Well, those rate rises are finally here - but so are the readjustments to his holdings. That is why I believe that the sooner and more aggressively the Fed raises rates to subdue inflation. Uncertainty is the enemy of markets particularly in the short term.
Bill ackman series#
He's been hedging on rate hikes since late 2020 but in a series of tweets, Ackman argued the Federal Reserve has not been aggressive enough in addressing rampant inflation. One last thing to note is that Ackman has been banging the drum on interest rates. His losing trade on Netflix was well publicised but it turns out that his high-risk strategy isn't paying dividends in a world where equity valuations have come crashing back down to Earth. While Ackman has certainly had his victories, he's also on a losing streak. But don't be fooled by the small weighting - Ackman's history with the company goes as far back as 2011 when he managed to replace most of the Canadian Pacific board over balance sheet claims. He is also the company's chairman and through Pershing Square, owns more than a quarter of the business.įinally, and for something completely different, he owns a minority stake in Canadian Pacific Railway (TSE: CP). Keeping with the real estate theme, Ackman is a large backer of Dallas-based real estate developer Howard Hughes International (NYSE: HHC). He argues independent hotels have been forced to seek affiliation with global brands like Hilton, due to the pandemic. (Source: Trading View)īeyond food, Ackman owns nearly 5% of Hilton Hotels (NYSE: HLT) - saying the pandemic hasn't actually derailed travel. I'm sensing a trend among Ackman's investments when it comes to performance. Because of the US housing boom, the company's revenues hit an all-time high in 2021. Unfortunately for him Lowe's has continued to track south since the selling. Ackman has been building the position since 2018 - betting the retailer can outlast its other major competitor Home Depot.
Let's move now to his other big bets - including the home improvement retailer Lowe's (NYSE:LOW).Īckman reduced his position in Lowe's during the first quarter by about US$580 million. Netflix was nowhere near Ackman's largest position, though the press around his position in the streaming giant made it sound like it. Unfortunately, the gamble cost Pershing Square Capital US$400 million. That is why we did so here.Īnd so he did. One of our learnings from past mistakes is to act promptly when we discover new information about an investment that is inconsistent with our original thesis. While we believe these business model changes are sensible, it is extremely difficult to predict their impact on the company’s long-term subscriber growth, future revenues, operating margins, and capital intensity. In his final letter on the subject, Ackman noted that the problem was not in management - but rather management's potential pivot. The above chart ends when Ackman sold his stake. Nasdaq 100 v Netflix's individual share price. He also noted (rather awkwardly) that Netflix had the potential to deliver serious, long-term profits for the fund. The 3.1 million share purchase also made him a top-20 shareholder in the company.Īccording to the Financial Times, citing his letter to investors, Ackman said he was attracted to Netflix because of the scale of its streaming business, which he said had the potential to attract subscribers and charge them higher prices. The most well-known of these is the one we've just mentioned - Netflix (NASDAQ:NFLX).Īckman bought a US$1.1 billion stake in Netflix as he sought to capitalise on the company's then-sharp selloff. Of his seven positions, six of them were bought in the last quarter with not a single sell. How has that all-or-nothing strategy fared? We're about to find out. and of course, sit on cash until you find the perfect investment.
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