How does Warren Buffet scale in and out?

Discussion in 'Trading' started by bontrjd, Sep 14, 2007.

  1. bontrjd


    How do large funds and traders scale into a position and hide their trades? It seems like when you have that many shares to buy that people would front run your orders and make it tough to put on a sizeable position. Wasn't it Steve Cohen who admitted to placing fake trades in one direction oto throw off the people following his firm?
  2. OPTIONS . Leaps. They exercise those.

    They are like cruise ships, you can see them turning with your basic indicators like MACD, Stochastics and Moving averages. Most of thier stuff is open knowledge. Moneyflows and Accumulation / Distribution indicators help.
  3. You can see what they all hold at

    You dont see what they are shorting or possibly hedging- in the form of index shorts or equity shorts.

    You see long equity, calls and puts that are bought, bonds, stuff like Semi holders, QQQs, but no futures, no shorts.
  4. bontrjd


    I understand that part of it, but take BNI for instance. If Buffett is going to buy 10 million shares, I wonder what the strategy for building a position quietly over time is. That's all. Not a problem I have obviously, but I am curious because it must be an entirely different ballgame for such a large holding.
  5. first of all, they have trader(s) whose sole job it is to work the orders

    basically, they accumulate over time

    that's how institutions trade (it's also how i often try to trade) ... accumulate on weakness

    many institutions, large traders (heck, some small d00ds too) establish a position and add to it over MONTHS.

    it's a totally different mindset

    buffet also is a deep value player, and when you are buying stuff like that, it's GOOD when the price goes down, cause you get more cheaply.

  6. Buffet is a value investor. Some mutual funds beat the pants off this guy for yearly comparisons. For example

    CACFX has performed 56% YTD returns while BRK.A hasn't done less than 10% YTD.

    This guy is lots of publicity and good PR.
  7. I would imagine you would want to have a broker find a big block for you. Maybe he can match your order with an institution or another party that wants to sell a large amount of stock.
  8. bontrjd


    Thanks for the responses.
  9. They pay for anonymity. They use a bevy of institutional brokerages and they don’t want their hands tipped so they know who they give what orders to and if what they’re doing hits the street they never send another order to that desk. The desks respect that cause they want the business.

    Forget the calls and puts the volume info is useless since you don’t know from just volume whether they’re opening buys or sales or vice versa and you don’t know if they’re doing stock with the options for a synthetic.

  10. The stock shows accumulation/ distribution right away. Indicators lit up like light bulbs. You can tell if a cruise ships is turning or not.

    Xflat, why are you so dumb ?
    #10     Sep 15, 2007