Intro to Dumb Money vs Smart Money

 Smart money is people who either have direct insider information (legal or otherwise), or can make a market turn in their favor through  big money movements and purchases.
       For example:  JP Morgan who owns massive commodity warehouses and makes large market moving trades on the commodity markets is a  smart money force. 
  Congresspeople, who insider-trade their own committee decisions before announcing them to the public is also a smart money action (legal). 
Saudi sovereign wealth funds and Saudi Princes who get guarantees from the FED and  rich warrants to loan to American banks in a crisis are smart money.
 Ted Turner with millions of acres of ranch and mining land is smart money. 
   The rest of us retail investors don't have the connections or the advisors to be smart money and we must play catch up to ride the coattails of smart money actions.  We should consider ourselves to be dumb money, lest we develop hubris and don't foresee government interventions in our trades. 
        The big advantage of being dumb money is that our investments are agile and anonymous.  A billion dollar sale of banking stock raises eyebrows and takes a few days to transact, but a $600 option purchase is immediate and silent.  What I do is try to find underground news affecting stocks and commodities,  survey my market gurus regarding the asset in question, and analyzie price and volume data for patterns.  Then we make a trade that may be WITH smart money, rather than with CNBC Cramer watching, "dumb money" retail investors.    There is no way around it:  Mutual Funds, retirement account managers are dumb money and underground, inside information media is smart money.    Smart money doens't have a dollar denomitated retirement account.  They have a silver mine, a farm, a 100 condo development, a stripmall and a ranch, an oil well, just to be diversified for retirement.  NOTHING is in stocks long term for them.  It is a cycle of accumulation of stocks when dumb money is fearful and distribution of stock when dumb money turns confident.  And we have crested the bell curve from accumulation to distribution zones.     I will explore more about this "smart money distribution dome" in a later post.