William Ackman Got it Right, Vision is Key!

William Ackman Got it Right, Vision is Key!

$A, $LOW, $SBUX, $HLT, $PK, $BX, $BRK.A, $SPY, $SPX

William Ackman’s hedge fund posted double-digit gains at a time many portfolios sunk with the economy during the C-19 coronavirus chaos, after the billionaire investor deployed cash into a number of companies he already owned and sold Berkshire Hathaway.

The public and private funds at Pershing Square Capital Management have gained between 22% and 27% this year, beating both the Standard & Poor’s 500 index (SPX) and the average hedge fund which are each off 7% since January.

Mr. Ackman began worrying about the health and market impact of The China Virus months ago hedged his portfolio with a $27-M bet that turned into a $2.7-B windfall that he reinvested in the stock market in late March, buying bigger stakes in companies he was already invested in.

We like what we own and we still think these stocks are cheap,” Mr. Ackman told investors on a conference call Wednesday, adding that his portfolio contains companies whose businesses can withstand unpredictable events with severe consequences.

Positions in Berkshire Hathaway (NYSE:BRK.A), Blackstone Group (NYSE:BX) and Park Hotels & Resorts (NYSE:PK) were liquidated because the cash could be used more efficiently elsewhere, he said.

Money was used to buy more stock in Agilent Technologies (NYSE:A), Starbucks (NASDAQ:SBUX), Restaurant Brands International (QSR.TO), Lowe’s Cos Inc (NYSE:LOW) and Hilton Worldwide Holdings (NYSE:HLT), he said, arguing these large companies have best-in-class technology to weather the chaos.

This year’s gains come after last year’s 58.1% return, the best year since Pershing Square’s founding in Y 2004, and signal that Mr. Ackman is still having success with his back-to-basics strategy where in Y 2018, he took back control of making investments.

Mr. Ackman was early in closing down his Manhattan office and sending staff to work from home. When millions of other Americans were told to stay away from the office.

We bought Lowe’s at 84 a share and it was the bargain of a lifetime,” he said with the stock now at 127.62.

Have a healthy day, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge. Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.