Bill Ackman: Investment Strategy, What the Market is Missing, How AI Breaks Businesses
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What changes has Bill Ackman made to his investment philosophy over the years?
One of the most provocative and interesting investors in the country.
A legendary activist investor.
Pershing Square CEO and founder, Bill Ackman.
Taking a short position and going public with it is a pretty serious business.
How does AI represent both an opportunity and a threat to investors?
Interestingly, some of the best businesses in the world are trading at the lowest multiples. We're kind of the rebirth of the closed-end investment company universe.
What did you think of Zara, the CEO of OpenAI?
What is the 'rubber band effect' in predicting market moves?
I'm sorry, CFO. Felt like the CEO.
Yeah, I was... Stop with that stuff. Actually, I was super impressed. Made me a lot more bullish on OpenAI. And I thought she should be CEO of OpenAI. That's what I thought. I think Sam should be chair.
There was a question I wanted to ask her that we didn't get time, which was, what's it like working with Sam?
Why is investing in founder-led companies important according to Bill Ackman?
I mean, that could have been like three hours in the documentary.
I wanted to kick this off. So thank you so much for being here.
What strategies are involved in building the next Berkshire Hathaway?
We've tried a number of times to get you to all in, and it's great to finally have you. You obviously are a legend that doesn't need much of an introduction. Lately, in the last number of, call it years or months or quarters or what have you, it seems like your investment philosophy may be changing. Your model, where you've been an activist and you've entered positions and exited positions, and lately you've talked a lot about more kind of permanent long-term holdings. We'd love to hear a little bit about if that is actually a change and how your evolution and your investment model has kind of changed over time.
Sure. So I would say the biggest change over time is an appreciation for the importance of what we call business quality, long-term, durable, protected, non-disruptible growth. I would say early days, you're a smaller, more liquid investor. You don't have to think as long-term as you become a bigger, concentrated investor.
How does Bill Ackman view the impact of AI on portfolio management?
And over time, you learn the importance of durable kind of growth. That's the most important factor. I would say I'm as... activist as I've ever been. But more of it's on Twitter than I would say in the corporate context. And the reason for that is when I started in Pershing Square, no one sort of knew who we were. And so actually one of our first investments was Wendy's International.
What role does business model quality play in evaluating investments?
Wendy's owned Tim Hortons, the Canadian coffee and donut chain. And the value of Tim Hortons was more than the entire value of Wendy's. So we had this very simple idea. Buy Wendy's, spin off Tim Hortons, double our money. And we bought 10% of the company, and I called the CEO, and he didn't return my call. And I called him again, he didn't return my call. I literally couldn't get a return phone call from the beginning. So we actually called a friend who worked at Blackstone, and Steve Schwartzman agreed to write a fairness opinion on what Wendy's would be worth if we spun off Tim Hortons. We kind of mailed it in and filed it publicly, and six weeks later, they spun off Tim Hortons. And then the CEO finally called me back, and he thanked me.
And he had gotten fired, but he thanked me because he had a huge exit package. I was very happy. But so in the beginning, we couldn't get a return phone call. So we had to and we were small. So we had to go to a conference and we had to do presentations and go on CNBC. What happens over time is you join boards of directors and become known as an investor. You know, we're kind of a constructive shareholder. I know pretty much every CEO in S&P 500 either directly or one person removed. And maybe I've aged a bit, but you build kind of a reputation. And today we buy a stake in a company. Sometimes they'll put out a tweet saying, we welcome Pershing Square as a shareholder, but they opened the door for us.
In the beginning, we had to bang down the door. And today, so we get very deeply involved in our companies if it's needed. Other companies we own, there's nothing for us to do, just be to just clap.
So you aren't considered a value-add investor?
Yeah, but we only want to add value. The conversation last night was kind of an interesting one.
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Chapters
8 chapters
1
What changes has Bill Ackman made to his investment philosophy over the years?
0:00–0:14
2
How does AI represent both an opportunity and a threat to investors?
0:14–0:25
3
What is the 'rubber band effect' in predicting market moves?
0:25–0:47
4
Why is investing in founder-led companies important according to Bill Ackman?
0:47–0:55
5
What strategies are involved in building the next Berkshire Hathaway?
0:55–1:48
6
How does Bill Ackman view the impact of AI on portfolio management?
1:48–2:14
7
What role does business model quality play in evaluating investments?
2:14–10:15
8
How has social media changed the dynamics of market influence?
10:15–29:42
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