It's Dumb To Buy 'Smart Money': Wall Street's Rules, Part 5
However, very rarely do you ever see a headline describing the losses that a "smart money" manager has amassed. Do you suppose that is because those managers are always right?
If it rains, everyone is bullish umbrella companies; in snow storms, the futures of shovels and snowplows tend to soar. Conversely, this has established what I see as the arrival of a wave of "fair-weather" investors.
The only problem is Wall Street is the meteorologist in a place that is considered a casino where it also serves as "the house."
What this means is that in a forward-looking market, in order to win, investors have to be able to spot these trends before they occur, not just place bets on whatever some hedge fund manager has done - by then it's too late to profit.
Investors playing "Simon says" with their portfolios have caused an epidemic of failure, solely by these investors' need to be comfortable.
What's the point of being comfortable? Instead, be smart!
At the time of publication, the author was long AAPL and held no position in any of the other stocks mentioned.
Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.