I've always believed in watching what people do more than what they say. Folks can talk all they want, but if they're not buying what they're recommending, then they either have a conflict of interest or they're probably just being disingenuous.

In the case of the smart money - hedge funds and other institutional investors, who have much greater access to capital, talent, and data than the typical retail investor - their actions bespeak a great deal of fear and loathing regarding the future of the equities markets.

With the S&P 500 hovering near all-time highs, the retail crowd persists in bidding up large-caps while the insiders - the ones privy to the vitals of those large-cap companies - are selling at a pace we haven't seen in a couple of decades:

Courtesy: Smart Insider, Financial Times

They're stockpiling cash, and as Capital Asset Management senior vice president Samuel Boyd observes, "Cash is king, and it can mitigate portfolio risk as well provide a fulcrum to capture opportunities when the world is on sale." Evidently, the smart money believes the world will be on sale in the near future - not an event to fear if you've got plenty of dry powder.

Equity Group Investments hedge-fund manager and billionaire Sam Zell is among the ultra-cautious, conceding that "We certainly never had a cash position like we have now" and "We think there's going to be some significant opportunities." That's a polite way of saying that equities prices are going to be cheaper, and since bonds yield very little nowadays, cash is an attractive option at the moment.

Besides retail investors, I suspect that the only ones buying stocks at the current valuations are corporations that are buying their own shares:

Courtesy: Bank of America Merrill Lynch

After all, corporate share buybacks are one of the few things - along with accommodative Fed policy, of course - that are holding up the stock market. When that structure collapses, I'll be ready - me and the smart money, wherever they are - with cash in hand and greed in my heart.