Crossing a street in New York City, in a way, serves as a nice investing lesson.— an investing lesson about when to follow the crowd and when not to. One that nobody teaches in a classroom, but one you can see play in markets each day.

Here’s what I mean: Watch what happens at a busy intersection filled with locals and tourists. The locals, the people who know those streets in each and every way, don’t always wait for the walk signal to make their move. They often read the flow of traffic, spot a large opening that’s clear and no sight of a car, and move across the street. In this sense, their time in the city, understanding, time spent observing patterns and lights, has become their method of getting around without always following literal signs telling them what to do.

The tourists do something different than the locals. They either wait for the signal, the exact sign that says one can walk, and then they go. The other method, however, is a bit more precarious, in that when a local cross the street, the tourists will actually follow that local. Not because they read the traffic, but because someone else did.

An Investing Lesson: How Locals Follow the Crowd — and What It Teaches Us About Markets

The smartest investors spot the next big move before it happens. They research, wait, and position early. As the move becomes visible, it’s the followers who pile in, and not because they did the work, but because someone else did and they copied that signal.

“They’re the experts, they must be right, so I’ll do the same.”

Many say this is how retail flows chase pro moves. That’s how momentum builds. And it’s often how late-stage buying happens at exactly the wrong time.

The pros do all the research, the positioning, the planning. Then, everyone else just copies that move. In the sense of locals in New York City vs. Tourists, the locals know how the streets work in and out. When they make their move, often then the tourists will follow.

Watch For Opportunity, Not What Other People Are Doing

The lesson isn’t to be contrarian for its own sake. It’s also not saying copying others in markets is bad. Trend following has shown to be a powerful investing style. But for true long-term wealth, to be the Stanley Druckenmiller’s or Warren Buffett’s of the world, it’s simply to do the work so you can read the conditions yourself, and make your move when it’s time. You don’t need someone else crossing first before you move.

Make your own opportunity.

Watch the lanes. Do the research yourself. Don’t just blindly follow across a street.

Be the local, not the tourist.

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