A guidance to consider but not to follow blindly
Smart money and hot money are two distinctive elements which are playing different roles in capital market.
Smart money often described as the capital from big institutions or famous high net worth investors, in which their investment amount is big , backed by strong research team and mastering some forms of market intelligence in someway.
While hot money simply means capital that participated in the market rally during the market sentiment is hot and rolling, especially during the time where quantitative easing is in place. Anyone that participate in the market can be part of the “hot money”z
Both smart money and hot money are capable to life up share price, but the main distinctive feature is the “intelligent level” .
Smart money usually are from big institutions such as $Berkshire Hathaway-A (BRK.A.US)$ , investment banks, private equity firms , various funds etc. They are more superior in terms of strategy, expertise and have a better long term vision, Hence, a higher winning rate.
Form 13F serves a a good guidance for us to track the stocks hold by various institutions and it allows us to brain storm the rational of their investments. For example, $Berkshire Hathaway-A (BRK.A.US)$ disclosed that they purchased $Chevron (CVX.US)$ during end of 2020 , when most of the people in the market still underestimate the recovery of oil market. As a result, CHEVRON’s share price had been rallying strongly up to USD 180 within two years.
i always encourage investors to take the disclosures in form 13F as a guide but to also take it with grain of salt , afterall we all are adults and we should responsible for all the decision we made and shouldnt follow blindly.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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