Moshkelgosha

What Is Smart Money?

Long
Moshkelgosha Updated   
NYSE:VLO   Valero Energy Corporation
Smart money is capital placed in the market by institutional investors, market mavens, central banks, funds, and other financial professionals.
Smart money also refers to the force that influences and moves financial markets, often led by the actions of central banks.
Smart money is invested on a much larger scale than retail investments.

But do you know why they call themselves Smart?

Because their access to data and their analytical ability at any given moment is much higher than retail traders!

Bringing the game to the next level:

After I publish my analysis for VLO on March 7th, 2022, and mentioned an opportunity to buy at 86-87 level with a 46% gain in less than 6 months:

1- March 8th,2022:

- Bank of America added VLO to the US1 list and adjusted its target price to 135 from 107 for 2022.
(The US 1 list reflects strategic stock recommendations made by the BofA Merrill Lynch US 1 committee.)

-Scotiabank Raises Price Target for Valero Energy to $90 From $83.

2-March 14th,2022:

-JPMorgan Adjusts Valero Energy's Price Target to $101 From $95
-Tudor Pickering Raises Price Target for Valero Energy to $104 From $93

So, it is not impossible to beat the so-called smart money..!

Another layer of analysis:

If you are looking at oil prices since March 7th, you see a 15-20% correction, but VLO is up more than 6.3% since then???

Because there is something more important than Oil price for refineries..!

That is called Crack spread..!

Any increase in the crack spread will increase refineries profit exponentially..!

While the oil price is 34% up YTD, Crack spread is up 91% YTD, which means lower oil prices could increase the refineries profit..!

moreover, VLO is the second biggest Biodiesel producer in the world and benefit from it as well..!

Conclusion:
I will not care about oil price as long as the crack spread is higher than the 2021 average(21)..!

Best,

Dr . Moshkelgosha M.D

DISCLAIMER

I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.

* I have a long position.




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