88e Long Term Investors Group - Questions for Dave, page-9

Seems another Marcus Padley quote is in order

There is no Smart Money – I do cringe when I read or hear someone talking about the smart money. The implication is that you are dumb money, which may be true, but I’m afraid there is no echelon of smart people out there that always have the jump on you. Smart money simply refers to anybody that bought at the bottom or sold at the top and everyone in the middle can then be graded from smart or dumb depending on how close to the top or the bottom they sold or bought. But I don’t think smart money can be labelled smart unless it is smart consistently. Of course someone bought at the bottom and of course someone sold at the top but rather than being ‘Smart Money’ it is more likely to be ‘Lucky Money’. The only genuinely smart money in the markets is not actually smart, it is just big, because the big money can start and finish trends. So when the head of investment at Fidelity decides to sell resources and hands out orders to sell $50bn worth of resource stocks, resources peak and start to fall. That might qualify as a definition of smart but in reality the head of investment isn’t necessarily smart, he just has a lot of money. Bottom line you are not a victim of much smarter people. I don’t think anyone’s really ‘smart’, there is simply a level all investors or traders get to with experience and below that there are just different levels of dumb.