Bill Ackman
speaker
1,217 appearances
6 recordings
6 series
first heard Feb 2024
last heard 3 Jun
Bill Ackman’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 2 in all, peaking in Jun 2026 with 2.
Appearances
But in the long term, the stock market's a weighing machine, much more accurate. It's going to tell you what something's worth. And so if you can divine what something's worth, then you can really take advantage of the market because it's really here to help you. And that's kind of the message of the book.
Yeah, speculation is just a bit like buying, trading crypto, right? Strong words. Well, short-term trading crypto. Maybe in the long run, there's intrinsic value. But many investors in a bubble going into the crash were really just pure speculators. They didn't know what things were worth. They just knew they were going up. That's speculation.
And investing is doing your homework, digging down, understanding a business, understanding the competitive dynamics of an industry, understanding what management's going to do, understanding what price you're going to pay. The value of anything, I would say, other than love, let's say, is the present value of the cash you can take out of it over its life.
Now, some people think about love that way, but it's not the right way to think about love. Investing is about basically building a model of what this business is going to produce over its lifetime.
The value of a security is the present value of the cash you can take out of it over its life. So if you think about a bond, a bond pays a 5% coupon interest rate. You get that, let's say, every year or twice a year, split in half. And it's very predictable. And if it's a U.S. government bond, you know you're going to get it. So that's a pretty easy thing to value.
A stock is an interest in a business. It's like owning a piece of a company. And a business, a profitable one, is like a bond in that it generates these coupons or these earnings or cash flow every year. The difference with a stock and a bond is that the bond, it's a contract. You know what you're going to get as long as they don't go bankrupt in default.
With a stock, you have to make predictions about the business. How many widgets are going to sell this year? How many are going to sell next year? What are the costs going to be? How much of the money that they generate do they need to reinvest in the business to keep the business going? And that's more complicated.
But, you know, what we do is we try to find businesses where, with a very high degree of confidence, we know what those cash flows are going to be for a very long time. And there are very few businesses that you can have a really high degree of certainty about. And as a result, you know, many investments are speculations because it's really very difficult to predict the future.
So what we do for a living, what I do for a living, is find those rare companies that you can kind of predict what they're going to look like over a very long period of time.
So every consumer has a view on different brands and different companies. And what we look for are sort of these non-disruptible businesses, a business where you can kind of close your eyes, stock market shuts for a decade, and you know that 10 years from now, it's going to be a more valuable, more profitable company. So we own a business called Universal Music Group.
It's in the business of helping artists become global artists, sort of the recorded music business. And it's in the business of, you know, owning rights to sort of the music publishing rights of songwriters. And, you know, I think music is forever, right? Music is a many thousand year old part of the human experience. And I think it will be, you know, thousands of years from now.
And so that's a pretty good backdrop to invest in a company. And the company basically owns a third of the global recorded music. That's, you know, the most dominant sort of market share in the business. They're the best at taking an artist who's 18 years old, who's got a great voice and has started to get a presence on YouTube and Instagram and helping that artist become successful.
And that's a unique talent. And the result is the best artists in the world want to come work for them. But they also have this incredible library of, you know, the Beatles, the Rolling Stone, U2, et cetera.
So, and then if you think about what music has become, used to be about records and CDs and, you know, eight track tapes for those of whom, and it was about a new format and that's how they drive sales. And it's become a business, which is like the podcast business about streaming. And you can, streaming is a lot more predictable than selling records, right?
You can sort of say, okay, how many people have smartphones? How many people are going to have smartphones next year? There's a kind of global penetration over time of smartphones. You pay, call it 10, 11 bucks a month for a subscription or less for a family plan. And you can kind of build a model of what the world looks like and predict, you know, the growth of the streaming business.
You predict what kind of market share Universal is going to have over time. And you can't get to a precise view of value. You can get to an approximation. And the key is to buy at a price that represents a big discount to that approximation. And that gets back to Ben Graham. Ben Graham was about what he called, he invented this concept of margin of safety.
You want to buy a company at a price that if you're wrong about what you think it's worth, and it turns out to be worth 30% less, you paid a deep enough discount to your estimate that you're still okay. It's about investing. A big part of investing is not losing money. If you can avoid losing money and then have a few great hits, you can do very, very well over time.
future is completely different from the present and how well this company will be able to like surf the wave of that sure and they've had to surf a lot of waves and actually the music business peaked the last time in like the late 90s or 2000 time frame and that really innovation napster digitization of music almost killed the industry and universal really led an effort to save the industry and actually made an early deal with uh spotify that enabled
you know, the industry to really recover. And so by virtue of their market position and their credibility and their willingness to kind of adopt new technologies, they've kept their position. Now they of course had this huge advantage because I think the Beatles are forever. I think U2 is forever. I think Rolling Stones are forever.
So they had a nice base of assets that were important and I think will forever be. Forever is a long time. But, you know, again, there are all kinds of risks in every business. This is one that I think has a very high degree of persistence. And I can't envision a world where beyond streaming, in a sense. Now, you may have a Neuralink chip in your head instead of a phone. Right.
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