Smart money

[hissho]

hi all
we can find terms like "smart money","professional money","insiders" etc

are they all referring to market makers?

from time to time, we can encounter situations like a company got some good news but its stock didn't surge and tumbled instead. some people would say "cos the smart money(insiders) had already known it and they started distributed that stock so the share price fell..." if that comment is true, can that be considered insider trading, which is a criminal offence?

thanks!

 

[Sean K]

Not necessarily. I think 'smart money' could be just the people leading the trends. The traders who see the opening, or the undervalued companies in the right industry. Then, when everyone jumps on and the big % gains are made, they jump off. Maybe. I think insider trading is a different fish in a kettle.

 

[nizar]

smart money i thought means instos, the big money, the pros

 

[Sean K]

Yeah, but even they get it wrong. Not always that 'smart'.

But, have to agree. They are the ones that really move the market, and have face time with the company managers. So, they can ask the relevant questions and they know what's in the pipeline. Plus, I'm sure tha analysts get a pretty good feel for the quality of the managers when they meet.

Maybe it's 'smarter' money.

 

[Wysiwyg]

Not necessarily. I think 'smart money' could be just the people leading the trends. The traders who see the opening, or the undervalued companies in the right industry. Then, when everyone jumps on and the big % gains are made, they jump off. Maybe. I think insider trading is a different fish in a kettle.

Something I have question with is this common occurrence chart where there is the top at A and then an additional run of 10.8% from the peak in A to the peak in B.

One would think a buy after the first peak A would be high risk and this is true because from the additional peak B the price drops dramatically. Is it plausible that smart money exited at peak A and the silly money pushes price up a little more in these circumstances?

 

[tech/a]

Yes
In this chart you can clearly see the 5 wave pattern.
The smart money would be in and out before massive volume.
On the way down you can see the panic in range and volume.

Smart money is generally referring to those in Nizars post.
They are generally doing the opposite to you!!

 

[Wysiwyg]

Thanks for the feedback tech/a.