This quote means that smart people know what to say but wise people are capable of analyzing the situation and evaluating whether it is correct to say it or not. I do not agree with this phrase because you do not need to be wise to read a room. It does not have to do with how smart or wise you are. Knowing whether to say something does not make you wise. I believe that if people are smart, they are able to determine the right moment to say a certain thing. They don't need to be wise to do so.
