Why this hedge fund loser didn’t buy Apple (video)

Bill Ackman, who lost $4 billion on Valeant Pharmaceuticals, was too smart to buy Apple.

A front-page story in Monday’s New York Times chronicles the rise and fall of Willam Ackman, “one of Wall Street’s brashest and most self-assured hedge fund managers.” His hedge fund, Pershing Square Capital Management, bet heavily on Valeant Pharmaceuticals and lost billions when the stock cratered from $262 to $11.

Why didn’t he just buy Apple? He’ll tell you. Bloomberg grabbed this 22-second video at the 2016 Harbor Investment conference, of which Ackman was the co-chair.

Cue the video (and pardon the pre-roll):

Apple was trading for $95 a share the day Ackman made those remarks. It closed Friday just below $140.

6 Comments

  1. Warren Zimmerman said:

    That’s what happens when you’re too smart for your own good.

    0
    March 20, 2017
  2. David Emery said:

    “too smart…” 🙂

    0
    March 20, 2017
  3. Fred Stein said:

    It plays like an SNL skit. He models 50 years in advance? Why not 100?, 500?

    0
    March 20, 2017
  4. Turley Muller said:

    Total loser.

    Love it when Icahn rips him a new one.

    0
    March 20, 2017
  5. John Kirk said:

    50 years? You’re kidding me?

    People can’t accurately predict what they want for Breakfast next week, more less what they’ll want as an investment in 50 years.

    I guess investing is about predicting the future. Which is hard because my experience has been that people can’t even accurately predict the present — they don’t know — or refuse to acknowledge — what has already happened. It’s pretty hard to build a model for the future upon a foundation that does not really exist.

    0
    March 20, 2017
  6. Ken Cheng said:

    So, I guess he thought he could model the PV of the future cash flows for the next 50 years of Valeant. Oops.

    How do you backtest any of his other bets?

    0
    March 20, 2017

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