Saturday, 20 June 2009

Non-Financial Times

Financial Times

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Smart Money vs Dumb Money

It seems individual investors are shoveling money into the market. Inflows into equity funds have been very strong over the past four weeks, according to Trim Tabs Investment Research. And that’s precisely why some pros are getting out. That right, the catalyst that some pros are using to short this market is --you, sucker.

Trimtabs president Charles Biderman is advising all his professional clients to turn entirely bearish on US stocks in part because you’re coming in. He says individuals pointed to the market’s bottom with record outflows in March and now they’re pointing to the top with hefty inflows. In other words, retail investors follow the heard and by the time they join the party it’s practically over. That makes you – and me -- a contrary indicator. "I happen to agree," adds Fast Money trader Guy Adami. "The retail money typically comes in late.”
But why can’t that be a positive? “They’ve always been wrong before,” says Biderman. “They invest with their eyes on the rear view mirror and their foot on the gas and wonder why they crash.” In fact, Biderman thinks we're all wrong. He says top insiders of public companies are not buying -- they’re selling – and as fast as they can.
Lee Brodie, 19 June 2009

Master of Suckers Lee Brodie leads his troops against ugly insiders. The probable outcome will resemble Rocky movies - bumpy road towards dizzily clear skies.
Why? Suckers know they have to buy after a crash and when the recession is over. Those brainless insiders don't, they think they are smarter than that! Secondly : look at those handsome Fast Money guys, ideally fluent in thought and speech. Do not be afraid of an old Biderman. Thirdly, a smart money initiated sell-off will not last if only we 'suckers' don't panic.

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