Bill Ackman：市场究竟漏掉了什么

One of the most provocative and interesting investors in the country.

A legendary activist investor.

Pershing Square CEO and founder Bill Ackman.

Taking a short position and going public with it is a pretty serious business. Interestingly, some of the best businesses in the world are trading at the lowest multiples.

We're kind of the rebirth of the closed-end investment company universe.

What did you think of Zara, the CEO of OpenAI?

I'm sorry.

CFO. She felt like the CEO.

Yeah, I was—

Stop with that stuff.

Actually, I was super impressed. She made me a lot more bullish on OpenAI, and I thought—

Right?

I thought she should be CEO of OpenAI.

That's what I thought.

I think Sam should be—I think Sam should be chair. I think he's much better.

A question I wanted to ask her, which we didn't have time to ask, was, "What's it like working with Sam?"

I mean, that could have been the hours in the documentary.

I wanted to kick this off by saying thank you so much for being here. We've tried a number of times to get you on All-In, and it's great to finally have you. You obviously are a legend and don't need much of an introduction. Lately, over the last few years, months, or quarters, it seems like your investment philosophy may be changing. Your model has been activist: You enter positions and exit positions. Lately, you've talked a lot about more permanent, long-term holdings. I would love to hear a little bit about whether that is actually a change and how your investment model has evolved over time.

Sure. I would say the biggest change over time is an appreciation for the importance of what I would call business quality: long-term, durable, protected, non-disruptible growth. In the early days, you're a smaller, more liquid investor, and you don't have to think as long-term. As you become a bigger, more concentrated investor, and over time, you learn the importance of durable growth.

That's the most important factor. I would say I'm as activist as I've ever been, but more of it is on Twitter than it is in the corporate context. The reason for that is that when I started Pershing Square, no one really knew who we were.

One of our first investments was Wendy's International. Wendy's owned Tim Hortons, the Canadian coffee and doughnut chain, and the value of Tim Hortons was more than the entire value of Wendy's. We had this very simple idea: Buy Wendy's, spin off Tim Hortons, and double our money. We bought 10% of the company, and I called the CEO. He didn't return my call. I called him again, and he didn't return my call. I literally couldn't get a return phone call.

That was the beginning. I called a friend who worked at Blackstone, and Steve Schwarzman agreed to write a fairness opinion on what Wendy's would be worth if we spun off Tim Hortons. We mailed it in, filed it publicly, and 6 weeks later, they spun off Tim Hortons.

The CEO finally called me back, and he thanked me. He had gotten fired, but he thanked me because he had a huge exit package and was very happy.

In the beginning, we couldn't get a return phone call, so we had to go to conferences, do presentations, and go on CNBC. What happens over time is that you join boards of directors, you become known as an investor, and you become known as a constructive shareholder.

I know pretty much every CEO in the S&P 500, either directly or one person removed. Maybe I've aged a bit, but you build a reputation. Today, we buy a stake in a company, and sometimes they'll put out a tweet saying, "We welcome Pershing Square as a shareholder," but they open the door for us. In the beginning, we had to bang down the door. Today, we get very deeply involved in our companies if it's needed. Other companies we own have nothing for us to do; we just clap.

So you are considered a value-add investor.

Yeah, but we only want to add value. The conversation last night was an interesting one. The best investments are ones where you don't need to join the board and do anything.

Well, that may be in a startup, but in a mature business, it may be—

No, I think in the public-company context, one of the valuable things we can do is address the problem of being a public company today, which is the very short-term nature of markets, analysts, et cetera. Obviously, to run a business, a good one is a forever thing. You want to make decisions in the context of decades sometimes, or certainly 3 to 5 years.

How can you do that when someone's asking about the tax rate in the second quarter? Having a big shareholder on the board, where you can test ideas out with the big shareholder before you expose them to the public, and where the big shareholder can say, "I'm supportive of this initiative even though it's going to hurt earnings in the next few quarters," is a helpful thing.

I just want to connect this last conversation with Sarah to this. Are you an investor in the AI complex? How do you underwrite business-model quality from what you see on the outside and in the entire complex?

Yes, effectively, we're an investor. Today, we own Microsoft, Meta, and Amazon. Actually, I think you're either directly or indirectly invested in AI, or it's a threat. So you have to understand it.

Business-model quality, yeah.

Look, when you're a concentrated investor—or an investor generally—and you're a long-term investor, the most important and most challenging thing to do is determine the risk of disruption. What's the risk of 2 guys or 2 women from Stanford in a garage coming up with something? That risk has gone up dramatically.

This is the greatest era in history to build a business. There's unlimited access to compute, certainly for a startup; unlimited access to capital; and a lot of incredible talent. That means the probability of your being disrupted has gone up enormously. The hardest thing you have to do as an investor is understand that, and that's really where we spend most of our time.

In a moment like this, do you swing toward the chaos, or do you reposition toward things that are more durable and defensible from AI, where the risk of disruption is lower?

What's interesting about markets is that people always turn their attention to the new, new thing. The new, new thing is chips, semiconductors, and energy, and that's where the shorter-term capital is going. What tends to happen is that really high-quality things get left behind.

The same thing happened—I was there in 2000, when we were in that sort of bubble. This is different, and I'm not saying it's the same, but there are some analogies. People got excited about internet stocks, and Berkshire Hathaway traded at the lowest valuation I think it had ever traded at in its history, as people said, "Okay, that's all old stuff."

I think a similar thing is happening today, in a sense, to Amazon, Meta, and Microsoft.

So they're undervalued in your mind?

Yes.

What else is undervalued? What about the SaaS apocalypse, though? Is it oversold at this point?

Again, I think it's a matter of careful analysis. I worry more about Salesforce than I do about your kind of—

I think you've got to do the work. I think it's one company at a time, but if you're a software company today, you have to be as AI-enabled as you can.

There has been somewhat monopolistic-type profit-taking from customers when someone had a niche software product that was charging $30,000 a year or something like this. I think those companies are really at risk. Microsoft, when the average customer is paying, I don't know, $50 a seat or some small number, has a platform that's worth a lot more and is less at risk.

I want to go back to COVID. You had an incredibly viral moment where you were on CNBC, and you pounded the table and said, "This is what's going to happen." Literally, the market just ripped. First, it traded massively down; you were right on that side of the trade, and then you were on the right side of the trade when it ripped back up.

I think it was maybe a month or 2 ago that you publicly pounded the table and said, "This market's going way higher." Can you just put us in your head? Where does that desire to be so active come from? It gives you so much room to be wrong, but when you're right, it adds to the lore of Bill Ackman, of which you have a lot. How do you balance that? Why, in these moments, do you get so convicted that the conviction just has to spill out, and then you're just so out there?

I've always been like that. My high school yearbook epithet was "Most Verbose."

Me too.

My friend actually lives around here. He has a quote that he put next to my name in my yearbook: "A closed mouth gathers no foot." That was his.

And so that's kind of what I've lived by. I've always had this sort of desire to speak the truth about things, and I was just talking with Jake, actually—we had breakfast this morning. We were talking about my Rhonda post. Do you remember that one? There are just certain things that need to be shared and discussed.

But with respect to markets, what happened was I was concerned about the country because I felt we needed to have basically a 2-week pause. This was March—or February, I guess it was March—of 2020, and I assumed we were going to do a short-term shutdown: let the virus cool down as hospitals were getting overwhelmed. The president hadn't done that yet, and I was kind of surprised by this.

That was what inspired me to go on TV as a way to reach President Trump and say, “Look, we need to shut down the country just for 2 weeks.” I said, “Look, you do this, okay? The virus will blow over. Stocks are at an incredibly cheap valuation. If we handle this correctly, you're going to make a ton of money, and we're buying.”

You know, valuation is like a tether on the market, right? When it gets too high, it's like this rubber band that's stretching, and inevitably it bounces back. But it works the other way as well. When stocks get too cheap, the rubber band is actually pulling valuations up.

And so there are certain moments where it gets to that place. Sometimes, actually, if you call that out, it causes people to have kind of a psychological reset.

What happened recently that caused you to call that out?

Stocks just got crazy cheap—just incredibly cheap—for really high-quality companies.

Right.

What I don't know—I don't know why.

Extremely cheap on fundamentals.

Fundamentals based on what's the value of a financial asset—the present value of the cash it generates over its life. On that basis, stocks of really high-quality companies are really cheap.

Is there any way to underwrite—and I don't want to pick on specific companies—but we have the 3 that are going public, and then you have a Palantir, let's say. These things have become very popular in pop culture, in memes on subreddits, in the public consciousness, with high-net-worth individuals wanting to buy into SPVs that are double-loaded and then getting wiped off the cap tables.

Is there any way to underwrite 100 times revenue, 50 times revenue, 150 times revenue in these companies, or are these just tremendously overvalued because of the demand side?

I think you underwrite SpaceX the way you underwrite a venture capital investment.

Interesting. Explain that. Unpack it.

Everyone here invests in venture, right? You bet on who's running it, right? The talent is enormous. I had a professor in business school who taught me: people, opportunity, context, deal.

So, on people, SpaceX—

One of one.

Yeah. Opportunity, one of one. Context, incredible. And actually, I feel bad for Blue Origin, but it's not harmful to SpaceX that Blue Origin is its biggest—

Way behind.

Then you get to deal. Okay, that's the more complicated question for SpaceX. Again, we don't know what the valuation is going to be, but if it's $1 billion, $1 trillion, $750 billion, then you say, okay, well, let's think 5 years out. What does this company look like? What is Starlink? What's the trajectory of Starlink?

SpaceX's near-monopoly in terms of low-cost space launch is going to become increasingly important, and even Amazon is going to have to become an even bigger customer because they're not—you know, Blue Origin's—and time, I would say, has become increasingly valuable in the AI era, right? You delay a model. David and I were talking about the administration and its kind of stepping in for the president not to sign that executive order to slow us down.

Allegedly.

You lose a month, you lose a couple of months today, and it means a lot. So I think the only question I have—and I haven't done the math—I actually invested in X, I invested in xAI. I'm in an SPV.

Ron Baron said, “Bill, you've got to invest in SpaceX,” so—

So I'm in. So now I have a stake, so obviously I'm rooting for a good outcome. I just—I haven't done the—

Yeah, you have to.

What about Anthropic, OpenAI, and Palantir? Anthropic, OpenAI, and Palantir also fall into this category. Do you underwrite those as venture investments as well, and have you done the work on those?

Okay, I'm sorry.

Anthropic, OpenAI, and Palantir also fall into this category. Do you underwrite those as venture investments as well, and have you done the work on those?

They're venture investments, but what's helpful is they're not seed or Series A. They're Series D or E, but they're still venture investments. These companies have proven they can generate a lot of revenues.

Actually, I was just saying on Sarah, I thought she had a very, very thoughtful explanation of how they think about committing capital, right? And that's the thing I haven't heard from OpenAI, which is why, if I were OpenAI, I'd be getting that message out. Because from the outside, you're like, it's a pretty interesting business model: you've got a company that's spending and making capital commitments massively in excess of revenues. And how do you do that and get—it's a degree of difficulty, I would say, that's hard.

Your perch on the boards of, let's call it, these more traditional Fortune 500-type businesses, and your conversations with those CEOs: how are they thinking about AI? Is it something that they're tipping into with pilots? Are they doing transformation initiatives? Do they think this doesn't really apply to us and we'll deal with it later? What's your sense of how they're adopting or embracing AI?

I'd say every CEO in America today is asking, “How do I use AI? How does it apply to my business? How is it a threat?” They've got to find an internal champion. They may have to recruit someone from the outside.

I would say, on the hierarchy of things they worry about, it's probably number 1 as both an opportunity and a threat. So if you're not paying attention to it, your board is going to be asking you the first question every meeting: “How are we dealing with the AI threat? How are we dealing with the AI opportunity?” So it's absolutely top of mind.

Are you seeing much early success? Through your visibility into these companies, there's a lot of mixed signals that we get. McKinsey did a study and said that 95% of enterprise initiatives actually fail. Chamath, you've made this point around 80% to 90%—that a lot of these enterprises don't really know how to deploy AI.

The fanciest title in Silicon Valley these days is a forward-deployed engineer, which is basically an IT consultant who can close the gap between the promise of AI and the ROI of it. I think people are just trying to figure out how to use this thing. Have you seen much actual success? Is this the question right now: how do we bridge this gap?

I haven't seen much success other than—I mean, I'll give you the Pershing Square story. We're a tiny little company. How are we using AI today? The first use case is really on the legal side. It's almost—you could call it a compliance back-office-type functionality. I think we're still super, super early in terms of big companies using AI effectively.

Can I ask or test a thesis with you? The venture underwriting model is where you think about people: you're underwriting a founder and their capacity to lead and redirect the organization in a changing technology environment, market environment, and whatnot.

We have seen repeatedly similar success at scale if the company is still founder-led, where the founder feels like they have the authority to make all the radical decisions needed to make sure that the company persists and changes as needed in a changing environment. Have you looked at founder-led companies versus non-founder-led companies, where perhaps the founders really do have an inherent advantage in being able to navigate the changing environment and actually generate outsized returns over time?

I ask this particularly as it relates to the SaaS apocalypse. If you take a look at the companies that are founder-led today versus not, if you're not founder-led, you have an incentive not to make a mistake and get fired. If you're founder-led, you don't give a. Your job is to make sure the company—

Yeah, I think the answer is exactly what you said. I think the problem is that the average life of an S&P 500 CEO is probably—I don't know—4 years, or 3 or 3½ years, or something like this. You're focused on shorter-term compensation. You generally don't have a big economic stake in the business.

If you're a founder, this is your entire life. It's your entire reputation. It's not like you're going to go get another job. You've got to make it work. Also, when you're in the boardroom, you have the authority of either being a major voting voice or having a huge economic stake in the company.

When we join a board of a company, we're often the largest or the second-largest non-index-fund-type shareholder. That kind of gives us a little bit of a disproportionate voice in the boardroom. Imagine if you have that and you're CEO of the company, right?

I think that does give you an advantage. Also, if you've gotten to be a successful founder over time, it's guaranteed that you've made a number of very challenging calls over time that turned out to be right. Otherwise, you wouldn't be there.

And so, you look at Mark Zuckerberg. When he bought Instagram, I don't know, everyone was shocked at the price he paid, or WhatsApp. The company only had, whatever, 19 employees or something when he paid a billion-something. But you make enough of those calls, and you can make the other challenging call.

Is that antithetical to a Ben Graham investing model? Do you have to have a different set of skills as an investor to identify this talent versus—

Ben Graham is a really important voice for investors in that he said, “Look, you’ve got to think about a business. A stock certificate is an interest in a business, as opposed to just this piece of paper.” That’s probably one of his most important aphorisms.

He was investing, for the most part, in liquidations. He was investing in the days of Ben Graham, when there wasn’t an EDGAR system, and to get a 10-K filing, you had to go to the headquarters of the company. There were a lot of stocks trading at basically the cash on the balance sheet. His business model was buying these things at stupidly cheap prices.

But Ben Graham made most of his money investing in, I don’t know, GEICO or something.

Tell us a little bit about the distinction between being an activist and significant shareholder and then Howard Hughes. You’ve talked a little bit about Berkshire Hathaway 2.0, or just being inspired by that. Chamath, you were inspired by him for a long time.

Well, Bill just took Pershing Square public.

Yeah, but with the Howard Hughes Corporation specifically, tell us about that effort, because you’re operating that business.

There’s a book—I think it’s called The Financial History of Berkshire Hathaway. That’s for geeks. This guy went back and read every 10-K. He actually went through the filings, looked at every deal that Buffett ever did, and you follow him over a 60-year period of time.

The vast majority of the value he created at Berkshire was actually through the ownership of the insurance operation. What’s interesting about insurance is that, running an insurance company, you have 2 jobs. One is to write business, right? You take risk. You collect premiums in exchange for the obligation to pay future claims. Then you get money up front, and your responsibility is to invest that money.

The vast majority of insurance companies focus only on the liability side of the balance sheet. Buffett was really the first to focus more on the asset side of the balance sheet than on the liability side. Over time, if you manage the assets of an insurance company well and manage the liabilities well, you can build this enormously profitable, compounding, tax-efficient machine.

The question is, why haven’t other people done this? The answer is, if you’re really good at investing, you go work for a hedge fund, you go work for Fidelity, you go work for Wellington, but you don’t go work for an insurance company. So, an insurance company’s ability to recruit investment talent is very limited. Buffett owned half the company, and he was really good at investing, which is why it worked.

What we’re doing is—Buffett started with a crappy textile company. He effectively liquidated it over time, reinvested in insurance, and then invested the assets well. Howard Hughes is actually a really interesting company, but it’s a business that Wall Street has not cared about for a long period of time.

We created it out of the bankruptcy of General Growth. It was a spin-off of all the other assets. It’s a company that owns these small cities. I bet a lot of people here have heard of Summerlin because a lot of the tech community has moved from California to Las Vegas. We own this small city: 26,000 acres of land. We own all the commercial land, we own all the residential land, we sell lots to homebuilders, we build a downtown, and we build buildings.

It’s a bit like the Irvine Company. Don Bren created probably $100 billion of personal wealth managing a small city. It’s a super cool company, but the time frame is decades as opposed to quarters. Wall Street’s never cared; it’s always traded at a huge discount.

Buffett bought into a textile business at a discount to liquidation value. At $63 a share, you’re owning Howard Hughes at a discount to liquidation value. What we’re doing is, instead of reinvesting all the cash the business generates into real estate, we’re going to reinvest all the cash into insurance.

You’re in the business of building this flywheel.

We’re going to build this into a compounding machine over the next 50 years. It’s something I’ve always wanted to do. We have the benefit of understanding both the insurance side of the business, and we can manage the assets well. You can buy it at, you know, 60 cents on the dollar.

How do you think about investing the assets of this insurance company?

What Buffett did is he took 100% of the insurance float and put the money in short-term Treasuries. So, he took no risk on policyholder funds. He took 100% of the surplus of the insurer—the equity—and invested it in common stocks. That’s what we’re going to do.

I think we can build a really profitable insurance company. We’re starting at a very small scale. The company’s got like a $4 billion market cap, and the goal is to build it into a trillion-dollar thing over time. Compounding.

The other thing Buffett did well is that he didn’t issue any stock, not for a very long time. He started with 1 million shares, and today it’s effectively like 1.5 million.

Is this the future for very talented managers like yourself versus the traditional long-short fund, or do you think they sit side by side?

I think it’s hard to do this because you need control of a public company, and you have to not be in a get-rich-quick mindset. If you’re in a get-rich-quick mindset, it’s easy to go to Citadel and Millennium or one of these.

Why does it have to be public?

Why does it have to be public? It doesn’t. It doesn’t have to be public.

Why did you choose to take it public?

We got here by accident, right? The most successful equity investment we’ve ever made is that we bought this company called General Growth. We bought the stock of a company that was going bankrupt—sort of the most contrarian investment you can make.

The stock went from a $20 market cap to $100 million, and we bought roughly a third of the company, or 27% of the company, at a $200 million market cap. There was $27 billion of debt. The bankruptcy emerged, and the strategy we said was, “Look, the assets are worth more than the liabilities. We’re going to do the first restructuring where the equity gets to keep its investment in the company.”

Two years later, we emerged from Chapter 11. The stock went from $0.34 to $34. But part of the restructuring was spinning off this thing called Howard Hughes. It was really all of the junk that didn’t belong in the company, that the analysts hated.

We did it with sort of an inverted investment. Fifteen years later, we haven’t really created much value with it. So, we said, “Look, we’ve got to— the market doesn’t like this thing. A company has to earn a return in excess of its cost of capital in order for a stock to go up.”

Elon has done an amazing job keeping the cost of capital of his companies really low. If SpaceX goes public at $1 trillion, $750 billion, it’ll probably be the lowest-cost-of-capital equity transaction in the history of the world.

The problem with this company is that it’s real estate, it’s development, and it’s land ownership. The market says, “The cost of capital is really high, and you can only earn a certain return on real estate.” So, what we’re doing is repurposing the real estate assets and transforming the company into a much higher-returning—

Well, the last few years, you’ve become incredibly famous. I mean, just to put a fine point on the word, how does that change and influence the way that markets work? Your voice gets amplified now. You also have other places where other voices get heard—many people whose names you don’t even know. You go into WallStreetBets, and every random Tom, Dick, and Harry has an opinion.

Tell us the way the markets have changed with notoriety, fame, and social media influence—not just yours, but in general.

I don’t think markets have changed as a result of anything that’s happened with me or follower growth on Twitter. I think Ryan Cohen, the GameStop guy—

Yeah.

That is a change in markets, when a stock can trade at a valuation well above its value simply on the personality and the ability to—

Vibes.

To gather up armies of followers.

The fascinating thing about liquidity and valuation is that the higher a stock price goes—and it’s going to sound sort of intuitive, but it’s not—the more valuable the company becomes. The increase in value of the company increases the value of the company, right? Because it lowers the cost of capital, gives you more flexibility, gives you the ability to issue stock, raise capital, and acquire other businesses.

Getting back to the Elon example, I would say he’s a better example of this. We’ve not taken advantage of this at all. Maybe we should. But he builds an army of believers and followers that enabled Tesla to be built.

Let me help Marcus. And as we wrap up with a somewhat pointed question: You’re an incredible investor. If we want to be maximally aligned with Bill Ackman, is the best way to be an LP in Pershing Square, or is it best to go into the market and buy—

I think there are 3 ways you can invest with us that all do different things. One is something called Pershing Square, which is the management company of Pershing Square. I think it’s one of the most interesting businesses, intellectually, because it’s the entity that receives fees on these 3 permanent-capital vehicles we manage. So, it’s a royalty on the compounding of investments in these entities, and there’s no CapEx in the business.

We’re going to pay out basically all of our profits, and we’re going to grow as quickly as the underlying assets compound. So, if you invested $1 in Pershing Square 22 years ago, that became something like $27 or $28, net of all fees. Had we charged the fees of this public vehicle, that number would have been more than something in the mid-40s.

Wow.

Okay. Over 22 years.

Okay.

What this means is we now have a public vehicle that charges only a 2% fee. We’ve got one in London that charges an incentive fee. If we compound at the rates we have historically, we’ll have 35 times the assets under management in 22 years. So, we’ll go from $25 billion of assets to something approaching $1 trillion.

We don’t have to hire another person, and we don’t have to spend another dollar on overhead. That’s a pretty interesting business. So, I like that one. So, Pershing Square: If you want to invest with us as an investor, invest in something called PSUS. You own a portfolio of our best ideas, and it’s trading at an 18% discount to cash. If you believe that we can build the next Berkshire Hathaway, you own Howard Hughes. We’ve got 3 different ways.

Yeah, I’ll put some Howard Hughes. I think following you on Twitter and the going-direct movement does allow you to communicate your vision directly, and that actually makes it much easier to place the bet. I do think it has a profound impact, because prior to your extremely long tweets that have now been parodied, there’s an incredible meme of a Bill Ackman tweet coming in, which is—

You did that with your extended iPhone that’s a foot tall.

No, that was my Halloween costume.

Yes. You would have written something shorter. You just didn’t have the time, yeah?

Yeah, I guess. I don’t let other people read it.

Do you like having a lawyer or anybody read it?

On the Ronda tweet, which had some legal implications, I did have my communications guy and a lawyer—a friend who’s a lawyer—read it, but I only gave him a few minutes because I was so excited. Once I write something I really like—

I just want to—I’ve got to push it. Yes, I agree. I agree.

And the torpedoes.

Tom does this, too. He starts getting a little bit frantic when he’s writing something, and then he’s like, “Fuck it.” He just hits send.

I just hit send.

By the way, it’s a very powerful thing to be able to share your view, push a button, and reach 2.2 million people.

Why don’t we just take a picture on stage and I’ll send it out?

Let’s do it.

Liquidate it.

Gone all in?

All right.

Relax. Thank you.