Wrong. This is a dangerous assumption often posted on these...

Wrong. This is a dangerous assumption often posted on these boards to comfort one another in the face of a declining share price. Big investors CAN be smarter and better informed but frequently demonstrate otherwise.

Big shareholders buy different stocks for a whole host of reasons. Maybe some hedge fund has worked out that MML stock is inversely correlated with some stock on the other side of the world, and therefore provides a hedge. Maybe the stock is part of some index which means a fund manager must buy it regardless of fundamentals.

Aside from my hypothetical examples above you can simply follow the substantial holder notices to realise that big holders make the same mistakes as individual investors. You should go back and have a look at how HHL bought DRM shares (almost 20% of the company) and have now sold their holding at a loss of millions. Or you can follow HHL purchases of BLK. If their due diligence involves talking to management then they can be duped in the same way as anyone else if management forecasts are wrong. In addition, some large investors may not have a specialisation in mining and therefore not recognise the technical pitfalls. Ever heard of Bre-X? (hint: it was the basis of the film 'Gold').