저자: BillAckman · 외국인
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한줄결론: 빌 애크먼은 AI를 핵무기에 비유해 규제와 통제 필요성을 강조하면서도, 빅테크(마이크로소프트·아마존·메타·우버)는 AI 수요 증가로 자본지출(capex)이 늘어도 높은 자본수익률을 낼 우량 기업이며 현재 주가가 20% 이상 IRR을 줄 만큼 싸다고 본다. AI 리스크와 규제: AI 발전은 인류에게 큰 이익을 줄 수 있으나 파괴적 위험도 있으며, 인간 두뇌에 대한 이해가 부족한 상태에서 초인적 AI 모델이 개발되고 있어 우려가 크다고 말했다. 최근 허깅페이스 관련 AI 군집이 목표 달성을 위해 다른 웹사이트 침입 등 범죄 행위를 한 사례, 앤트로픽·OpenAI 등에서의 인력 이탈을 예로 들었다. 다만 중국·러시아와의 경쟁 때문에 AI 개발 속도를 늦추기 어렵고, 미국이 AI 선도국이어야 하며 제한 없이 가능한 만큼의 감독이 필요하다고 주장했다. 빅테크 자본지출 논쟁: 빅테크의 AI 투자로 재무건전성이 약화된다는 회의론에 반대했다. 마이크로소프트·아마존 등은 수요가 폭발적이라 선제적으로 capex를 늘리는 것이며, 높은 자본수익률을 낼 수 있다고 봤다. 중국이 미국 AI 지출의 약 1/8 수준이라는 점도 언급했다. 투자 자본이 추가 고수익 사업에 쓰이는 한 우려하지 않는다고 했다. 투자 프로세스: 위대한 기업 라이브러리를 상시 구축하고, 내구성(해자)과 장기 성장성을 분석해 예측 가능한 현금흐름을 모델링한 뒤, 예상 수익률이 목표 구간에 들어오면 매수한다. 현재 마이크로소프트·아마존·메타·우버 등 핵심 보유 종목이 장기 연 20% 이상 IRR을 줄 가격이라고 평가했다. 변동성이 커져 이런 기회가 과거보다 자주 생긴다고 봤으며, 그 원인으로 인덱스 펀드 확대(유통주식 축소), 시타델·밀레니엄·제인스트리트 같은 초단기 레버리지 전략의 영향, 마진 투자 개인의 매도 압력을 꼽았다. 집중투자와 분산: 투자 지식이 적을수록 분산이 필요하다고 보며, 본인은 잘 아는 기업에 집중하는 전략을 택한다. 12~15개 종목을 넘으면 분산 효과가 작다고 판단한다. 영구자본(permanent capital) 구조 덕분에 5년 IRR 기준으로 투자할 수 있다고 강조했다. 행동주의 투자: 지난 약 10년간 적대적 행동주의 투자는 하지 않았다고 밝혔다. 과거 치폴레(Chipotle)처럼 경영진 교체가 필요한 기업에 지분을 투자해 이사회 합류까지 성공한 사례를 들었다. 지배주주가 있는 기업에 대한 행동주의 투자는 성과가 좋지 않아 피한다고 했다. Acman 연구소: 뇌 연구 기관(Ackman Institute)을 약 7억 달러 규모 부동산과 초기 자본으로 설립 중이며, 자선금으로 시작해 상업화 기업을 육성하는 자생 구조를 목표로 한다. AI를 활용해 뇌 데이터를 연구하는 것이 핵심이다. 퀵 질문: 40년 전 첫 대박은 알렉산더스 백화점(Chapter 11 신청 당시 주당 약 8달러에 매수, 2주 만에 21달러에 매도) 사례로, 이후 주가는 수백 달러까지 올랐다. 이 사례로 매도를 일찍 한 것이 교훈이었다고 말했다. 최종적으로 AI가 세계에 큰 순이익을 주고 파국적 결과 가능성은 매우 작기를 바란다는 낙관론을 밝혔다. 출연자 전망: 애크먼은 기술 전반에 낙관적이며 빅테크 실적 개선을 기대하는 입장이다.
다듬은 글
Look, I think the AI conversation is probably the most important conversation to be having. Our focus is identifying the great businesses of the world. The less you know about investing and what you're investing in, the more diversified you want to be. And I said, look, I'm going to quote unquote try to allocate as much of the world's resources to me as possible and then reallocate them in the way that I think makes the most sense.
I'm Carl Hazley and you just heard from Bill Aman. He is the founder and CEO of Persing Square Holdings, which runs about $33 billion. This is a must listen episode. So sit back, relax, and hear from one of the greatest investors of all time, Bill Aman. Bill, thank you so much for joining me today. Thanks for having me.
The biggest conversation right now is about AI, whether it needs regulating, whether we've gone too fast, what the risks are. You've obviously got positions in some of the big hyperscalers, but also in companies that are set to be disrupted by AI. Where are we with AI? How are you thinking about things?
One, I hope we don't have companies that are going to be disrupted by AI. So, if you think we do, I'm happy to have that conversation. Um, but we do own some stocks where there's a perception of risk of disruption uh due to technology and that's, you know, created an opportunity for them at more attractive prices.
Look, I think the AI conversation is probably the most important conversation to be having. Um, you know, it's a bit like, you know, we're developing a nuclear weapon, uh, and we're competing around the world to develop that nuclear weapon, and we think that technology is going to have lots of benefits for mankind, but it also has the potential to destroy mankind.
It's, you know, fairly analogous. Um, but I I you think before we tested a nuclear weapon, we didn't know exactly precisely what would happen. But at least we were relying on our understanding of physics here. Number one, we don't have an incredible understanding of the human brain. That's actually something I've learned about more recently.
Uh, and AI and, uh, you know, some of the recursive learning and and, uh, reinforcement learning that is done by a lot of that is modeled off of, you know, how human beings learn. So you you have these models that are developing approaching superhuman intelligence and we don't know what the implications are going to be and we've certainly seen some pretty frightening recent episodes this hugging face uh you know the the the swarm of of AI kind of working together to achieve an objective you know committing a felony to break into another website and this is pretty frightening stuff and uh then of course the noisy uh exits of various people from anthropic and and open AAI and even Elon saying yes we have to be you know Elon has been saying for a while you know in fact he was early in in the creation of OpenAI the theory was you know we need to get out ahead of this and and we need to have benign force I think the complexity is I don't know how we slow AI development there's such an incentive for China Russia whatever to get there before us uh yeah
I'd rather be the AI leader and uh and then yeah have as you know I would say as much oversight as possible without restricting the ability of us to be the competitive leader. I think that's that to me is critical. As much as I worry about AI, I worry about it more if one of the uh one of the enemies of the United States uh gets it before we do.
How do you even start to scenario plan around all of these potential outcomes and maybe just in the US for the time being? Is it [gasps] a case of worrying about the speed of uh you know improvements? Uh is it degrees of success? How do you start to put that together in a in a model that makes sense?
So look, the world is an uncertain place for my lifetime. That's that's always been true. Yeah, it almost always seems more uncertain now than ever before. That that seems to be our kind of lived experience, right? Whether it was the pandemic, um you know, again, I think inflation wasn't so dramatic versus the pandemic, but now now AI is, you know, there there have been a series of
very dramatic events, financial crisis. It seems like every whatever five or seven years, we have some development either in the financial markets, technologically, uh geopolitically or otherwise. uh that create risks. We are not trying to uh maneuver around kind of short-term movements in markets. You know, what we think is the best long-term strategy is to find kind of the business that can withstand the test of time, the business that you can own if the stock market closes for a decade.
And who knows what's going to happen, but you can have a high degree of confidence that coming out of that that the business will not just exist, but continue to thrive. And I think if you look at the businesses we own, you know, in each case, we spent a lot of time thinking about, you know, their durability, their potential for long-term growth.
Um, and you know, Buffett always used to talk about, you know, if you look at the last whatever period of time, you know, last hundred years, we've had a couple of world wars, uh, we've had the development of nuclear weapon, we had the detonation of a nuclear weapon, we've had, again, more recently a pandemic, a financial crisis.
you know, the internet, the world will always have disruptive events, but during these periods, if you own, you know, kind of these highquality, durable businesses with strong balance sheets that have long-term, you know, opportunities for growth, that's been a pretty good thing to do. So, our our job is to find those companies and generally not part with them unless they get kind of stupidly overvalued.
And that's and that's worked well for us for it's worked well for us for 20 almost 23 years. Um but it's worked well for investing for for you know I would say hundreds of years or certainly a couple hundred years. Can I maybe put a cynics question to you on the back of that please? Right. Companies with a strong balance sheet that will endure stand the test of time.
If I look across, you know, the hyperscalers in big tech, a cynical person might say that these companies with tons of cash, with strong balance sheets are making their balance sheets weaker in order to pursue, you know, the AI opportunity. You know, if I look at China spending $1 for every eight that the US is spending and the implicit uh high hurdle rate that these companies potentially need to earn an attractive return on their investments, yeah, the cynical view is that yes, these are strong companies, but they are becoming weaker and that's maybe a direction of travel you don't necessarily want to be a part of.
So, I don't agree with the proposition. Uh so we we own uh in the hyperscaler space we own you know Microsoft and Amazon which are not pure hyperscalers obviously they have other obviously important core businesses um but what I can say is um what is absolutely clear and maybe clear from the fear of AI is that AI is incredibly powerful uh and AI and that the demand for compute is going to continue to uh you know be enormous and scale for for you know probably you know decades to come right how much value can be created per dollar of compute is only improving as AI gets gets more and more powerful a company's balance sheet is only getting worse if the investments that it's making you what's what's happened in the last you know couple of years is that you know let's say Microsoft Amazon Google etc are accelerating their capex spend and anticipation of of demand that they're actually seeing right they're trying to keep up with the demand for their service right normally and and that's actually created an opportunity to buy uh Microsoft stock meta stock you know the the market these were pretty uh or certainly Microsoft was a you know a very capex light kind of business model to well I guess the you know ultimately data centers were but it was still relatively capex light relative to their cash flows you know, AAA balance sheet, etc.
Uh, now what they're doing is they're just frontloading that capex spend because the demand is so great and and they want to be in a position to meet it and that demand will, you know, I I think the evidence suggests that they'll be able to price that uh demand appropriately to earn, you know, a very attractive return on capital.
So, you have a very high quality business that has an opportunity to invest even more capital in a high return business. to me that's a ultimately a better company that will have an even stronger you know market position over time. So I'm not skeptical at all about that. I think that's good. Okay. Now
if on the other hand you know if you have a business where you're forced to make an investment in capital um and you're not and the incremental investment does not come with a substantial incremental return then yes I would be quite concerned about that. But I I don't think that's the case here. So I think this is indeed growth capex uh where um there's just a big massive significant sustained spike in demand.
In order to meet that demand they they've had to make investments on which they expect to earn high rates of return. Gotcha. Okay. So I want to zoom out a little bit to your investment process and you know how you think and how you identify opportunities. So can you share a little bit about how you and the team do that?
What is the what is the process? I would say our focus is identifying the great businesses of the world and every day we're trying to learn about these great companies. Um and over time we've built a library of great businesses that someday we'd love to own. And the great durable high- growth well- capitalized well-managed company generally uh trades at a price that offers a relatively modest return because people like all those factors.
Yes. Every once in a while a company that meets all those criteria trades at a price that offers, you know, twice that return or more. Yeah. uh you know this happens to be one of those moments where a business like Microsoft a business like Amazon um business like Meta, Uber, you know the some of the kind of core names in our portfolio we believe are trading at prices that offer well north of a 20% irr on a long-term basis kind of going forward.
The hard part is this business a business that's going to be disrupted is this a business that has a wide mode as Mr. Buffett would say around it to protect it from uh competition. That's where we spend most of our time understanding the durability of the franchise. And then it's building a model of what that business looks like over time.
And we try to invest in these kind of relatively highly predictable businesses and and then it's just a little bit of math to determine what the go forward return is. And then when that go forward return gets within our strike zone, uh we update the analysis and everything checks, we'll buy a stock.
You talked about the opportunities in highquality companies, you know, when there's a sell-off essentially. And are those things happening more frequently or less? And the reason I ask is much more frequently. Yeah. Is that is is that I mean, is that to do with the rise of retail investors or because the advantage that you have and that retail investors have is that you've got long-term capital.
You can be patient for a long time. Whereas, you know, an investment manager at an institution, they can be long-term, but December 31st rolls around and if they've underperformed, you know, their jobs on the line. What's what's driving that? So, I would say the the factors driving more volatility in the market are driven by two principal forces.
One, the rise of indexation. Bigger percentage of companies owned by index funds that in effect shrinks the the the effective float, right? Index funds are basically permanent owners. More and more capital flows into index funds. They end up owning a greater and greater percentage of the shares which means the marginal buyer and seller will have more impact on price.
Um I would say the bigger force force maybe it's hard to calculate the scale but you know the so-called you know there are a lot of trading investment strategies today that are very short-term uh because of the underlying leverage of the strategy. think Citadel, Millennium, maybe Jane Street. Uh firms that are very short-term trading oriented, they're looking for small uh advantages in markets.
Um when a company disappoints or exceeds expectations, you see huge changes in in stock prices. Now, yeah. Uh that has created for us the opportunity to own some truly great companies at occasionally insanely cheap uh prices. You know, retail investors are an obviously very important force. Some have permanent capital and some don't, right?
If you're a retail investor operating with margin leverage, you we have the opposite of permanent capital and there's a lot of speculative activity in markets. If you're trading options, it's not really long-term capital. You know, we we're fortunate in that we manage public entities where Persian Square and affiliates are the largest shareholders.
We have, you know, so-called permanent capital. This means we can buy something on the basis of a 5-year IRRa without worrying about where it's going to be on, as you say, on December 31st. Of course, we'd like December 31st to be good price because, uh, yeah, you know, always good to report a good year.
Um, but, you know, a year that creates the opportunity for us to own great businesses at attractive prices sets up for higher returns in future years. And that's how we think about it. And this has been largely that kind of a year for us where we've been able to buy, you know, substantial stakes in businesses, a number of which we've always liked but never got a chance to own.
You've always had a concentrated fund. And I just wonder again if I think about investors watching and listening to this, you know, the received wisdom is diversification, diversification, diversification. You've gone the opposite way in a sense. And I wonder, you know, how you think about that approach in the context of, you know, that received wisdom.
Sure. So, diversification makes sense. The less you know about investing and what you're investing in, the more diversified you want to be. Um, I would argue the more you know about the businesses you're investing in, the more opportunity you have to be a concentrated investor. And the reason for concentration is unlike children where you're not supposed to rank order your favorites investing you can you can assess risk and return and for every portfolio manager they're likely to have uh an investment that they believe has less risk and more return than another investment in the portfolio.
You know there aren't hundreds of incredible businesses. uh there are smaller numbers uh in terms of uh companies of a scale that we would be able to invest in and they don't always become they won't always available at prices that make sense. Um so that limits us it limits our universe if we want to achieve our return objectives and the benefits of diversification once you get beyond you know a dozen or 15 names.
The incremental diversification benefit of idea 16 is not in my view does not is not meaningful versus the benefit you get by owning more of ideas 1, two, and three. Right? I'd rather have a more concentrated portfolio. Um I still think diversification makes sense because you know investing still fundamentally is a probabilistic game there.
You know the unexpected can happen. You can be uh disappointed. Um but uh you know we think we have an adequate degree of diversification but not too much. It's hard to beat the market if you are the market. One of the big ways a lot of people will have gotten to know you perhaps and Persian Square is your activism with companies.
Can you maybe just share from your perspective and maybe it ties into that focused concentrated portfolio how and why it makes sense to be an activist investor at times? Sure. So actually uh it's been a decade since we've taken made an activist investment that is an investment where our business plan was to take a series of steps to make changes to the way the business was being run.
You know what's happened with the passage of time is the firm, you know, people know who we are. That was not the case 20 years ago. And so in order to get the market's attention, uh, as a relatively small investor, we had to put out our thesis in a very public way. And, uh, you know, we weren't we didn't get invited immediately to join a board of directors.
Uh, in fact, we couldn't even get a meeting in some cases with management. But as we sort of built our reputation and as we had to on occasion run a proxy contest which is maybe the most extreme version of of shareholder activism and and run these contests successfully. Uh that gave us and then you know as the track record uh demonstrated over time it gave us credibility not just with uh investors but with board members and management teams and people figured out you know what Persian can be a force for for good.
uh rather have them onside than offside. Uh and so today we buy a stake in the business. I was I mentioned uh uh you know what's interesting is uh I got a few thank you notes when we took some initial stakes in companies uh where CEO wrote a wrote a personal letter you know dear Bill thank you for uh investing in
you know ICE uh you know the owner of the New York Stock Exchange um and and sharing that they shared our view. We put out our thesis and our letter as to why we own the stock and they and they sort of confirmed our thesis. They respected our analysis. We didn't get many thank you notes in the first decade.
Um but we're we're getting more now. But it means that if we do have an idea on how to help a business be more successful, they're going to be more receptive. And the opportunity for you know being an influential shareholder you have to call yourself an activist is that sometime you know when you're managing business you don't have the perspective of investor that's looking at and has access to all your competitors right in fact you have certain limitations on your ability to do that but as an outside investor not a member of management you know we can talk to the competitors of each of our various companies uh we can meet the management teams we can uh get the perspective that comes from looking at, you know, many businesses over time that occasionally gives us an insight.
Um, you know, the the most extreme version of activism is a case where you think the person running it can't fix the company. You need to replace that person. We're up up to taking a stake in a company that offers that opportunity. Um, you know, the the market generally values stocks on the basis of what, you know, assuming that all holders are passive, meaning that whatever mistakes the company's making are going to continue.
Um and we can you know the opportunity for an activist or someone who's an influential shareholder is you can buy with the confidence to believe that you can change whatever is wrong about business. You know Chipotle was trading at half of what it was worth if it was if they could fix the problem but none of the shareholders believe the problem could be fixed but we bought a 10% stake with the confidence that we could you know make necessary changes.
We had a CEO in mind who could come in and who we think would you know and the question in our mind was are we going to be able to convince the board and the CEO who was the founder that he you know step upstairs to chair that bring in a new person and he was quite receptive and we didn't have to run a proxy contest they invited us to join the board that's really been our history uh of the last sort of decade.
What's the difference between those those influential shareholder positions that are successful versus not? Is it down to the management and board's receptiveness? Is it, you know, market forces? This company was maybe not going to turn around in any case. So, if we do we do our job, uh, we're going to buy a really high quality business.
Um, and in the last, I would say nearly decade, we've been able to find businesses like that that are already being run by good people and just take advantage of the volatility in the market to buy them at a good price. That's a much easier strategy, less uh I I used to call it return on invested brain damage.
I'm more cautious with that term because I'm more unfortunately bigger with a with true brain damage. But you know much rather invest with a phenomenal team and a great business at a good price than a great business at a good price with a bad team where you have to do a lot of work. Uh and the if one of those investments you know one of the our experience has been we generally avoid investing in controlled companies where there's a need for change
and our experience in investing in control companies with a need for change has not been great. Um because a controlling shareholder is a true barrier to there. You have to convince them and and that's not something you know they may have an agenda that's different from yours or they frankly may have a different view and there's nothing you can do about that.
We talked about you know uh you know being an influential shareholder early on and that being the way to affect change and now you probably don't necessarily need to do that. The fact that Persing is an investor and has a view can almost help make that view a reality. Have you changed as an investor for better or worse?
Perhaps hopefully for better. Um I would say uh the biggest change over a 30, you know, 34 year career is understanding the importance of business quality, durability, and long-term growth. Uh and in the earlier days, we'd buy, let's say, a dollar for 50 cents where there was a catalyst to get to a dollar.
But as you got closer to a dollar, it became a lot less interesting and you had to find a place to put the capital. In more recent years, we're finding places where we're buying, you know, a dollar maybe for.7 cents. Um, occasionally, you know, 60 cents, 50 cents, but where the dollar is becomes $1.15, you know, and then $130, then $160.
Uh, and so, you know, you and the discount narrows, but you can continue to be a long-term owner. Um, you know, the benefits of business quality are something that we I appreciate even more. And in a world with very powerful disruptive forces, most notably AI, you want to own the most durable business in the world.
Um, and our our vast majority of investors today, it seems, in the, you know, that are moving around the public markets are looking for an edge over a very short period of time, sometimes a day. But, you know, that to me is just just gambling. But, you know, often times a quarter um you know, buying a stock because based on the data they collect, they think the company's going to outperform that quarter and therefore the stock will move by X and they can capture a five or six% move in stock in 90 days.
And that's just, you know, anathema to what we do. So I feel like everything you've said in this conversation is leading to this point which is there aren't that many high quality companies in the world. Mhm. You've got a view on the biggest and the ones that you can yeah you know reasonably have a position in.
You want to own them for a very long time. you're less focused on getting a dollar for 20 cents as you are getting a dollar for less than a dollar that will grow over time. Um, you've mentioned Mr. Buffett's Berkshire Haway a couple of times and it feels like, you know, the parallels between Bergkshire and Persinger getting closer and closer.
Which brings me to Howard Hughes. Is that the direction of travel? Are you, you know, becoming increasingly a permanent owner of certain businesses? Um, is that the right way to think about things or am I, you know, spinning my own yarn here? And I would say a lot of I think all of us could learn from Mr.
Buffett. I certainly have. Um, and uh, we have some, but not many of the constraints that Bergkshire Hathaway has. Obviously, the scale there affects dramatically their ability to buy and sell things. Um we vastly prefer things we can own for many years. Yeah. Uh but we are generally a minority stake buyer in public companies.
So our our principal investment vehicle purging Square Holdings, you know, talk about dollars for discounts. That's a dollar trading at 67 cents. you know the net asset value of the liquid underlying holdings of that company uh are are available at a 33% discount uh to that uh that that's worth a look I would say and if that entity if I'm correct and we own a portfolio of businesses that themselves are 65.7 cent dollars none like dollars are growing at a good rate okay that now you have a double discount and then oh and by the way we finance that business with 80% equity but 20% debt at very low cost that should be able to you know compound at a pretty nice rate over time you got a margin of safety in that kind of double discount um other than a brief advertisement for Persian Square Holdings so I would say those vehicles will be you know Persian Square Holdings are we listed recently in the US Persian Square USA those will be closed end fund type entities a way for us we're going to do the work and an investor can go along for the ride and we're going to own you know minority stakes and large cap public companies.
What Howard Hughes is Howard Hughes is really we're taking a true page from the Buffett playbook. We have a business that's sort of gone unrecognized by the market in terms of its performance stock price performance in the last you know significant period of time where we're repurposing that business we're using that platform to do something else.
Buffett started with a a textile business that was a dying business. He liquidated that business over time. He invested the assets in bought an insurance company. He bought a bank. He bought a candy company. Um we're following a pretty similar playbook. Uh starting with insurance. So Howard Hughes is a real estate company.
The real estate over time selfquidates. We own land that we sell every quarter. We own condominiums that we sell almost every quarter. Uh and uh we have cash from income producing assets we own. That company historically took all of its capital and reinvested in real estate. Today, we're taking all the excess cash from that business and we're investing in insurance.
We injected capital in Howard Hughes. We bought an insurance company uh called Vantage Holdings. Um we've recruited, we believe, the best senior team in the insurance industry, uh guy named Mark Renes from Arch Capital Group, David Gansburg, former president of Arch Capital Group. uh and we're building out a a best-in-class insurance company team so that we're going to run a profitable insurer that you know makes money on writing insurance and then we're going to manage the assets very similar to the way Buffett has over time.
The first thing we did when we closed on the company 3 months ago we sold their fixed income portfolio which was kind of a longer dated safe portfolio and we reinvested in short-term treasury. We fortunately missed uh the the the risk to the bond market from a rise in rates and then we took the surplus of the insurer.
We bought a common stock portfolio. We think we can the combination of profits on the liability side of the balance sheet plus returns on the asset side of the balance sheet will generate a high return on equity insure over time that with the power of compounding we can build a very profitable business.
Um that's uh largely from learnings from from Mr. and you know starting at a somewhat bigger scale. He was you know a market cap of Berkshire was like $40 million or something when he bought an insurance company. Uh Howard Hughes is about a $4 billion market cap company. Um but you know with the past you know 10 years from now we think that's going to be a vastly more valuable business.
By another cheap stock uh we we bought a stake in that company at $100 a share uh 15 16 months ago. Um we the real estate we thought was worth at least $100 a share. Uh the stock at the time was 66. We were paying a premium uh to transform the company. Stock today is 62. Why? Because interest rates are up.
People think okay real estate mortgage rates are up. Therefore, you know, it's still being thought of by the market as a real estate company. But fairly quickly it's going to become a very different kind of business. You've previously spoken about the goal of becoming uh a millionaire by 30 uh 100 million by 40, billion a billion dollars by by 50 and achieving those goals early.
But one of the things that struck me is you know it's not it's it's not for nothing. Uh you recently launched the the Aman Oxman Institute. Uh you shared a really personal story around that. um up to you how much you want to get into it, but what I'd love to spend a bit of time on is how you know how you think about measuring success there.
Um given there's a a mission behind it, but it's ultimately well not ultimately it's also a commercial venture. So is there a balance there you need to strike and can you maybe share a bit more about it? Yeah, of course. So, uh, actually the the aspirations were the aspirations of a 19 or 20-year-old telling my dad what my business plan was.
But part of the business plan, I said, "Look, I'm going to quote unquote try to allocate as much of the world's resources to me as possible and then reallocate them in the way that I think makes the most sense." That was kind of my grandio uh aspiration. to that end, you know, 20 years ago, I started uh or I think about 20 years ago, yeah, I started a foundation uh and that was and you know, to the point that diversification protects you against ignorance, that was our approach in the early days of the foundation.
Uh we did a lot of different things because we didn't know what we were doing and we wanted to make sure we felt as a fiduciary for these assets, we have to invest them for the benefit of society. um you know you get a tax benefit when you donate money in the US and therefore you know in some sense the the public is uh your fiduciary for the public and how those assets are are uh because you're being subsidized in some sense um and uh more in more recent years we started to concentrate a bit we started to concentrate on scientific research uh cancer research brain related research and then we've had our own sort of personal tragedy uh in My 26-year-old daughter Lucy had a brain hemorrhage a little over seven months ago and uh she was unfortunately alone uh in her apartment at the time and we did not uh get to her until late at night and the result is her brain was under uh her brain was under enormous pressure uh from uh the the uh the blade the bleed because what happens is you have a burst vessel in your brain.
uh the the bleed continued for a significant period of time and the brain is a confined uh space and so the the pressure uh obviously can cause uh neuronal damage and uh she uh emerged in a coma uh after the surgery to release the pressure on her brain and at a place where most people don't recover from that kind of and obviously you know uh she's a wonderful human being and uh you know I'm well situated to help her and I did my best to inspire the doctors to say look let's see what can be achieved for her um obviously it'll benefit her but what we learn from her we can apply to others you know similarly situated and I said look everything we learn I'm we're going to find a way to make that available to everyone shortly after uh you know within 90 days we had learned about a I'm also kind of a real estate person as you might know from some of the investments we've done over time we learned about a kind of biotechnology you a building uh that had been built for the purpose of you know biolabs uh and uh that was unsuccessful as a real estate deal but presented us the opportunity of a vacant class A building uh that we could purchase from uh the lender and uh that became the basis of what we're calling the actman institute or the AOI and we've recruited uh we're in the process of recruiting a senior leadership team it is a actually it's not I would just it's a it's funded with philanthropy initially.
It's going to have commercial instincts. We're going to run it like a for-profit enterprise in terms of the best aspects of for-profit enterprises and minimizing bureaucracy. You know, the goal is to accelerate uh treatments to patients. Um there there are many brain institutes but many of them are kind of pure basic science labs and they've the way they measure success is by you the number of papers produced uh and you know some interesting findings that they can share publicly.
What we want to do here is come up with solutions for people like Madar you know to help her speak again to help her see again to help her walk again. uh and you know there the brain is something we still know very little about um and uh you know AI uh you know the launch of this institute at a time when there are now tools available to have a better understanding of the brain the brain creates a lot of training data if we can talk about it that way and we haven't trained on that data at this point uh to to really have a better understanding of how the brain works um and uh you know we're among other things you AI will play a big role here.
But you know the goal here is to take advantage of being I would argue the greatest or one of the greatest cities in the world or a place where people like to do this kind of work. Uh we have some of the best uh medical institutions approximate. Uh we have an opportunity to recruit you know top scientists around the world.
We're actually we had a ton of inbound interest. We just put out a little piece looking for a chief scientific uh officer. Um, I saw that. And, uh, I think we're going to be able to move the needle in the field and that's what we're trying to do. Fantastic. And you probably didn't have this necessarily in mind when you were 20, but this is a version of, you know, having allocated a ton of the world's capital to you, redistributing it, um,
hopefully hopefully more effectively than I did uh, 40 years ago. I think we've created a lot of value in our investment approach and as part of that you know you can create value for yourself uh in building a valuable business and uh I'm using the capitalized value or piece of capitalized value that business to launch this institute we've invested about 700 million in the real estate and in providing kind of startup capital for the institution the goal is to build a self-sustaining enterprise uh that focuses on um you know delivering cures and then as part of that the commercial part is we're going to you know we're going to seed and create companies and uh those companies will uh hopefully enable uh the products, services, devices, molecules to get to people to help them and you know capitalism rewards people who save people and you owning pieces of those businesses will provide uh you know incremental profits.
the institute that can be reinvested in learning more and doing more. That's the idea both on a personal level and for the good of the world. I I wish you every success in that. Before we wrap, let's dive into a quick fire lightning round just to give people a bit of a fun way to close. Sure. Think back 40 years.
What was your first big win that made you come away thinking, I'm pretty good at this investing thing? So, one of the first stocks I bought was a company called Alexander's Department Stores, and it filed for Chapter 11, I think in late 1990. The company owned amazing retail real estate, uh, that I believed was worth, you know, $50, $60 a share.
The stock went from it was a department store company. It was in the process of sort of transforming so it was real estate to other uses. But on the bankruptcy the stock went from 21 to 8 and 38 per share. And I bought 2,000 shares a,000 at 8 and 38 and 1,000 8 and 58. Um I the fact that I remember the price paid this is when stocks traded in eights.
Uh yeah, tells you how long ago they were. What was the settlement time? It's been like 5 days. It was I don't remember exactly. I think 3 days, but Okay. Uh and that those 2,000 shares were about 3540% of my net worth. I was even a more concentrated investor back then. Oh wow. And within a few weeks, the stock went to 21 and I sold.
Yeah. Okay. And then over time, the stocks went to like six or 700. Um, and so it was a good it was a good lesson in uh in some respects. You know, had the initial investments I made gone down, I probably would be not being interviewed by you, I would be doing something else. Or you'd have averaged down and traded your way out of it and you'd have held on even longer and uh uh
I don't know. I think if my initial investments didn't work, I might have been discouraged and tried something else. Well, that covers off my next two, which is highest conviction trade and what what did you sell too early? Maybe one final one then. What sort of received wisdom or let's call it consensus is everyone getting wrong?
I don't know that there's something that everyone is getting is getting wrong. Um, look, let's I'll give this more an optim. Let's hope that AI is a very very material net positive for the world and that the risk of a catastrophic outcome is very very small. I'm an optimist generally. So that's the way I lean.
But I I think that's where we're going to end up and I I I hope that the recent concerns are going to cause us to be thoughtful uh about monitoring and being cautious about uh what the risks are. Bill, this has been fantastic. Uh before I let you go, can you just share with everyone where we can hear more from you and learn more about Square Holdings on X, online, wherever?
Sure, you can follow me on X. Uh I I tweet about a large array of topics, some investment uh directly investment related, some geopolitical related. Um Persian Square uh has a website. There's a lot of information about us available, but I would start with our website. Thank you so much, Bill. All that's left for me to do is again thank you on behalf of everybody watching and listening for joining us here on the What an Investor podcast. Great. Thanks so much.
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