Why is Bill Ackman hated so much?
Been seeing his name pop up recently a ton on CNBC. The only thing I know about him is the $1 billion HLF short he had (HLF went up $6 today and they brought him up). I also saw the CEO of ADP talking a bit about him, seems like Ackman was trying to reserve seats on a board ahead of time or something. Ackman has donated a ton of money to Jewish organizations and has done other philanthropic work. But are there any specific reasons why the Street hates Ackman?
Well if you're long a stock he happens you suddenly short and distort you're gonna be pissed because it'll wipe out your gains until he exits. Lately his bark is worse than his bite.
Also good looking, wealthy, pedigree, smart. Everything average people hate
How is he smart? He sucks at investing and most people know it. The only reason he's been able to raise and maintain funds is due to personal connections -- not performance.
Smart doesn't always equal returns in investing.
For example, it's pretty safe to say Herbalife was/is a pyramid scheme, but they are retooling and the market is waiting to see. There are a lot of other factors.
His shorts are bascially the opposite of angel investing, you find a good idea, do all the market research and vetting, but sometimes it just doesn't happen.
Went to a good school so he's perceived smart. I don't think he's all he's cracked up to be
Sucks at investing how? His fund (since inception) is still beating the S&P 500.
He's kind of douchey imo.
Seems extremely arrogant without the charming part (how you can get away with being arrogant).
It's the hair, hands down. I follow that shit on twitter.
agree
I think haughty would be the appropriate word.
I like the guy. Confidence Game was a good book and he's right about Herbalife in that it's a scam company. Whether his short pays off is another thing, but he's not wrong about the company. Fuck MLM pyramid schemes.
I don't understand why HLF and other MLMs haven't been shut down. Since they call it MLM I assume they can just walk.
https://www.vanityfair.com/news/2013/02/bill-ackman-daniel-loeb-bike-ri…
As a rather telling side note to this conversation, he has a YouTube video through the floating university titled, "William Ackman: Everything You Need to Know About Finance and Investing in Under an Hour". This video is what got me into finance, it was all downhill from there haha.
That video is gold. I watched it like 3 times before I started investing. Now I know how to finance a lemonade stand!
lol
The story of Bill Ackman vs HLF is how I began to get serious about a finance career. It got me interested in learning what HF activism is, one thing led to another, and I was already deep in researching how to break into IB.
I have followed him with great interest since, both through his peak in late 2014 and the rock bottom he hit with Valeant. I idolized him for some time, but not anymore to be honest. I kind of like how he goes on his crusades from time to time (HLF and MBIA) but I think that his excessive stubbornness and overconfidence are to blame for his downfall. Overall, I think he's a very smart guy, but was very fortunate to have had the support of his rich family and solid connections. Things are much simpler when you have such a safety net in life.
I agree that he can be stubborn and over confident; however, I think sometimes the cards are stacked against him.
The narrative for most companies that people want to believe is that they will increase in value. Though I believe HLF use to be a pyramid scheme, the government allowed them to retool their company as opposed to condemning them. It's kinda like when a student at school messes up, the principal would rather give them detention then outright expel them.
.
How far down can Bill Ackman go? (Originally Posted: 07/31/2013)
George Soros has taken a long position in Herbalife and the stock is rising rapidly. Apparently, it is one of his top three positions.
$300 million loss was the last report. Here comes $400 million!
Down goes Ackman! Down goes Ackman!
Doesn't seem to matter, just raised another multi-billion dollar single stock fund for investing in Air Products International. Guess investors are hoping he can recreate his success with the last single stock fund he had in Target. Oh wait...
The truth comes out Monday when they report earnings. It is crazy how easily he raised money though considering recent performance and even recent attitude.
I wonder who were the LPs in this Air Products gamble. Anyone here can shed some lights?
How was Pershing's performance for June/July?
When people complain that speculation is bad for markets, HLF is a good example. Fortunately one hedge fund is screwing another and this stock doesn't really effect the real economy.
I hate HLF and can't fathom how people can be on the long-side of a potential fraud. That said, I will stay away from it b.c. these guys are bringing it away from its intrinsic value.
What a good leftist, Soros is trying to make money off of a company that exploits minorities (such as a lot of Latino communities) by making them pay out the ass for powder they don't need. I don't expect to win but I am sooo rooting for Ackman.
SFM (I.e Scott Bessent) has initiated a long position. Not Soros himself. Big difference.
He is losing with JCP too, isnt he?
Not that I'm an Ackman fan but I'll balance out the discussion by pointing out PSCM is still up 5-6pct for the year despite the high profile misfires.
He's still up something like 8% YTD (due to Canadian Pacific Railway I think) which means he hasn't gone down nearly as much as someone like Paulson and his bet with gold.
Still pretty horrible when the S&P is up ~20% ytd.. and no bs management and performance fees
the 5 - 6% is net of fees, and most funds are underperforming SPX this year by a wide margin, especially long / short equity. Logically you should underperform when markets are going up, and outperform when they are going down. 5 - 6% is bad but everybody has years where they underperform, I don't think you can condemn the guy based on a run of underperformance. (Caveat, no idea what his historical numbers are but I assume they must be alright)
Keep in mind though Paulson's gold fund is like 2% of AUM, his other funds are doing pretty well. His real estate recovery fund is crushing it.
Idk, most HFs are supposed to share on the upside (albeit in absolute terms yet it remains important to track major indexes) while limiting the downside... and potentially gaining during a bear market in some asset class. Underperforming equities by 15% is unacceptable, especially considering that equities are not overvalued (based on historical P/E).
Off topic, but the days of Soros, Steindhardt, Robertson returns in their primes compounded for a decade appear to have disappeared. And I'm skeptical about the "markets became more inefficient" or "the global paradigm shift opportunities will never appear again" arguments. That may be true of RV or whatever "arbitrage" opportunities but a crowded market shouldn't necessarily impact global macro or long/short equity funds. As an industry I recall that HFs manage something like $3T, a figure that is less than SWFs and significantly less than the mutual fund industry. Now add in governments and central banks and HFs are still a rather small player in the markets (perhaps not for individual stocks but for asset classes as a whole). I don't understand the appeal of HFs anymore considering their fees and lack of alpha. Many seem like asset hoarders content with returning benchmark figures, and some can't even do that. And aren't HF returns becoming increasingly more correlated to the S&P?
Another frustrating point is that most HFs appear to have reversed the symmetry of risk... they're now skewed in favor of the downside. When you read interviews of successful PMs from the 1980s & 1990s they're all about cutting their loses and riding their winners. Now it seems that most HFs take crazy tail risks, risking blowing up, in the face of small profits ... call it eat like chickens and sh1t like elephants if you will. And from the people that I know in the industry, their firms all appear biased to RV type opportunities. I actually support the HF model because of the flexibility that it provides but would feel more comfortable investing money at a $500M fund than a $5B one, as the former would be more inclined for alpha provided that they had adequate risk management measures. And from 2/20 it should be something like 1/10. Opportunities aren't crowded but the participants are bloated, and more competition should reduce fees. And the PMs of this era can have this to be said about them... Steve Cohen = insider trader, Griffin = 50% drawdown, Paulson = one hit wonder (w/ awful followup investments in gold and BAC). Respect to David Shaw and James Simons though.
endoflunchtimerant
Aside from HLF, I just want to say how hilarious OP's picture is for this post. If only we could photoshop on Ackman's face...
The s&p underperformance argument is a bit redundant because it's just a function of how net long you are
Could you please explain this? I understand that many asset managers are long only and hence bench-marked to the S&P or some other index - but how would you go about then evaluating an HF's performance if not comparing it to an index?
double post sorry
No perfect way of doing this, you can look at beta and sharpe (very imperfect though), some ls shops just run very low vol (let's say beta 0.3) high single digit return targets, 6pc post fees when sp is up 20pc isnt a disaster for these guys.
"b.c. these guys are bringing it away from its intrinsic value" - this to me would present investment opportunity. If you have a view on the intrinsic value of the company and the market price is moving away from such, this should be a reason to put capital to work, not stay away.
Some funs, yes, but Pershing Square is very much not one of those funds
I'll check it out. Hempton is long HLF though right?
He has some pretty odd views on other companies though...
Soros pulls his money from Pershing Square.
http://finance.yahoo.com/news/soros-fund-withdrawing-money-pershing-185…
Bingo
Doesn't this depend if you're going long or short? If a firm is falling beneath its intrinsic value you can put capital to work and wait it out until the investment reaches intrinsic value again - but shorts don't work the same way due to market mechanics right?
He was underwater for awhile on MBIA too -- these kinds of these take time to play out, and the story isn't over...
Bingo, I wouldn't count him out just yet. But then again, he's never had to be on the other side of the likes of Soros/Icahn
This is the big thing to me. He's not just fighting fundamentals or business flaws right now.
However, as you guys mentioned, these take a long time to play out and it isn't just Ackman (i.e. Einhorn vs. Allied Capital).
Short Ackman
Earum et odit voluptates esse in sit. Numquam nobis dolores hic earum molestiae consequuntur. Atque tempora eum voluptatem. Est perferendis veritatis odit quaerat. Natus nostrum rem aut ut hic.
Occaecati nisi iusto pariatur deleniti. Sed illum alias voluptate unde. Omnis ea id consequatur in voluptatem voluptatem. Et repudiandae sed sint magnam dolor. Consectetur reiciendis tempore sed nemo in consequatur vel.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Eius officiis recusandae voluptates et. Id tempore aut voluptas accusamus. Qui ad ea consequatur minima aliquam ut et. Maxime et rerum et incidunt incidunt. Temporibus optio voluptatem sit et ab eius animi.
Accusantium rerum ullam ut culpa provident non aut. Dolor molestias inventore velit reiciendis. Voluptates quo autem doloremque molestias incidunt eos.
Autem doloribus corporis nobis sed corporis. Cumque et iusto dolor non omnis atque sit sequi. Quae eos repellat eos corrupti. Est praesentium ea saepe consequuntur.
Et voluptatem dolor ab quaerat facere eos. Culpa in quidem dolorum explicabo molestias pariatur libero dolorem. Rerum error accusantium illo quia magni natus eos. Tenetur quidem id ducimus placeat quod aut tempora ut. Perspiciatis animi aliquam totam dolor aut repellat. Corrupti non nobis alias nostrum ut dolor et. Iste aliquid sint qui laboriosam culpa aut.
Cupiditate ut tenetur excepturi iure saepe velit ut. Porro est molestiae molestiae quia et tempore dolor.
Tempora vel et consequuntur aut aut similique unde. Qui qui consequuntur quos ut similique doloremque consectetur illo. Maxime ducimus voluptatem quas molestias. Cumque aut iste porro vel id omnis. Ut dolorem et illum dolorem quis ut aut.