FYI: Hedge fund billionaire Bill Ackman of Pershing Square Capital Management is riding high after a multiyear stretch of trouble.
A publicly traded vehicle that houses the vast majority of his fund’s assets is up 48% net of fees as of August 13, about triple the return of the S&P 500 Index. Big turnaround investments in Chipotle Mexican Grill and Starbucks are trouncing the market in 2019, as is his return to familiar holdings like Hilton Worldwide and even a highly speculative bet to back mortgage giants Fannie Mae and Freddie Mac, both of which remain in government conservatorship.
This week, Pershing Square disclosed it had exited two large investments, Automatic Data Processing and United Technologies, and plowed the proceeds into Berkshire Hathaway, the insurance and investing conglomerate headed by Warren Buffett and Charlie Munger. As opposed to Valeant, Berkshire has long been considered a defensive stock with low leverage, and it is managed by trustworthy operators.
Berkshire Hathaway owns high cash balances and has a tendency to do well in bad markets as Buffett and Munger, icons in American business, deploy funds at rock-bottom prices. Berkshire’s cash pile hit a record $122 billion in the second quarter. With markets now falling, it’s hard to not see new investment opportunities on the horizon.
Regards,
Ted
https://www.forbes.com/sites/antoinegara/2019/08/16/bill-ackman-pershing-square-berkshire-hathaway/#28f74763bef7M* Snapshot PSH:
https://www.morningstar.com/cefs/xams/psh/quote
