Bill Ackman's 13 Investing Lessons

I share in this video Bill Ackman's 13 Investing Lessons. My full interview with Bill Ackman of Pershing Square originally appeared in my national bestselling book, Market Masters, which is available at Chapters, Indigo, and Coles as well as Costco and Amazon.ca. Buy Market Masters: http://a.co/78lJGFq Visit my blog: http://robinrspeziale.com/blog *** Bill Ackman’s 13 Investing Lessons: 1) “I was a passive investor, and then I saw an opportunity for a company to do something that would create more value, and that made me into a shareholder activist, which wasn’t planned.” 2) “For us the most important thing is what we call ‘business quality.’ We’re looking for a simple, predictable free cash flow generative dominant company.” 3) “The moat is usually created by brands, unique assets, long-term contracts, market position, or perhaps some combination of all of these factors.” 4) “We’ve done a couple of real turnarounds, but in most cases it’s about optimizing a business as opposed to completely transforming it.” 5) “With most of our investments we’re investing in a great business that has perhaps gotten a bloated cost structure, or that has not thought about its business correctly and maybe over-invested in parts of the business or has not allocated capital correctly, or perhaps has lost focus and owns assets it should sell.” 6) “In a market, most stocks are based on people’s estimates of next year’s earnings: analysts’ estimates.” 7) “If there’s one business making $2 billion and another business, or another subsidiary, losing $1 billion, people will look at it and say, ‘Oh, it’s got $1 billion of earnings.’ But that’s not the right way to think about it.” 8) “If you take a more skeptical view, CEO compensation tends to be correlated with the size of the company that you’re running, so you get to be paid more if you’re running a bigger business. You can also justify a bigger airplane.” 9) “[Turnaround strategy:] The key things are, one, finding a good target. A good target is a great business that’s undervalued because of under-management. Two, figuring out and finding the right person to run the company. And then a big part of the execution, which is three, is getting ourselves in a position where we can install that management and have meaningful influence going forward over the company.” 10) “We’ve had a very favourable experience in Canada in pretty much everything we’ve done.” 11) “You can’t necessarily buy at the activists’ price, but once they announce the investment you can invest in it alongside them. And oftentimes stocks don’t go straight up, so there’s an opportunity to buy it again at a cheaper price.” 12) “We’ve avoided businesses that are hard for us to predict with a high degree of confidence.” 13) “I would really encourage people to invest in the highest-quality businesses that they can identify in the market. Make sure you buy them at attractive prices. And hold them for the long term.” *** Visit my blog: http://robinrspeziale.com/blog Enjoy, and Happy investing, Robin R. Speziale National Bestselling Author; Market Masters *** Disclaimer: Robin Speziale is not a registered investment advisor, broker, or dealer. Viewers are advised that the material contained herein should be used solely for informational purposes. This information is not investment advice or a recommendation or solicitation to buy or sell any securities. Robin Speziale does not propose to tell or suggest which investment securities readers should buy or sell. Viewers should conduct their own research and due diligence and obtain professional advice before making investment decisions. Robin Speziale, anyone associated with Robin Speziale, or anyone interviewed in Market Masters, will not be liable for any loss or damage caused by information obtained in Market Masters or n this video. Viewers are solely responsible for their own investment decisions. Investing involves risk, including loss of principal.

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