Bill Ackman is one of the world's most notorious hedge fund managers.
In 2004, with $54 million, Ackman started Pershing Square Capital Management and today has a net worth of more than $3.5 billion.
Here are 11 lessons from the man himself.
THREAD
In 2004, with $54 million, Ackman started Pershing Square Capital Management and today has a net worth of more than $3.5 billion.
Here are 11 lessons from the man himself.
THREAD
1/ Ackman's fund typically owns between 8 and 12 holdings (long and short) and they only engage in a few new investments each year.
Occasionally, he will be an activist to spur change.
Here's more on how he invests 👇
Occasionally, he will be an activist to spur change.
Here's more on how he invests 👇
2/ "Ultimately, investors are only as good as their track records".
His style of concentration makes for some volatile years but his 16% CAGR since inception (vs 12% for the S&P) speaks for itself.
His style of concentration makes for some volatile years but his 16% CAGR since inception (vs 12% for the S&P) speaks for itself.
3/ "If I believe that I am right, I will take it to the end of the earth until I am proven right".
He isn't afraid to be an activist to spur change. Sometimes this works tremendously, others times not.
Here are some of the companies Ackman has engaged with.
He isn't afraid to be an activist to spur change. Sometimes this works tremendously, others times not.
Here are some of the companies Ackman has engaged with.
4/ "I'm not emotional about investments. Investing is something where you have to be purely rational and not let emotion affect your decision-making, just the facts".
- Never let emotions get in the way of being a great investor.
- Never let emotions get in the way of being a great investor.
5/ "In order to be successful, you have to make sure that being rejected doesn’t bother you at all".
- Ackman has had some tremendous flops in his career, such as his 5-year short on Herbalife (they even made a documentary about it). But he always gets back up and marches on.
- Ackman has had some tremendous flops in his career, such as his 5-year short on Herbalife (they even made a documentary about it). But he always gets back up and marches on.
6/ “Experience is making mistakes and learning from them".
- Learning from past mistakes can be an inexpensive way to prevent more costly mistakes in the future.
- Learning from past mistakes can be an inexpensive way to prevent more costly mistakes in the future.
7/ "What the market tells you in the short term is what a certain subset of people believe. That doesn’t mean they’re right".
- In the short term the market is a voting machine, in the long term it is a weighing machine.
- In the short term the market is a voting machine, in the long term it is a weighing machine.
8/ “I think most investors overdiversify because they’re lazy. They haven’t done enough research into any of their companies. If they’ve got 200 positions, do you think they know what’s going on at any one of those companies at this moment?”.
- Bet on your greatest ideas.
- Bet on your greatest ideas.
9/ "I have more money than I need. I don’t need to work for a living. I do this because I love what I do".
- Never do it for the money.
- Never do it for the money.
10/ "We invest generally in very good companies that have lost their way. And with better management, enormous value can be created".
- Never underestimate the potential for a once great business to turn around.
- Never underestimate the potential for a once great business to turn around.
11/ "Short-term market and economic prognostication is largely a fool’s errand, we invest according to a strategy that makes the need to rely on short-term market or economic assessments largely irrelevant".
- Focus on what you can control, and know. Ignore the rest.
- Focus on what you can control, and know. Ignore the rest.
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