Big investors cutting their position?

Question

The public knows certain (ex. Buffet, Lampert, or Soros) investors' positions in certain stocks. First of all, if one of those big players felt the need to abandon his holdings in a stock, why would anyone buy the stocks from him when it's clear that the forecast doesn't look too great if such a mindful investor is bailing out? Second, if Warren Buffett completely pulled out of one of his stocks, wouldn't that cause practically all of the other smaller investors to sell, causing that stock price to absolutely dive?? I am just confused on how these huge investors can sell when they want/need to?

Answer 1

When big investors buy large positions or liquidate their positions, they do it as anonymously and secretly as possible. They also do it over a period of time so that they don't flood or dry up the market.

Answer 2

The markets today are extremely large and are interconnected worldwide.  Some estimates gave the size of the worldwide stock market of about $50 trillion and that of the bond market $45 trillion.  The derivative market is somewhere from $300 trillion to 500 trillion.  Assets of the big investors, in the range of tens of $billion, is relatively very small making blockage factor less detrimental.  

In street trading, the sizes of the buy and sell blocks are matched up without exchanging the seller and buyer names.  Even in private placements, where the buyers know that the traders are big guys, the names of the sellers send signal only in cases of infrequent trading such as a CEO selling his own company's stock.

Answer 3

you will have to know the reason, moment an price they bought. on an easy way, I'm no expert. but if someone bought a stock for 100 and its on 50s right now, it could be bailing out before he loses more money, but someone else could see an opportunity to buy low and hope to recover. or they are just cashing for a big gain.