The big players are preparing for the crisis: What does it mean for small investors?

In recent weeks, warning signs have started to appear on the financial markets that no responsible investor should ignore. From the 13F reports, which reveal to us the changes in the portfolios of the largest investors for the second quarter of this year, it follows that some of the most influential players in the market are starting to prepare for possible problems.

Buffett and others: A sign of a coming storm?

Looking at the recent moves of legendary investor Warren Buffett, one can't help but notice one disturbing trend: the massive increase in cash in his portfolio. Why would one of the biggest optimists in the stock markets suddenly accumulate cash? The answer may be clear - he expects a crisis. And Buffett isn't the only one.

Other high profile investors such as Bill Ackman and David Tepper were also increasing their cash reserves. This may appear to be a purely defensive move, suggesting that the big players do not see opportunities in the market that justify the risk of investing in stocks. If this is how those with access to the best information behave, we should not take it lightly.

Technology and cyclical stocks under pressure

One of the most alarming trends is the outflow of money from technology and cyclical stocks. Stan Druckenmiller, another legendary investor, dramatically reduced his positions in technology stocks and moved into more defensive sectors. The move may be an indicator that he expects significant declines in sectors that have previously driven the markets higher.

Druckenmiller is known for his ability to time the market and capitalize on crises. The fact that it is now significantly increasing its defensive positions is a clear signal to small investors that they should reevaluate their own strategies and perhaps start looking for safer havens for their money.

What can you do?

If big players like Buffett, Ackman and Druckenmiller are increasing their cash and reducing risk positions, it's time to think about whether you too are too optimistic about your investments. You might consider the following steps:

1. Increase cash reserves: If you have the majority of your portfolio in stocks, it may be wise to move some money into cash to be prepared for possible opportunities that arise during a crisis.

2. Diversify the portfolio: Focus on defensive sectors that tend to withstand market downturns better, such as healthcare, consumer staples or utilities.

3. Consider short positions: If you are experienced in derivatives trading, you can try to profit from expected market dips by taking short positions in risky stocks.