He buys $100 million worth of X stock. People follow and buy $100 million worth of the same X stock, stock is now wanted and goes up in price, Buffett sells his shares and profits.
Why is this not happening?
In: Economics
It is impossible to buy $100 million worth of a single stock at once. You need to find people who are selling those stocks. If you are lucky then there may be $100k worth of stock at sale at any given time maximum. But if he buy them then everyone knows that he is looking to by those stocks and people who were only considering selling their stocks would offer them for sale at inflated prices. So Buffet is not able to buy at the bottom. When he first starts buying the prices go almost to the peak within a few seconds before he is able to fully get into the market and start buying. Similarly if he starts selling then the prices will plummet to the ground even before he is able to sell even a fraction of it. It is possible to do a pump and dump scheme which is what you are suggesting. However a key element here is that you need to buy the stock before you start pumping them. In Buffets case the stocks gets pumped because he starts buying them so he is not able to get inn early enough.
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