How the 'single best trade of all time' netted 1 investor a $2.6 billion profit
Bill Ackman had a hunch back in February that the coronavirus pandemic would have a greater impact on the stock market than investors were pricing in, so he essentially made a wager that the bubble would burst and started setting up a $27 million hedge.
The Pershing Square hedge-fund manager then watched as the virus spread and the market tanked, turning his small bearish bet into a $2.6-billion winner.In an op-ed for the New York Times, author and former investment banker, William Cohan called Ackman’s move perhaps “the single best trade of all time.”“We said, ‘you know what we’ve got this massive position...
At that point, Ackman explained, he got out with his tidy profit and started buying stocks. He then invested more than $3 billion in risk assets, a move that also proved prescient as the Fed started pumping money into the system and stocks rallied hard off the coronavirus bottom.Aside from dishing on his big windfall, the billionaire said he admires Tesla’s Elon Musk but questioned whether he should perhaps lay off Twitter TWTR, +6.98% for awhile.
“I don’t know that Elon Musk has been the ideal public company CEO,” Ackman said on the podcast. “He had a challenging period there with his tweets.”Ackman also talked about Warren Buffett and how Berkshire Hathaway BRK.A, +2.42% likely bought back its own shares as well as other stocks during the market drop.
“I’m surprised they haven’t done anything yet that’s visible, but my guess is they’ve been buying stocks a lot,” he told host Shane Parrish. “The big opportunity for Berkshire is Berkshire itself.” div.youtube { height:0; position:relative; padding-bottom:56.25%; } div.youtube > iframe { position: absolute; left: 0; top: 0; width: 100%; height: 100%; }
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