smart money / dumb money ratio

D

dozu888

what would you say is the ratio of smart money (e.g. hedgies with well defined edge) vs. dumb money (e.g. joe blow with a brokerage account who buys stocks on a hot tip)

30/70?

50/50?

70/30?

I am talking in absolute dollar amount terms...... trying to get a better understanding of the market structure.
 
Quote from dozu888:

what would you say is the ratio of smart money (e.g. hedgies with well defined edge) vs. dumb money (e.g. joe blow with a brokerage account who buys stocks on a hot tip)

30/70?

50/50?

70/30?

I am talking in absolute dollar amount terms...... trying to get a better understanding of the market structure.
More...
First you have to define how would you measure it.

Large block orders, (10,000+ shares, or $200k+) can provide a great insight of large financial institutions.
http://www.tradetrek.com/Education/webclassroom/blocktrade.asp

Be aware that sometimes the moves of smart money may be dumb choices for individuals.
For instance mutual funds may not short, during market plunges.
 
Quote from robbie380:

just because hedge funds have money doesn't mean they are smart money.
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Indeed, it's been shown that hedge funds as a group underperform the market, so it would be a mistake to put them in the "smart" category.
 
the only smart money is the fast money! Whaddaya psychic or sumthin??!! buy and hold is for losers.

Quote from dozu888:

what would you say is the ratio of smart money (e.g. hedgies with well defined edge) vs. dumb money (e.g. joe blow with a brokerage account who buys stocks on a hot tip)

30/70?

50/50?

70/30?

I am talking in absolute dollar amount terms...... trying to get a better understanding of the market structure.
More...
 
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