This is one of my favorite topics in all of investing. I can’t really explain it, I just think it’s cool.

I first learned about smart money by watching a video on YouTube that will be featured later in the post. Basically, smart money is comprised of all the big dogs of trading: mutual funds, hedge funds, incredibly wealthy people (Warren Buffett).

These people are throwing around millions upon millions of dollars and are the wave starters. They get in a stock, it begins to gain momentum as people start to notice it rise, and then it becomes the hot stock that everyone wants.

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