If you’ve got a portfolio headache on your hands, don’t worry—legendary investor Bill Ackman says it’ll soon become a “blip.”
The hedge fund manager, who founded Pershing Square Capital in 2004 and serves as its CEO, has built up a fortune of $3.7 billion during his decades-long career, according to Forbes.
But in a recent interview, he said looking back over the past two decades reinforces his belief that investing can be fairly straightforward if some simple principles are followed.
Ackman, a Harvard Business School graduate, has such faith in his rules of investing that they’re engraved in a stone tablet and placed on the desk of every employee at Pershing Square Capital’s New York base.
Speaking to The Julia La Roche Show in an interview published last week, Ackman said he was a “big believer” in strategy and maintaining focus on longer-term outcomes.
“If you look at the chart of Pershing Square over time, the difficult periods look like nothing now,” he said. “You won’t even notice the little blip in a decade or two decades, and you just have to have that kind of perspective.”
Pershing Square’s results last year could be the perfect example of why Ackman advocates for a wider lens perspective.
In 2022, the hedge fund posted an 8.8% decline as stocks suffered their worst year since the Financial Crisis—but that loss followed three consecutive years of double-digit gains: 26.9% in 2021, 70.2% in 2020, and a 58.1% spike in 2019.
In last week’s interview, Ackman also explained his “basic commandments” for investing.
“We want to buy the best businesses in the world,” he said.
He described these as firms that are “simple, predictable, free-cash-flow generative, dominant companies with, as Warren Buffett would say, a moat around them.”
The economic moat theory, which was popularized by the Berkshire Hathaway chairman, refers to a business’s ability to maintain an advantage over its competitors in order to protect its market share and long-term financial outlook.
Also on the Pershing Square checklist is a strong balance sheet and excellent governance.
“The short version of the principles are own the best, super-durable companies you can find with conservative balance sheets,” Ackman said. “Buy them at attractive prices, and use our influence to make sure they’re managed and governed correctly. That’s it, pretty simple.”
It’s a tactic that appears to have worked: According to financial services publication Seeking Alpha, Pershing Square has outperformed the S&P 500 over the past 20 years, growing its investments at an annual rate of 16.1%.
Investing can be ‘very simple’
While his “commandments” are a simple enough list, Ackman revealed he rarely finds businesses that tick every box for a fair price.
And although Ackman knows what he is looking for, he also revealed the red flag he doesn’t want to see from businesses: “You don’t want a company that has to constantly raise money in order to implement a business plan.”
It’s avoiding these short-term hiccups and focusing on the long term that’s key to Ackman’s strategy, he added.
“Stay away from shorting stocks, avoid commodity-sensitive industries, and you do great,” he advised. “There’s a part of investing that’s very simple…Just make sure you think about the potential for disruption, because we’re in a world where technology is a very dynamic force.”
Ackman, who has previously said he looks up to fellow billionaire investor and “mentor” Warren Buffett, appears to be taking a lesson from the Buffett school of thinking when it comes to the simplicity of his “commandments.”
Buffett himself has also given out notably simple investment advice in the past.
“The first rule of an investment is ‘don’t lose money,’” Buffett once said. “And the second rule of an investment is ‘don’t forget the first rule.’ And that’s all the rules there are.”
Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
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