Who’s on First? Know the Players
After I know what is happening, as defined by market prices, I set out to learn why the changes are taking place. If there is going to be movement, then I need to look for who is causing the movement.
I have cultivated many relationships over my long tenure in the industry and thus enjoy the privilege of speaking with contacts in all areas of the business. I speak with bullion dealers around the globe, mining company executives, foreign exchange players, hedge fund managers, bank risk managers, reporters for news services, central bank research employees, and on and on.
Even the most well-connected professionals can extend their contact base for exchanging information. Most of what we might hear is noise. But often, just one offhand remark by a colleague—usually a quip made without specific intent or meaning—can generate a spark in your thinking that might tie up some loose ends or put a piece into the bigger-picture puzzle. Individual investors can make an effort to speak with a market professional, a broker, or family member, or acquaintance, on a regular basis. I can derive insight into what other market players are thinking, and more importantly, what action they are taking. I want to know what the smart money is doing.
Indeed, sometimes knowing that the “smart money” is thinking the same thing, all around, to the point of being fully invested, not only financially but emotionally, suggests that a cautious approach is prudent.