Question- ‘Who moves the markets?’, answer -‘the big guys’ !
Warren Buffet has the largest holding of Coca-Cola Co (NYSE:KO) after Wells Fargo. As of 30th September 2014, Warren Buffet’s Berkshire Hathaway holds around 400 million of Coca-Cola Co stocks valued about $17 billion. At his scale, Buffet spends much longer time than smaller investors just building on or liquidating big position of a stock.
Today, April 6th,2017, the stock traded only about 14.60 million.
If he wants to square off his entire KO position and sell every single share, how much time would it take for him to execute this sell off? Furthermore, without spooking traders and without causing big drops in prices, for how long he has to spread the sell off! It might take take him a months or years together to get out of his position. That is the one reason, when big institutions make a move they cause ripples through markets