good stocks that happen to have limited volitility for a certain period of time

one of the reasons that probably is, is because of the way the sharp ratio is calculated. you cant only look at returns you have to look at standard deviation as well

risk adjusted returns is how fund managers are judged and although fund managers rarely hold as few as a handful of picks when it comes to retail investors that may be a little more pragmatic