Bill Ackman, currently listed at no. 807 on Forbes' Billionaire List with a net worth of $3.6 billion, rose to Wall Street stardom in the early '90s with his first hedge fund Gotham Partners. He and partner David Berkowitz started Gotham with $3 million in investment capital; they had more than $500 million in assets under management toward the end of the decade.
In 2002, Ackman shut Gotham down and in 2004, launched Pershing Square Capital Management. The firm, famous for its short position against bond insurer MBIA, now has over $16 billion in assets under management. And in early 2020, Ackman, taking a bet as the pandemic began to envelop the world, turned a $27 million investment in credit default swipes into $2.6 billion.
Related: Warren Buffett just dumped $8 billion of stocks
But Ackman, speaking at CNBC's Delivering Alpha conference, said there is always more to learn about investing: "I'm a continuous learning machine and all mistakes are opportunities for learning."
And his preferred source of wisdom comes from Wall Street legend Warren Buffett.
"I've been a Warren Buffett devotee, he's been my unofficial mentor for many years," Ackman said. "And if you look at his trajectory, he started out as what today you'd call an activist hedge fund manager running a series of private partnerships; over time, he took control of what was best described as a crappy textile company."
In the early 1960s, Buffett began acquiring shares in a struggling textile firm called Berkshire Hathaway. By 1964, he had taken control of the company and begun transforming it into the legendary investment holding company it is today.
"The access to the permanency of that capital gave him the ability to take the very long-term view in a world where people in the investment management business have to make short-term decisions because their capital can leave," Ackman said. "We really five years ago got to that place in terms of the structure of our organization. It allows us to take the very long-term view."
I have learned an enormous amount from Charlie Munger. These are some great excerpts of his wisdom. https://t.co/s9XnR7Gahv
— Bill Ackman (@BillAckman) September 29, 2023
One of Buffett's biggest rules is to identify strong businesses that can produce quality earnings. Once identified and purchased, his method is to simply hold and reap the eventual rewards.
Berkshire Hathaway received more than $800 million in 2022 in dividends from its favorite company: Apple (AAPL) -).
"All we do is we own really great businesses," Ackman said. "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."
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