Bill Ackman on His Investing Playbook, His Bullish and Bearish Bets, and What Could Trigger the Next 2008

Bill Ackman highlights AI as the dominant force shaping entrepreneurship, economic transformation, and new opportunities across technology and infrastructure sectors.

Ai Fuels Entrepreneurial Growth and Economic Transformation Across Sectors

AI is driving a surge in entrepreneurship by democratizing access to intelligence. Ackman notes that tools like Google provide access to information and power at virtually no cost, enabling a broader set of people to participate in innovation and business creation. This widespread adoption of AI facilitates rapid change across sectors, from established tech firms to new startups.

Ackman describes a massive infrastructure build associated with AI’s rise, with some of the world’s largest companies racing to construct super-intelligent models. This competition has led to a land rush for space to build data centers, acquisition of GPUs, memory systems, and other computing resources that are integral to modern AI. Asset managers and real estate firms such as Brookfield stand to benefit as more capital flows into building and powering these data centers and associated infrastructure.

Although some fear AI’s potential to disrupt and eliminate jobs, Ackman views it as a major driver of economic and job growth. He argues that workers need to learn to use AI tools to adapt and thrive in this transformed labor market. The technological shift necessitates new skills and an understanding of how to leverage AI for both individual and collective economic benefit.

Ai Firms' Ipos: Diverse Opportunities and Risks

The rapid AI expansion is mirrored in the investment landscape, especially as AI companies prepare for or pursue IPOs. There are substantial opportunities and risks depending on a company's business model, profitability, and assets.

Ackman identifies Anthropic as a leader in frontier models and notes its recent achievement of profitability, which is impressive in a sector where scale and losses are common. In contrast, OpenAI faces predictions of significant losses for the foreseeable future, with the added challenge that continually improving open-source models may commoditize AI, offering similar capabilities at lower or no cost and threatening the premium positioning of frontier model companies.

SpaceX, he observes, holds a uniquely valuable collection of assets, such as the h ...

Bill Ackman outlines a disciplined investment philosophy focused on finding durable, high-quality businesses that reliably generate cash flows and compound wealth over the years. His approach emphasizes early, consistent investment in market leaders, portfolio concentration, and deep engagement with portfolio companies.

Wealth Building Requires Identifying Durable Businesses Generating Consistent Cash Flows Over Time

Intrinsic Value Tied To Present Value of Future Cash, Highlighting Importance of Long-Term Predictability and Competitive Durability

Ackman stresses that the value of any business rests on the present value of cash generated throughout its life. He likens businesses to a type of bond, where the “coupon” is unknown and must be estimated. When analyzing companies, their earnings yield, calculated as the reciprocal of the price-to-earnings ratio, is fundamental. Investors must determine not only the current yield but also whether it will grow and endure, or if the business risks disruption. Predictability and the likelihood that a company will withstand competitive threats are key to long-term value.

Ackman insists on businesses with dominant market positions, minimal leverage, and clear long-term viability. He cautions against chasing what is popular in the short term, advocating instead for ownership of companies robust enough to be held for decades—even if the market were to close for 10 years.

Focus On Companies With Dominant Markets and Low Risk

Ackman explains that narrowing the universe to highly predictable, dominant companies enables earning above bond-like returns with minimized risk. These companies, which rarely use much financial leverage and consistently make sound decisions, can be held through volatility with confidence in long-term outperformance.

Compounding Boosts Wealth; Early, Consistent Investment Outperforms Delayed or Intermittent Investing Over Time

The power of compounding is central to Ackman’s philosophy. He references historical examples like Berkshire Hathaway, whose early investors became millionaires not through rapid appreciation, but through steady, compounding value over decades. Starting early and investing consistently—putting money aside every month for the long term—yields significantly greater wealth over 10, 20, or 30 years than waiting or making sporadic investments.

Pershing Square's Portfolio: 12-15 Quality, Durable Investments

Portfolio Prioritizes Proven Companies Like Microsoft, Amazon, Meta, and Uber Over Speculative Opportunities

Ackman’s firm, Pershing Square, maintains a concentrated portfolio of 12-15 holdings, prioritizing companies with proven track records and powerful competitive advantages. Standouts include Microsoft, Amazon, Meta, and Uber—businesses admired for years but only purchased when valuations became attractive. These are market leaders growing faster and commanding higher quality than their counterparts from two decades ago.

Balancing Business Quality and Valuation Requires Selling Strong Companies Like Alphabet When Forward Returns Fall Below Thresholds

Investment decisions balance business quality and price. Sometimes, even exceptional companies like Alphabet (Google) are sold if their share prices rise to a point where projected returns no longer surpass the investment threshold, allowing for redeployment into more promising opportunities such as Microsoft. The aim is always to maximize compounded returns over 3-5 years by aligning business fundamentals with value.

Focused Approach Enables Deep Involvement With Portfolio Companies, Including Board Participation and Strategic Guidance to Enhance Value Creation

A tight portfolio allows deep engagement with each company. Ackman notes that Pershing Square sometimes joins co ...

Bill Ackman highlights how excessive leverage and systemic risk in financial markets heighten vulnerability to shocks, emphasizing crisis prevention through disciplined investing and robust liquidity management.

Excessive Leverage Creates Vulnerability to Market Shocks and Forced Selling That Devastates Investors

Ackman warns that widespread use of leverage among both professional and retail investors poses the greatest risk to markets. He observes "a ton of speculation" and notes that "there's a huge amount of leverage being used by professional investors, by retail investors." This interconnected risk means a negative external event could trigger a wave of panic selling.

Professional Investors' High Borrowing Creates Interconnected Risks, Triggering Distressed Sales From Margin Calls

Ackman explains that leveraged players are exposed to margin calls when asset prices fall, with forced liquidations further driving down prices. For example, if an investor holds a dollar in stocks but borrows 50 cents against it, a 20–30% market decline forces the investor to post more collateral or sell assets at the worst possible time. As more leveraged investors are forced to liquidate, prices can spiral downward in a cascading effect, amplifying market downturns.

Using Margin Debt Sacrifices Investors' Ability to Survive Market Volatility, Potentially Forcing Asset Sales At Market Bottoms When Prices Offer Best Value

Ackman stresses that margin debt endangers investors’ ability to weather volatility. He warns, "If you've got a margin debt, you're gonna get wiped out or you're going to have to sell at the bottom," exactly when stocks often offer the best long-term value. Margin borrowing forces asset sales during market troughs, locking in severe losses instead of enabling intelligent, opportunistic buying.

Leveraged Investors Lose Wealth Disproportionately In Downturns, Exemplified by Carl Icahn's Significant Loss From a Sharply Declining Leveraged Position

Ackman cites Carl Icahn as a cautionary example. Icahn, once worth $20 billion, saw his net worth drop to $3–4 billion after his highly-leveraged stock holdings collapsed. Ackman notes, "Rich people become a lot less rich when they do [borrow against their assets] sometimes. So rich people can lose a lot of money using marginal average." Leverage dramatically increases downside risk for even the most seasoned and wealthy investors.

Resilient Investors: Unlevered Portfolios and Opportunistic Capital Deployment

Ackman advises maintaining unlevered portfolios and holding liquidity to benefit when market disruptions create rare buying opportunities. "The key to being a successful long term investor is being able to survive those kind of challenging market periods when everyone else is panicking. In fact, you want to have money to invest when others are panicking."

Profitable Periods For Pershing Square Arose From Market Disruptions, Utilizing Hedged Risk Positions and Capital for Opportunistic Investments During Panic Conditions

Ackman credits much of his firm's profits over 20 years to hedged risk positions and the ability to deploy capital when the market was "blowing up." This approach relies on staying solvent and liquid during crises—a benefit leveraged investors forfeit.

Borrowing Against Assets For Consumption or Leverage Risks Permanent Wealth Loss via Forced Liquidation

Using margin or borrowing against assets for consumption or leverage risks permanent destruction of wealth, as the prospect of forced liquidation in adverse conditions can turn a temporary paper loss into a lasting and catastroph ...

Bill Ackman and Nicole Lapin emphasize disciplined, tax-efficient, and long-term investment habits as the best path for investors, especially young ones, to build sustainable wealth and secure retirement. They warn against the allure of speculation and advocate for focusing on investing fundamentals and tax strategies that maximize long-term gains.

Young Investors Should Prioritize Automatic Investments in Retirement Accounts Over Quick Profits

Ackman stresses the importance of young investors starting early with investing, citing the enormous advantage of compound growth over long periods. Even small, regular investments harness the power of compounding to accumulate significant wealth by retirement. He acknowledges the discipline required for young people to set aside money when many are tempted to spend on present needs and wants but insists this sacrifice pays enormous dividends over decades.

He recommends using tax-advantaged vehicles such as IRAs, Roth IRAs, and Trump savings accounts—the latter recently introduced by government policy—which allow money to compound tax-free. Most Americans with access to an employer-sponsored plan, like a 401(k), should opt-in and automate contributions. Ackman highlights the ideal system as one where employees are automatically enrolled with a portion of their income invested unless they opt out, ensuring steady and disciplined savings and investment in the stock market.

When employer-sponsored plans are unavailable, Ackman urges individuals to open an IRA or Trump account on their own. He argues that avoiding taxes legally by using these accounts is one of the most powerful wealth-building strategies available to ordinary investors. Automatic, monthly contributions ensure regularity, take advantage of dollar-cost averaging, and eliminate the need to time the market.

He points out that investors do not need to outperform the market by picking individual stocks; broadly diversified market accounts often do better than chasing after high-flying, short-term opportunities. For those with the skills and time, picking stocks is possible, but for most, automatic investment in broad, diversified portfolios is optimal.

Avoiding Leverage, Speculation, and Gambling Protects Capital for Long-Term Wealth Building

Ackman warns strongly against confusing speculative activities with investing. He criticizes the recent trend of one-day options trading, likening it to gambling rather than genuine investing, since nobody can consistently predict short-term stock price moves. He says the odds are stacked against the individual, and participation is more akin to games of chance than long-term wealth-building.

He cautions against gold and cryptocurrencies for similar reasons: they generate no yield, are only worth what others will pay, and function as speculation rather than investment. Instead, Ackman invests in assets that deliver real earnings, rents, or dividends.

He believes sports betting and prediction market speculation are capital destroying except for those with substantial expertise or edge—something most lack. Ackman warns young people, in particular, about wasting capital on sports betting, emphasizing never to wager money that is needed for living expenses.

Leverage, such as buying on margin, is discouraged due to the risk of catastrophic losses during downturns. Ackman promotes the mindset of protecting capital by avoiding these hazards, focusing on steady, proven wealth accumulation instead.

Investment Success Hinges On Identifying Quality Companies At Reasonable Valuations Emphasizing Fundamentals Over Momentum

For those choosing to pick stocks, Ackman recommends investing in companies with exceptional quality, strong customer loyalty, and unique advantages that cannot easily be replicated. He prefers businesses that are dominant in their industry, do not rely heavily on financial leverage, and can be expected to grow much larger ove ...

Nyc's Economic Challenges: Policies Deter Business Investment, Ignore Structural Inefficiencies

Bill Ackman criticizes current New York City policies for discouraging business investment and failing to address deep-rooted structural inefficiencies. He points out that New York City spends substantially more per resident than almost any other city globally but gets less in return, attributing this to enormous waste and fraud rather than a shortage of revenue. Ackman believes the city faces an efficiency and waste problem, not a revenue problem.

Rent Control and Price-Fixing Discourage Developer Investment, Exacerbating Housing Shortages

Ackman argues that rent control and price-fixing policies, such as freezing rents for a large portion of city renters, drive up prices for others. In buildings with both rent-stabilized and free-market units, rent freezes benefit some tenants, forcing landlords to raise rents for market-rate tenants to cover inflated costs. This system, according to Ackman, is fundamentally unfair and serves to discourage new development. Instead of increasing supply to lower rents, the city adopts measures that have the opposite effect and deter risk-taking developers from investing, diminishing the attractiveness of New York as an environment for landlords.

Redistributive Policies Over Supply-Side Solutions Create Perverse Incentives, Benefiting Some Renters While Others Bear Costs, Reducing Market Efficiency

Ackman criticizes redistributive approaches employed by city leadership. By prioritizing rent freezes and similar measures, these policies create perverse incentives: some renters enjoy artificial cost protections while others shoulder increased burdens, both in costs and in limited availability. Ackman asserts that true progress comes from boosting housing supply and implementing straightforward regulations and incentives rather than relying on price controls and redistribution, which distort the market and hinder efficiency.

City's High Per-capita Spending Reflects Waste and Inefficiency Not Revenue Shortage

Ackman highlights that despite the city's record-high $125 billion budget, the mayor's claim of balance is misleading, as it was achieved with external funding and deferred liabilities. He argues that the city's excessive per-capita spending is a sign of inefficiency and waste, not a lack of revenue.

Leaders Move From New York To Cities With Better Taxes and Regulations, Especially Miami

Investment Managers and Entrepreneurs Move Capital and Presence To Miami and Business-Friendly States

Ackman emphasizes that prominent figures such as Ken Griffin, who drive significant economic value, are leaving New York for cities with more favorable policies like Miami. Miami’s business-friendly tax environment, regulations, and appealing climate attract investment managers and entrepreneurs, leading to a migration of capital and business presence.

Capital Provider and Business Leader Departures Diminish New York's Tax Base and Economy, Boost Rival Cities

The departure of business leaders and investors weakens New York’s tax base and economy. This shift benefits rival cities like Miami, which become more appealing as they attract capital, investment, and talent that once contributed to New York. Ackman notes that such losses are disastrous for New York City, especially since city revenues depend on the economic activity generated by high-value residents.

Municipal Leadership Hindered Community Cohesion and Business Engagement Through Policies

Ackman asserts that current municipal leadership has not helped bring the community together or engaged businesses effectively. As an example, he mentions the exclusion of Little Italy from a recent map of immigrant populations, which he considers damaging to New York's sense of community.

Socialist and Marxist Approaches Misguided For Housing and Income Inequality Solutions

Examples of Planned Economies Causing Catastrophic Outcomes

Ackman warns against adopting socialist or Marxist economic strategies, citing historical examples where planned economies resulted in catast ...