Bill Ackman Quotes
108 Bill Ackman Quotes
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One of the other things we were able to help with is the CEO’s succession plan. Mike Ullman was in his mid-60s and he was not going to be there forever.
Bill Ackman
[In May 2008.] In the first few years of our existence we made no money on the short side, last year 100% of our profits came from short-selling.
Bill Ackman
[In May 2008.] I think Buffett made the comment that to understand a CDO [Collateralized Debt Obligation] you’ve got to read 750,000 pages of prospectuses – that’s one CDO. A little difficult to figure out.
Bill Ackman
[In May 2008.] When should you listen to a short-seller versus otherwise? I think if you go on a message board and there’s some anonymous guy saying ‘this is garbage’ then that’s not good enough information. But if someone gets up in front of a thousand people, makes a twenty minute presentation you should pay attention to that. And then if someone gets in front of an audience and then after doing so gets investigated for doing so, still stay short but pay attention. And then that person writes a book and commits to giving away 100% of the profits then you should really pay attention.
Bill Ackman
[In May 2008.] What’s good about being a long/short is that you still want good things to happen for America and not be concerned.
Bill Ackman
[In May 2008.] What we do is we look for businesses where we think they are not likely to be materially impacted by extrinsic factors – interest rates go up or down a couple of hundred basis points, oil prices go up $25 a barrel, - we try to find very robust, stable businesses which are only very modestly levered and as a result we don’t need to think particularly ‘top down.’ We don’t need to think about exactly where interest rates are going to be for us to do well. We look for a big discount. If you can buy something for 50 cents in the dollar - yes.
Bill Ackman
[In May 2008.] We don’t think really month to month or quarter to quarter. The value of a business is the present value of the cash you can take out of it over fifty years. The next year is worth month than a year fifty out.
Bill Ackman
[In May 2008.] You should think more about what you’re paying versus what the business is worth. As opposed to what you’re paying versus what they’re going to earn next quarter.
Bill Ackman
[In November 2008.] These are extraordinary times particularly for active participants in the capital markets… We are currently witnessing the greatest deleveraging event in history. What began as a credit bubble bursting has now spread to the equity markets as banks, investment banks, hedge funds, structured products, mutual funds, pension funds, endowments and other leveraged and unleveraged market participants have been forced to liquidate assets by their counterparties, leverage providers, redeeming clients, and as a result of downgrades, other debts or other commitments that need to be funded. These actions have led to forced and indiscriminate selling in security markets around the world, which in turn has caused other investors to panic or simply to sell, to get out of the way of other forced sellers.
Bill Ackman
[In November 2008.] The forced deleveraging that is now taking place in the equity markets is being implemented largely by the prime brokerage firms and margin account managers at broker dealers around the world. Prime brokers are not known to be laggardly in their approach to liquidating an account that no longer meets margin requirements.
Bill Ackman
[In November 2008.] In today’s market, we are finding extraordinary bargains, the kinds of opportunities that are normally associated with market bottoms… While this means that now is likely to be a much better time to be a buyer rather than a seller, it does not mean that the market will not continue to decline, even substantially, from current levels, particularly in the short term.
Bill Ackman
[In November 2008.] We believe that 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.
Bill Ackman
[In November 2008.] Our strategy is to seek to identify businesses and occasionally collections of assets which trade in the public markets for which we can predict with a high degree of confidence their future cashflows – not precisely, but within a reasonable band of outcomes.
Bill Ackman
[In November 2008.] We seek to identify companies which offer a high degree of predictability in their businesses and are relatively immune to extrinsic factors like fluctuations in commodity prices, interest rates, and the economic cycle. Often, we are not capable of predicting a business’ earnings power over an extended period of time. These investments typically end up in the ‘Don’t Know’ pile.
Bill Ackman
[In November 2008.] Because we cannot predict the economic cycles with precision, we look for businesses which are capitalized to withstand difficult economic times or even the normal ups and downs of any business. If we can find such a business and it trades at a deep discount to our estimate of fair value, we have found a potential investment for the portfolio. Next we look for the factors that have led to the business’ undervaluation, and judge – based on our assessment of the company’s governance structure, management team, ownership, and other factors – whether we can effectuate change in order to unlock value.
Bill Ackman
[In November 2008.] Our assessment of the short-term supply and demand for securities plays almost no role in our determining whether to invest capital, long or short. If we believed that it was possible to accurately predict short-term market or individual stock price movements and we had the capability to do so ourselves, we might have a different approach.
Bill Ackman
[In November 2008.] We are always willing to sell an existing holding at a profit or a loss, if we can find a better use for the funds.
Bill Ackman
[In November 2008 on a buying a share in AIG (American International Group) after the announcement of a government bailout at a substantial discount to book value but later deciding it was a mistake.] We ultimately concluded that the return on invested brain damage from this investment exceeded the probability-weighted opportunity for profit, and we decided to fold the tent.
Bill Ackman
[In November 2008.] We do not generally use margin leverage in our investment strategy.
Bill Ackman
[In November 2008.] We have been paranoid about counterparty risk since the inception of the firm.
Bill Ackman
[In November 2008.] Our simple approach to investing also allows us to avoid complicated approaches to risk management. Our investment strategy does not require us to open offices all over the globe. As such, we don’t need traders working around the clock. We can go to sleep at night and sleep. Our weekends are largely our own (Ok. I admit it. I am writing this letter in the office on Sunday.)
Bill Ackman
[In November 2008.] Our risk management approach is to: (1) put our eggs in a few very sturdy baskets, (2) store those baskets in very safe places where they cannot be taken away from us and sold at precisely the wrong time due to margin calls, and (3) to know and track those baskets and their contents very carefully. We call this approach the sleep-at-night approach to risk management. If I can’t, we won’t.
Bill Ackman
[In November 2008 on Pershing Square.] We have worked hard to build a business that can withstand the Great Deluge, and this goes beyond counterparty risk.
Bill Ackman
[In June 2009 on company boards of directors.] While boards are better today than they were a decade ago, they continue to be far from optimal. Many directors depend on the income they receive from serving on boards, and as a result are reluctant to challenge management on strategy, risk-taking, or compensation. Often, they are business, social, and or charitable connections among the directors that reduce their independence or willingness to speak-up. Many CEOs prefer directors with no experience in a company’s principal lines of business because it makes it more difficult for them to challenge the CEO.
Bill Ackman
[In September 2011.] Stocks are cheap.
Bill Ackman
[In December 2011.] The natural tendency is to do the opposite of what makes sense.
Bill Ackman
[In December 2011.] To be a very successful investor you have to be able to avoid some natural human tendencies to follow the herd. The stock market is going down every day your natural tendency is to want to sell. And the stock market is actually going up every day your tendency is to want to buy. So in bubbles you probably should be a seller. In busts you should probably be a buyer. You have to have that kind of a discipline, you have to have a stomach to withstand the volatility of the stock market.
Bill Ackman
[In December 2011.] The key way to have a stomach to withstand the volatility of the stock market is to be secure yourself. You’ve got to feel comfortable you’ve got enough money in the bank that you don’t need what you’ve invested for many years. That’s a key factor. Number 2 you have to recognize that the stock market in the short-term is a voter issue it really represents the whims of people short-term. Stock prices are affected by many things going on in the world that really have nothing to do with the value of certain companies that you invest in. It’s better to just accept the fact that what you own can go down immediately in value after you buy it doesn’t mean that necessarily you’ve made an investing mistake. That’s the nature of the volatility of the stock market. How do you get comfortable? Don’t just buy a stock because you like the name of the company, do your own research – get a good understanding of the company. Make sure it’s a business that you understand. Make sure that the price you pay is reasonable relative to the earnings of the company.
Bill Ackman
[In December 2011.] You want to invest in a business that you could theoretically own forever. If the stock market were to close for ten years you wouldn’t be unhappy.
Bill Ackman
[In December 2011.] You really want a business you can own forever. You don’t want to have to be constantly moving from one business to the next. And what business can you own forever? There’s very few businesses that meet that standard. Maybe a good example is Coca-Cola.
Bill Ackman
[In December 2011.] What’s good about Coca-Cola is that it’s a relatively easy business to understand. You understand how Coke makes money… They sell a formula/syrup to bottlers and to retail establishments and they make a profit every time they serve a Coca-Cola. People are going to drink a lot of Coca-Cola for a very long period of time. The world’s population is growing. They sell in almost every country in the world. Each year people drink a little bit more Coca-Cola. It’s a pretty easy business to understand and it’s also unlikely to be competed away as a result of technology, or some other new product. It’s been around long enough, people have gotten used to the taste. People give it to their children and you can expect it will be around for a long period of time. That’s one good example.
Bill Ackman
[In December 2011.] Try to find a business that you can understand, that’s not particularly complicated, that has a successful long-term track record, makes an attractive profit and can grow over time.
Bill Ackman
[In December 2011.] You want a product to be unique. You don’t want it to be a commodity that everyone else can sell. Because when you sell a commodity – anyone can sell it and they can sell it at a better price and it’s very hard to make a profit doing that.
Bill Ackman
[In December 2011.] If you’re going to be successful in your career you’re going to make some money. And how you invest that money is going to make a big difference in the quality of life that you have, and perhaps that your children have…
Bill Ackman
[In December 2011.] I got interested when I was 22 or 23 in being an investor. I read a book called ‘The Intelligent Investor’ it was written by
Ben Graham. Ben Graham is a famous value investor.
Bill Ackman
[In December 2011 on investing.] What’s kept me intrigued is that it is one of the few jobs where everyday you can study something new. You are constantly learning about new businesses, new situations, new management teams, new issues. So it’s infinitely challenging… The world and the stock market are obviously dynamic places…
Bill Ackman
[In April 2013.] The problem with short-selling is it’s still not accepted as a particularly… American way of investing.
Bill Ackman
[In August 2013.] J.C. Penney is one of the great companies of - part of the history of America. It’s been a struggle, really, for the - it peaked, perhaps, in the late 80s, early 90s and it’s been in decline since then but because of its history it has incredible assets… It’s assets are real estate… It`s got 1,100 stores in a lot of very good locations around the country. It’s got a great brand that’s known by every American. You know, these are assets that are very difficult to replicate and it has a revenue base of customers that come to J.C. Penney.
Bill Ackman
[On Ron Johnson and J.C. Penny in August 2013.] We took a brilliant guy with a lot of creative ideas who have a lot of terrific experience - I mean Ron didn’t just do a great job at - at Apple. He did a fabulous job at Target before that at Mervyns… And he tried to make a lot of very dramatic changes to the company… Probably too fast, too quick. I think that you know retail is a difficult business to begin with. I think that the customer takes time to understand how a business has changed. And we also did it in the public eye, which draws tremendous scrutiny and I think it made it more difficult… I think his ideas are actually fundamentally correct, not all of them, but the big ideas. I mean he’s left us with the best-looking stores we’ve had in many, many years.
Bill Ackman
[In August 2013.] I don’t control J.C. Penney. I’m a large shareholder. I’m one member of the board… The largest stockholder.
Bill Ackman
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