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Ackman Interview w/ Bloomberg


txlaw
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Thank you for posting. I'm about halfway through, and I'm impressed. Very clear thinker.

 

I wasn't too familiar with Ackman, but I now want to learn more. He doesn't really operate in the kinds of businesses that I like, but his mental processes seem very interesting.

 

I've put a hold at the library on a book about him (I think the title is Confidence Game), and I was wondering if there was a good source of his investor letters or something of the sort..? If anyone has a few URLs or titles to shares, that'd be great.

 

edit: Still haven't found archive of his letters, but found this Charlie Rose interview if others are interested: http://www.charlierose.com/view/interview/9498

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Ackman is legit.  Unlike some of his cohorts, I might actually consider him worthy of being held up as a "guru."

 

Although I question some of his decisions -- like the TGT debacle and pushing for the MBI holdco and other financial holdcos to be zeros "for the good of the country" -- I can't deny that he's damn smart.

 

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I love Ackman, and his track record is fantastic.

 

Other than the Target fund that went under!  ;D  Cheers!

 

I think that interview was the first time Ackman really detailed his real estate thesis on Target. He said at the time they thought a REIT solution was worth $40 per share!!! That is unbelievable. I had no idea he thought the real estate was worth that much - no wonder he had the conviction that he did and was able to raise the money he did. I am SHOCKED the BOD didn't look at that (assuming he gave them an approximation of what he thought the REIT was worth to shareholders) and immediately jump at the idea.

 

Further, I love his singular thinking on American corporate boards - EMBARRASSING. hahaha

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I've put a hold at the library on a book about him (I think the title is Confidence Game

 

Yes, it's called Confidence Game.  It's a very good book.  Enjoyable.  Some decent background on the financial crisis as well.

 

I'd characterize the book as mostly about his battle with MBIA.  You must read this book if you're invested in MBIA.

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I don't know much about MBIA, but I'll check it out. The man seems brilliant, and if I only get one good idea out of it, it'll be worth it.

 

The only thing that makes me sad is that our civilization creates so much incentives for people as smart as Ackman is to become hedge fund managers rather than cancer researchers or engineers working on ultracapacitors or whatever. The world would be a better place if more brainiacs worked in science rather than finance...

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Good points, and I don't know enough about Ackman to know how he's 'wired' and what his skills are, but I know that a lot of people with physics and advanced math backgrounds end up in finance, devising complex derivatives and programming quant software... To me that's mostly a waste for our civilization.

 

Buffett is a good example of someone who's pretty specialized in capital allocation, but many other extremely smart people could just as easily have studied engineering or biology at MIT.

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well this is capitalism at work right

 

capitalism is the best asset allocator that we know of

 

Two points:

 

1) It's not because something happens in a system that works that the result is good. Natural selection makes us die of the diseases of old age because these happen in an evolutionary blind spot (for most of humanity's existence, people didn't live that old, so there was no selective pressure). In the same way, if capitalism allocates resources to unproductive areas, that doesn't make it good.

 

2) What we have is a man-made system, not some platonic ideal of capitalism. In an alternate history where there were slightly different rules for the markets and for businesses, the current bloated financial sector that doesn't produce much value and attracts a lot of our best brains wouldn't be the same at all, so it's not like it's an untouchable edifice carved in stone. I'm no expert in those areas, but let's say that the rules said that a lot more collateral was required for most derivatives, and that HFT funds had to pay X cents per share that they hold for less than Y amount of time, a lot of things would change, and our civilization would probably do better, not worse.

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