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Let's talk about Billman, one of the greatest investors in the world who has achieved extraordinary results in recent years. Bilacm, let's say, was born as a value investor following the style of Warren Buffett. In fact, if you look at his portfolio, you will essentially always find, roughly, a dozen stocks, so it is a very concentrated portfolio, even though he manages a significant amount of capital.
We're talking about $14.5 billion. Um, it must also be said that he has another peculiarity that makes him similar to Warren Buffett, that is, he is an activist investor, meaning that he not only buys certain companies, which we will see later on with what characteristics he chooses them, but once he has bought these companies he practically often sits on the board of directors of these companies and tries to improve the things that are not going well and therefore a little bit, let's say, to restructure these companies and this makes him very similar to an entrepreneur rather than an investor.
However, in his career he also had some rather particular periods, unlike, precisely, Warren Buffett's style. Um, because Warren Buffett, for example, has always refused short selling, instead this experience belongs to, eh, Billakan, even if, let's say, lately he promised himself not to do it anymore, understanding well the risks that such a practice entails and in any case he has been the protagonist of reckless operations, so much so that, eh, if you look at his results, eh, they are not constant results, but there are ups and downs, even if, let's say, the overall balance is clearly positive.
He distinguished himself by spectacular losses and equally spectacular wins. Among the spectacular losses, we recall, for example, those concerning a pharmaceutical company on which he lost 4 billion, or 30% of his capital at the time, and also on Herbalife he made a bet that went badly. Among the most spectacular wins, for example, is the one related to the market decline in 2020 due to the pandemic.
he sensed what was going to happen and so he went short on the market and had a big, well, win. But beyond these episodes, what is interesting to understand about Billakman is precisely his investment style and how he chooses these companies. For example, if we go inside his portfolio, we see these dozen companies and in first place we see Uber, which by the way, he chose it, let's say, recently.
Why does he choose companies like Uber, which he even owns with a 20% stake? Because Uber, Akckman basically tells us, is a company that generates a continuous cash flow thanks to the commissions paid to it by taxi drivers, without having large expenses. That is, Uber makes its computer network available to operate the taxi system, but then it is the drivers who pay for their car expenses, eh, and on top of that, of course, they pay a commission which, if I'm not mistaken, is 17% to Uber.
So you understand how a machine that generates continuous flows of home and these are the companies that people like. Another similar company is eh Hton, the eh Hton hotel chain. Why? Because the same thing in this case too, it's basically almost like a franchise, that is, many of Hilton's hotels are not owned by Hilton, they are hotels that ask to enter the Hilton system and Hilton provides them with all the know-how, provides them with all the graphics, the signage, the part - everything related to the world and in exchange receives commissions from these hotels.
So even in this case here, practically continuous cash flows and few expenses, eh therefore clearly favourable balance sheets. Oh another very solid company is Google. Google also makes a lot of money thanks to its many activities. Just think about Google Ads, where the advertiser pays Google to advertise .
So they are continuous revenue streams with lower expenses than revenue and that is precisely what Pillacman says makes companies very profitable to own. So he keeps them in his portfolio for a long time . Another company that has made significant profits is the food chain Cipotle. Eh on Cipotle he made very significant profits.
The fact is that if you analyze the results obtained in recent years by Bill Laakman you see how he greatly outperforms the reference benchmark which is the SP500. So a great investor, an activist investor who, eh, left behind the recklessness of his initial speculative operations that had also brought him, eh, to a crossroads because he himself declares that there was practically a period in his life when he was on the verge of bankruptcy, that is, he was in dire straits precisely because he had made position-sizing errors by entering with 30% of the portfolio.
on this pharmaceutical company that then went badly, but then clearly he found the right balance, he found his method, his methodology that led him to obtain great results that I have shown you. Thank you, let me know what you think, leave a like, and I'll see you for future content.
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