Following the Clever Money

We've just published a new T2W article called "Following the Clever Money" by Dominic Connolly.

Quick Summary: Tracking the moves of big-money investors can dramatically help one's stock market returns.

PS. Don't forget to rate the article after you've read it and share your comments on this thread.

excellent article.
certainly another way to filter out good investment stocks from bad ones.
worth significant further analysis for the medium/longer-term players.

a paper-trading test based on the article could be the UK equivalent of wwatsons thread "Im doing great".

Very enjoyable article, well done

This was a very interesting article. Thank you.

Following the clever money? Well, it's something similar, not definitely the same as:

Let's say you go into a casino and observe the Roulette wheel. And say, you observe that every 100th turn of the wheel that small thing lands on 13. Let's say further, you observe 2000 times of that happening. So the next 100th turn you place a bet on 13. You win, you place a bet on 13 on the next 100th turn, and the next, and the next.

If the casino operators realize that you are able to follow the clever money cleverly, I wonder if they will let you stay in the casino for too long? And if you follow the coat tails of investors far brighter than yourself, will they really let you know where the clever money is going?

Hi Dominic

I thank you for a most insightful article.

I find it very constructive to hear how the top guns are operating.

Simon

One of the best articles I have read in recent times. Thank you Mr Connolly for sharing your method. The beauty of this strategy is that it can be employed by anyone, it should not matter if you are a fundamental trader or technical. Following smart money is common sense.

I plan to look into this more deeply now.

I agree that following 'smart' money (I use inverted commas because it doesn't really matter whether it's smart or not, as long as there's enough of it to move the price significantly) is a sound strategy and have used it in a general sense for some years. But once you get to the specifics, how does the average private investor know what the smart money is doing? How does someone maintain 'a list of major stakes and holdings' and, more relevant, how they are changing, so that you can take advantage of them. I am a reasonably active investor, but the number of RNSs that come out in the course of a week, or even a day, is mind boggling and I personally could not hope to keep track of them all and their relevance to an individual share.

Does anyone have any advice on how you can make the process manageable, because without that it seems to me that this is another theory which is fine for the professional or semi professional with access to detailed information sources but, in practical terms, not much use to the ordinary private investor.

(Sorry, that reads a bit aggressively which it's not meant too : just asking in a genuine spirit of enquiry in the hope that someone has the answer !)