Momentum and mean reversion might just be volatility bias
The Economist just published an article called The best, the worst and the ugly. By looking at historical performance for mutual funds, they find strong support for momentum and mean reversion. Picking the best or the worst fund over the previous five years gives great returns over the next five years.
I think this is just confusion around what risk reward is. Selecting the worst and best performing mutual funds is basically a way of selecting funds with high volatility. Any risky asset with higher volatility will give a slightly higher return. This is predicted by the Capital asset pricing model, which AFAIK is a reasonable approximation of reality.