One of the most amusing phrases on Wall Street is “smart money.”
This phrase is used to describe the handful of professional investors whose abilities and foresight are thought to be so acute that they spot the big moneymaking opportunities before the average Joe Pro.
The smartest of the “smart money” is thought to be hedge funds.
A look at recent performance suggests that hedge funds are indeed extremely smart money, though not in the way that most people think.
In fact on average, hedge funds are no smarter about picking stocks or other investments than anyone else. In fact, they’re decidedly, startlingly worse.
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