CharlesS’s Reviews > More Money Than God: Hedge Funds and the Making of a New Elite > Status Update

Big block traders faces little competition because of their network of brokers. Brokers call when there’s a large block being sold (often at a good discount) and they call brokers when they look to resell the stocks at a premium (brokers are willing to find buyers or buy themselves because of the commissions they receive from the gender fund traders).

One weakness of the efficient market theory is that often prices are not driven by information but by investor appetites. An insurance company may suddenly have a large block to sell to pay some claims, and the selling pressure would drive down the price. A pension fund may need to employ a new inflow of employee money to buy a large block, driving price up.