what is the definition of smart money??? simply because one invests with size does not mean it is smart money... wouldnt agree??? some of the savviest, and most astoot investors make foolish investments/decisions... with this being said... how do you discern which is smart money, which is "dumb" so to speak... and how could you implement this while reading the tape???
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smart money...
- Thread starter dgmodel
- Start date
Here goes a very broad generalization:
Smart Money: Hedge funds, Quants, insiders.
Dumb Money: Mutual funds, 'the public'.
Smart Money: Hedge funds, Quants, insiders.
Dumb Money: Mutual funds, 'the public'.
Quote from dgmodel:
so how do you know whos who???
Yeah, that's the tough part. IMO, spotting the dumb money is easier than spotting the smart money. By law, all company insider activity is published- but only weeks after the fact.
There was alot more dumb money around 2 1/2 years ago.
When QCOM was up 34-fold in one year, and still had big up days- that's dumb money getting in.
Heavy selling after the market's been getting killed for weeks- like last July & October- that's dumb money (forced selling, caused by mutual fund redemptions) getting out.
Some guys also look at odd-lot activity & the Ameritade Index.
( http://www.ameritradeindex.com/ )
IMO, Daytrading sucks these days precisely because equity mutual fund inflows have slowed to a trickle, and there's not nearly enough dumb money moving in & out to make things interesting.