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Ackman says hedge fund up 27% year to date, dumped Berkshire

Stock MarketsJun 13, 2020 10:50PM ET
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© Reuters.

BOSTON (Reuters) - William Ackman's hedge fund is boasting double-digit gains at a time many portfolios have sunk along with the economy during the coronavirus pandemic, after the billionaire investor plowed cash into a number of companies he already owned and dumped Warren Buffett's Berkshire Hathaway among other stocks.

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

Ackman, who began worrying about the health and market impact of the pandemic months ago, famously hedged his portfolio with a $27 million bet that turned into a $2.7 billion windfall that he reinvested in the stock market in late March, buying bigger stakes in companies he was already betting on.

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

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

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

This year's gains come on the heels of last year's 58.1% return, the single best year since Pershing Square's founding in 2004, and signal that Ackman is still having success with his back-to-basics strategy where in 2018, he took back control of making investments instead of being the firm's chief marketer.

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, Ackman pounced on the beaten-down stock of Lowe's, arguing that the time for long-delayed home improvement projects is now.

"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.

 

Ackman says hedge fund up 27% year to date, dumped Berkshire
 

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Comments (6)
gary ryan
gary ryan Jun 14, 2020 9:32PM ET
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pro's are pro's they have to protect there jobs too and they will use all tools availble to achieve success.I do, you do and everybody does except the less skilled "professional" and thats from this topic through all trades and industries
gary ryan
gary ryan Jun 14, 2020 9:32PM ET
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i will add that if a stock your interested in is being shorted thats your chance to buy more at a cheaper price..it works for me, anyways....
Adriano Sarmento
Adriano Sarmento Jun 14, 2020 4:31PM ET
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Never ever believe in billionair talks
keano giggsy
keano giggsy Jun 14, 2020 4:49AM ET
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He is the guy who always short herbal life and Tesla right
YC Teng
YC Teng Jun 14, 2020 3:11AM ET
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Don't be fooled. He is shorting the market now to make another few billions....It is afterall a ZERO Sum game, Robinhood!
Serik Akilbaev
Serik Akilbaev Jun 13, 2020 11:53PM ET
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(NYSE)Sq? :-)))
bruce johnson
bruce johnson Jun 13, 2020 11:30PM ET
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Hilton cracks me up maybe a dead cat bounce.
gary ryan
gary ryan Jun 13, 2020 11:30PM ET
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probably not due to the fact all the wealthiest ppl will still go on holidays etc etc etc
 
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