Billionaire investor Bill Ackman at CNBC's Delivering Alpha Summit — 9/28/2023

[Applause] Jenny thank you so much Les good to see you Frank thank you okay I can't think of a better way to uh bring this proceeding across the Finish Line then with our next guest uh he is one of the most provocative and interesting investors in the country his motto is in investing to make a bold call that nobody else believes in and that is what he has done time and time again usually to great effect farmer retail railroads diet supplements restaurant music streaming he shorts he goes Long Way long he usually does it very successfully stocks bonds it doesn't matter he is Bill Amman please welcome Bill akman to the stage and welcome back Scott [Applause] wman thank you man thank you man all right the closer it's been a minute since we were up here together Carl's not going to come out no hugs we're good okay um I do want to start though with news um but I think is news um a reported secret meeting that you had recently you and a bunch of other people with zalinski of Ukraine within the last few weeks it was said to have happened what happened in that room so I I don't know it was so secret um but basically I think zilinsky wanted to meet people from the business community and uh there were about 10 of us there uh was organized by JB Morgan and it was this is a a pretty important person uh I think when we look back in time in in our history he will he's played a very important role in the last couple of years and it was an opportunity to sort of meet him firsthand and I think he his his goal here I think was to meet people who could be potential investors in the country people who could bring business to the country and I think his what he really had to say was don't wait till after the war you know you can really help us by bringing business to our country now also looking for people to help rebuild after the war yeah I think look I'm very bullish on Ukraine post war right I think most Americans wouldn't be able to identify Ukraine on the map Circ two years ago and today I think people know you how many people live there they know a lot about the population I think they feel a moral obligation to help and I think there'll be a very you know powerful big business case for the rebuilding of the country are you going to commit personally that you'll give money towards the rebuild either through you personally or the foundation so uh I've invested about 24 million in Ukraine philanthropically uh during in the war you already have already have uh some of that uh was a philanthropic investment in a company called zipline uh which is a really interesting uh startup it's well beyond the startup they apparently raised 400 million out a $4 billion valuation recently um but our philanthropic support was to get them to launch in Ukraine and basically it's a drone company that ships medical supplies principally in Africa but they um places where there isn't good road infrastructure and you need to get blood from One hospital to another medical supplies or things like that and uh they launched in uh they're in the process of launching Ukraine because of course the infrastructure of the country is is not in a great place and you know they have lots of Need for blood in the right places unfortunately and that was just the start it sounds to more investment from you it it wasn't really it was it was not an investment I was looking for a economic return it was an investment to you I think in their it was not in their business plan to launch in Ukraine and so uh actually got a call from Mike R of sequa saying look we're we're actually looking for philanthropic support to bring zipline to uh to Ukraine and I think they are and actually I had the opportunity to meet the head of logistics for the War uh at this uh meeting with zinsky and I connected him with the CEO of zipline because you know even in a place like Ukraine there's a bureaucracy that you need to get through in order to if you think about launching drones around Ukraine right now you have to have a lot of confidence that those drones are are good drones as opposed to bad ones it was a good segue to get to the markets because just within the last week Jamie Diamond said that geopolitics Remain the Market's biggest risk do you agree um I think geopol I I don't know maybe in the very short term that's true uh but I think yeah it's sort of the unknown it's the ultimate sort of Black Swan type risk right what what do you worry about you worry about nuclear war you worry about you know uh an obligation to defend Taiwan you worry about you know war between the US and we've gone from a period of you know a couple decades of you know put aside terrorism which you can't really put aside but we really haven't had war between major Powers uh you know two countries in Europe in you know 80 years and so uh this is not a bright time in our our history but we had a period of time where I think Berlin Wall came down and we thought about peace so it's a different environment to to be investing in for a number of reasons which we'll get to um how would you describe what your positioning is today so uh similar to what it's been historically is we own actually really eight amazing companies um I'm sure you know most of them we have a tiny little investment in Fanny May and Freddy Mack which uh I think together represent little maybe a little over 1% of the portfolio but the rest of the port those are really options on a re ultimate kind of government taking them out of conservative ship the balance of the portfol of great businesses we think do well in really any economic political or or macro environment uh and then we opportunistically hedge risks and the two risks we've been concerned about really over the last you it's a year and a half Energy prices uh and kind of the the the longer part of the curve uh the treasury curve becoming uh rates moving up betting betting on the long end of the curve rates continuing to go up you nailed that and you've been making that well nailed it would be we put this on like 18 months ago we haven't made you we actually made a almost 3 billion on on two-year rates we've made a relatively modest profit here so nailed it we would have made more but are you we've been I was I sort of was quiet about it for a while and then sort of made my point a couple months ago and rates have moved a lot since is it still on that bet it is and how long will it be well until we're right or wrong I guess I mean you're are you are you still figuring that rates at the long end the 30-y year for example or however on the long end are are still going to go higher yes I look I think there's even in the relative short term there are a number of reasons why rides can move a lot among them right we have a government shutdown we're going into what looks like a highly probable government shutdown we're going to have a data shutdown right all these little government agencies that put out data that the Federal Reserve relies on to decide whether to you know adjust interest rates they're going to lose access to that data so kind sort of like kind of dark period uh we have probably the worst technical environment in our lifetimes for supply of bonds versus buyer bonds right we have China selling we have Russia to the extent they and US Securities and more selling we have Saudi Arabia selling um and uh you know we have an economy that is still strong and inflation you know three and a half 4% uh persistent but you know my our view is basically you're not being paid enough to enter into a 30-year contract with the US government at a fixed price you know 4.7 or where it is now um doesn't make sense in a world where we think structural inflation is north of 3% for the for the very long term and we went through this very unusual period with extremely low interest rates um you know where everything just got cheaper and you know you know since the financial crisis you know the effort of the Federal Reserve was to make sure we didn't have deflation you know let's the aspirational goals to get to 2% inflation and then the pandemic and you know trillions of fiscal stimulus you know the psychological stimulus of being free to to roam after being locked up you know all of these factors coming at once kind of lit inflation and we still have this massive deficit spending we still have infrastructure uh spending you the government's selling literally hundreds of billions of dollars of Securities you know uh um bills and and and at some point they're going to have to sell more and more of the longer instruments and if you look at the balance sheet of the Federal Reserve it's it's it's an imprudent balance sheet uh you know if you think about the United States right if you were If This Were Like a business you wouldn't have so much short-term you wouldn't have you know a third or more of your debt repricing within the next year you know so it's not been managed I think actually Steven Nan did a good job as treasury secretary the one thing he missed is he should have issued a lot of 30y year 50 year 100e paper at at at crazy low interest rates and and that's going to be a burden hearing hearing a lot from investors these days Ken Griffin was on our Network within the last week or so I just had a conversation with Rick reer of black rock those who are talking about the possibility of much higher real rates for much longer than than people think for the very reasons that you're talking about the issuance is so massive and where are the buyers going to come from and the result of that is going to be higher yeah real I don't about much higher real rates uh I think we're I think you know again my view is inflation or kind of the house views inflation is going to be persistently higher well you are the house I I guess I control the door on the way in and out I guess but um you know our view is really that uh we're in a different world and you know the world sort of changes gradually uh and you have a generation of people are used to rates you know four sounding like a high interest rate and and it's you know on a historical basis it's an extremely low rate of interest so I would not be shocked to see you know 30-year rates well you know well into the you know through the five barrier uh and you could see 10 the 10-e approach approach five jam and that and that can happen in the very short term like like literally weeks SE a huge move in the last uh number of weeks and I think a lot of that is investors kind of rethinking you know what's interesting about the 30-year treasury is people reflexively uh buy it whenever they you know because they've made money doing it in advance of a of recession but it's really not an instrument you should use to speculate on the short-term economy it's it's a fixed price contract with the US government for 30 years and reflects really structural forces and I think the structural forces have changed you must be negative the equity Market how could you have a positive view of stocks if you think that that's the outcome for bonds yields because if you own high quality uh key is owning businesses that have pricing power businesses that can do well in a world of and by the way many businesses can do well in a world of 3% inflation the key is it's hard to manage a business in a world where inflation is volatile or or inflation is 8% or you know the kind of crazy numbers um but many many businesses can do very well in a world of 3% inflation and the kind of companies we own they're very much like royalties you know so we own Universal Music which is a royalty on listening to music if there's PL music playing out there Universal is getting a fraction of a penny for every song uh you know that's being streamed um you Google Google's a royalty if you will on people advertising you know on the web right or on YouTube uh restaurant Brands is a royalty on people eating at Burger King or any of their various Concepts Hilton is a I continue you know royalty on people staying in hotels and and and uh eating and drinking and going to events the beauty of these kinds of businesses is you know actually inflation is ultimately their friend right as long as they can keep their cost as long as their costs don't inflate as quickly as their as the revenues and I think the nature of those so so I I feel comfortable owning those kinds of uh businesses even if inflation remains high and and also again historically you if you think about you know what is the value of a business it's the present value of the cash you can take out of it over its life discounted back at an appropriate interest rate we were not discounting businesses back using 2% as an appropriate rate of interest so we've historically you know our discount rate we've used you know just rough measures more like 10% uh 9% you know numbers which discount the uncertainty inherent of investing in equities alphabet is one of your more recent Investments is that correct yeah we bought it late last year early this year yeah or early this year how much did that have to do with AI it had a lot to do with AI because AI was the reason why the stock was cheap right chat GPT launched you know incredible game-changing kind of product and Google really fumbled their offering and so people said oh my God Google's way behind on AI and the stock sold off to you know 15 times earnings uh for one of the greatest businesses in the world and you know we did a fair bit of work but you know Google's been you know almost a decade uh they bought deep mind you know huge spending billions and billions of dollars on AI it's a company known for hiring you know great engineers and we you could certainly presume that we're in a pretty good place on AI but you know they're again very different from a startup they took a much more cautious launch approach and I think and then kind of fumbled an early demonstration made people think they were behind in Microsoft and chat GPT would sort of if you will open AI would eat their lunch uh and and it led to a very mispriced uh stock and then we actually we've bought more in the 120s it's our second largest investment alphabet yeah some would suggest that and it was said on this stage earlier today by somebody who saw old alphabet when the chat GPT and open AI thing came out we bought we bought from them so we should thank them yes that the ball was fumbled and recovered by the other team who ran for touchdown and then piled on with other touchdowns and now alphabet may not be able to recover the leadership role that it had even and they Deep Mind is a perfect example of alphabet having this inh house and still fumbling the ball I would say they fumbled the pr around the ball um but I think they they've subsequently demonstrated publicly that they are you know integrating AI in all their various products uh obviously the most obvious example of search um and they are I think their B is you know sort of certainly neck and neck with chat gbt and uh we think they're you know if you think about the enormous amounts of access to data that they have by virtue of the various you know everything from search to the various products they offer to their customers email and otherwise uh you know data and the ability to legally uh extract and train on on uh on data is a really important competive Vantage they also have designed their own chips you know uh access to um you know the cloud uh access to you know the processing power is critical so they've got many many competitive advantages and I think it's in some ways you know in an integrated fashion it gives them enormous advantages they will be a dominant player in AI for the very very long term I we would expect I joked at the outset that we haven't sat together in a while and we certainly haven't done it here and one of the last times we did was You Know Carl comes out you guys give each other a hug and it was this this big moment and it's hard to believe for me and I wonder for you that it's been 10 years since the Herbal Life battle with Carl yeah you believe it's been 10 years yes by the way had we held our short we'd be up like 70% so I'm still psychologically short on that position where we've got a nice profit are you still seeing ghosts at night being psychologically short is a much lower risk way yeah yeah um are you a changed investor from then are you different as an investor than you were 10 years ago and if so of course I'm a I'm a continuous learning machine uh and and all mistakes are opportunities for learning and so uh hopefully you know I sort of decided at 50 I was like okay I'm not going to make any more mistakes and I made one but no look we've been very fortunate uh we've had the best uh five years uh in the history of the firm and uh we're fortunate in the way that we're structured you know we i' I've been a kind of Warren Buffett devotee unofficial he's been my unofficial Mentor for for many years and if you look at his trajectory he he started out as a what today you would call an activist hedge fund manager running a series of private Partnerships over time uh he U took control of what he called a crappy textile company or probably what was best described as a crappy textile company but the access to the permanency of that Capital gave them the ability to take kind of the very long-term view in a world where uh people in the investment management business generally have have to make short-term decisions because their Capital you know it can can leave we really five years ago got to that place in terms of the structure of our organization and allows us to take the kind of very long-term View and you know we can buy ghou at $94 a share when people are scared about you know um and and we can and we can own it and uh that I think is nice fortunate competitive Advantage we have are you a better risk manager today than you were before I'm I I certainly believe so but I mean look uh Short Selling was never something we actually liked like shorting stocks because the asymmetry asymmetry is in Reverse you know we're a big Believers in in uh you know as understanding asymmetry both in life and in investing is critically important and short selling is on the inverse side of it um so you know we did that a couple of times first time very profitably shorting Bond insurers and uh you know Fanny Freddy going into the financial crisis and then uh the famous Ur life um but since then we all we do is we own really really great businesses and if you want to be a successful investor over time and you find a handful of great businesses doing nothing but owning them is an amazing strategy and it's it's uh it's under appreciated if you will as a successful way to make money the moment from you that I said to myself this looks to me like a different acman was um Netflix okay was Netflix okay you were a huge believer in Netflix and I remember the day where that earnings report came out and that stock dropped like a bomb okay right not like a it dropped a lot okay in a meaningful way dropped a lot for sure yes enough that we spoke because I went on CNBC and reported our our conversation and you said that's enough I I was wrong about this and I said the old Bill acman might have said now this is just a moment in time management team's great company's great I'm staying with it the new bill acman was like no I'm done that's it I'm moving on because the so I still think the management team is great uh and I've gotten to know you know Reed Hastings uh even more since that time uh I think he's a first class person and obviously his you know Ted and and the rest of the team Spencer Etc I think it's an amazing company um I think what we misunderstood or mis appreciated was you know once they announced basically a different strategy it became a much more disperate outcome we still thought they would be successful wrote a little letter to our investors we said look we think Netflix is going to be a great investment over time but in terms of do we want it to be one of eight things we own or one of 10 things we own no because the it's kind of the the range of outcomes as a result of the sort of change in strategy going to an advertising model Etc and predicting the probability of of the success of that was a different kind of hurdle for us to climb uh so sort of the facts changed in a meaningful way became a different kind of investment I would have been happy to have that as a you know maybe even a 2 and a half% position 3% position in the portfolio but that's that's not what we do we don't collect 30 things we put 3% of our Capital we own we have 22% 25% of our capital in Universal Music we have uh whatever 16 17% of our capital and and Google you know these are businesses we feel very comfortable we can sleep at night and have a very high confidence level what they look like over a long period of time if a business doesn't meet those threshold characteristics or something about the business changes where we you know misunderstood the predictability of the business we're happy to sell and find something else to do and basically we took the Netflix you know losses but the capital if you will and we invested in Google and it was a good decision we're able to make a bigger investment in a company had more confidence in I think part of part of my point would be just because you like the management team and you think it's a great company doesn't mean it's a good stock and you recognized that at a moment where maybe in the past you wouldn't have because you would have believed in it so much that you wouldn't have sold it when you did I thought it was a moment I did okay I'll take that I thought it was a I thought it was risk management like maybe people hadn't seen from you in the past okay you don't accept that I don't think so I think it's something we would have done in the past I think the big difference is look we're very happy to buy more of something not everything we buy goes straight up right in fact our favorite outcome is we you know obvious best outcome is we get our entire position purchased and then it goes straight up that rarely happens what normally happens is you buy something uh you make it a meaningful position and then something happens that causes the market either not like the stock or the market itself goes down and you can buy a lot more of something you know well at an even more attractive price we we've done that all the time in our history you're pretty Chipotle being a perfect example I mean Chipotle we bought initially at $0000 a share and then they had a couple more food safety problems and the stock was 250 right which is about the move uh almost exactly the move that Netflix made and then we hired Brian nickel to be CEO and we bought more uh and you know one of the best investments we've made you don't do many interviews you sure tweet a lot no I don't you you tweet a fair amount um you tweeted that so that keep you uh compete with this format well you give me good material that I can bring up right now okay um icon has his problems with Hindenberg report comes out you tweet quote there's a karmic quality to it over his story career icon has made many enemies I don't know if he has any real friends he could use one here you also likened it to the aragos um debacle I think we can call it little shot and Freud no why did you tweet that when I saw it I was like oh my God he's poking the bear no uh look I Carl was not uh friendly counterparty when I dealt with him uh over the course of my life I did make peace with a guy he's a Charming person to hang out with and have dinner with um but uh I did not like the way he managed a couple of situations I had business-wise and so you know for Carl to be the subject of a short attack I did think there was a circle of life kind of quality to it you also tweeted transparency is not the friend of IEP yes did you ever go short no you never short at IEP never no did you we don't short stocks anymore I I've been this might have been a special situation no no you know what you're right I was short psychologically short that one too so my by the way myy I think we're going to raise a fun of psychological shortal shorts and and you can everyone we'll invite everyone to invest with us how do you know when to cover uh how do you know when to cover when it's asically approaches Z out yourself um so I want to talk politics with you too okay because speaking of Twitter you become quite passionate about that in February you said a Vivic ramaswami quote I'm going to make a bold and early call he will run for president and win you supporting him now I have supported VI uh you know I've known him probably five six years very talented very capable very smart a little too uh maybe more than a little too to the right for me you know I I I was hoping he would be as I described a kind of more Center center right candidate um and I think he's got a lot of great ideas but on some positions Ukraine and some others I think uh I you know I profoundly disagree so whereas you said he's young smart talented will attract the center to the right to win he speaks hard truths which many believe but fear to say you no longer believe those things I agree with everything that I've said there uh except for he was not going to attract the center right I think he's problem is it's hard to win being to the right of uh president Trump right and I think his some of his views are to the right of President Trump and and I think the um I think it's a challenge I do think there is I think there are many Republican candidates Republican cand I think there many people that have traditionally voted Republican that would love a Centrist more centered uh Republican as an alternative a capable business leader um with uh I would say more Centrist more traditional I would say would say Reagan uh views and I don't think we've that candidate has emerged in a way uh that is um you know created an opportunity to compete with u with President Trump okay so it sounds like he's off the check writing list he not getting any more contributions we'll we'll see where he goes on his various policies and uh look I think look I I like a number of the candidates Chris Christie I've spent some time with recently I I thought he did a great job in the debate I think he is much more of a uh I would say more traditional Republican candidate I think he's did a great job uh at New Jersey uh as Governor um he's got a lot of political experience but you know is that is that someone that the American people will support I don't know but I do think we would benefit with a broader array of choices on both sides of the aisle here yes you which is why I'm been supportive of multiple people well including Robert F Kennedy Jr yes are you supporting him uh I'm certainly I I like that his voice is in the race for sure and I'm meeting him for the first time actually tomorrow have you given him any money yet uh I have I've written him a check yes so I think some would look at that and say How could somebody who was so emotional about coid you came on my program we all remember that mhm as committed you were as you were to the vaccine and getting as many people vaccinated as poss possible given his stance on vaccines in general some might wonder how you can be supportive so actually I think Kennedy raises a lot of important questions that need to be asked and answered about vaccines and uh and that's something that we are doing a deep dive on uh just today I was on the phone with a scientist and we want to put together what what I think needs to be done is a very detailed Deep dive into all of the research on vac vacines on vaccine safety uh and then you know what we among the things we have not done a lot of work on is the cumulative impact uh on a child for example of you know when I was a child I got three shots I have a four-year-old she's the schedule is to get 73 shots you know it's and it may not be the you know the the the virus if you will the the that it's designed to make you immune to a particular disease or the or the um you know dead virus or or the MRNA technology and maybe you know aluminum or some of the other preservatives are us in vaccines which create uh create risks and and challenges and by the way as a parent of a four-year-old uh where the four-year-old has no ability to consent to your injecting something into them I feel a moral and other paternal obligation to get to the bottom of this issue I think mik I just spoke to a scientist today top scientist at UCSF who said to me you know Kennedy is right on 75 to 80% of the stuff he says about vacc the unfortunate thing is there's a 20 to 25% where unfortunately there's just not enough data for the stuff he says says convincingly and and uh so I I I think it's time for us you know this whole vaccine thing became a political issue where um you know if you got a shot and and wore a mask you were on one party if you refused to get a shot and didn't wear a mask you were another political party it's just not a political issue and there is real reason look we we have a generation of kids uh who have a lot more uh asthma have a lot more eczema have a lot more um autism and we don't yet understand the reason for that and is it some the adant in the in the vaccine is it something about vaccines is it some other toxins in the environment I think we have an obligation as parents to figure this out before you know before we could keep uh is that is that where this new found curiosity came from from you becoming a parent no from actually listening to what Kennedy had to say as opposed to look the biggest I would say interesting I'll give a lot of credit to Elon uh and Twitter or X whatever you want to call it this you know I was talking to again a scientist today who's a brilliant uh you know uh epidemiologist um and among other issues and he was one of the scientists doctors that raised questions about our approach to uh the co vaccine and he was demoted on Twitter uh and some of the papers he put up on a one of the pre-print sites were like taken down his misinformation and you know and you look at this guy Jay bachar at at Stanford his recommendations for how we should have managed coid turned out to be pretty much spot-on accurate but he was basically just you know taken off Twitter as misinformation and and now Twitter has become a place where people can express their views and I'm a huge Free Speech Advocate and I I try I use Twitter look some of the most Prof Prof Investments well the most one of the most profitable Investments I've ever made I I made because of what I learned on Twitter which was the co the trade we made where we bought um CDs I I it was clear to me that it was a very high probability event that Co would be here we'd have to shut the global economy and I learned that because I could take a dispassionate View and collect data without without it um uh at least that th those topics were were were yet to be uh uh screened if you will and uh you know elon's basically opened up Twitter now and you know the downside to a very open format is there there's going to be some hate speech there's going to be some things that people don't like the upside is Free Speech has been a critical uh you know sort of tenant of our country's principles and and helps preserve the Democracy um so I'm I I find that to be a really important vehicle and on Kennedy I read the headlines and had always had a perception he was a total Wacko and then I spent some time spending you know several hours listening to him in a podcast doing some more work on him as a person I said you know what he's raising some really important points on vaccines I hadn't thought about and so I would say uh you know a year ago I would have automatically taken a booster now want I'm going to think about risk and reward and and I don't think it makes sense for me it may make sense for someone who's has health issues who's older but you vaccines have risk and reward and you have to do the calculus as to whether the risk justifies the reward and I I really hadn't spent a lot of time thinking about it prior to canid the I give him a lot of credit for that January 20th 25 who's taken the oath I don't know yeah I don't know uh but I I think um I think you know the logical it's going to be Trump or Biden absence someone else credible running for office and I've I've done my best to try to convince others to run you know I was big big advocate for Mr Mr Diamond uh who unfortunately decided not to are you thinking about today what the market impacts are going to be if one of the those two no win no no I I think about the global impact you know I think our country deserves a great leader that the entire country can get behind and uh imagine what America would be like if you woke up in the morning and you're incredibly the entire country was excited about who was leading the country right and therefore we're working together as a country to solve problems to grow the economy you know to protect the world you know that's a that's a world we've we've had in our history we have not had it recently and I'd love to see that world come back well you're very sought-after speaker uh because you're not afraid to take on the tough topics and I appreciate you being here I know we all do as well welcome back to delivering Alpha we'll see you hopefully next year thanks [Applause] Billman thank you very much Bill that's fascinating really good all right yeah cue the bottles uh uh I want to do a deep dive on being psychologically short that's all I want to say I think that I could spend a lot of money on therapy uh if I did that I think Bill akman hit on some very interesting things I I I expected nothing less uh again as always fascinating provocative uh a little bit more Buffett in in him today I think than maybe maybe he would dispute this than there was 15 20 years ago own great businesses sit back and watch them grow um anyhow we have come to the end I am so glad you all came if you want to watch any of this again you will be able to it will be up and posted in a day or two for on demand viewing you'll get an if you were a ticket buyer you will get an email that will enable you to click in and go through and uh and watch whatever

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Id: TrDI3QDFh0A

Length: 33min 50sec (2030 seconds)

Published: Thu Sep 28 2023