저자: BillAckman · 외국인
요약 보기
애크먼은 장기 투자와 영구자본의 중요성, 하락 리스크 우선 점검, 사업 구조(해자·낮은 레버리지·경영진) 중시를 강조한다. Pershing Square USA(PSUS)와 운용사 PS의 동시 상장 구조를 설명하며, PSUS가 포트폴리오 대비 약 21% 할인된 79센트에 거래된다고 주장한다. 리테일 물량 과다로 할인이 생겼다고 보며 포트폴리오 공개 지연을 언급한다. 과거 2020년 폭락 때의 'Hell is coming' 발언을 회상한다. 현재 시장의 FOMO(메모리 반도체 쏠림)를 경계하라고 조언한다.
다듬은 글
Hey, everyone. Welcome to the Holy Grail of Investing podcast. I'm Tony Robbins along here with my partner and co-host, Christopher Zook. Think about a business that you can't envision a world in which that business is not bigger and more profitable 10, 20, 30 years from now. Buy that company and own it.
Today, we have a legendary guest in a conversation I know you're going to love. Bill Ackman is the founder and CEO of Pershing Square Capital Management, one of the most influential and closely followed investors probably of the last two decades. Most investors today are very short-term focused because they get compensated that way or they have risk management that way.
This FOMO thing about I want to be in memory chips because that's where all the money's being made. Long-term capital is ideal, but permanent capital is a whole lot better. What that does is it creates the opportunity for an investor that can have a long-term view. Most people think about just diversification.
You've been willing to be that active participant. The typical investor will say, "I don't like management, so I'm going to find something else." We see a situation like that. We say, "Look, we can buy from people selling because they believe the situation will never change." And then we can effectuate change.
So, you took a closed-end fund public and then you took your management company public at the same time. And you actually gave people who bought into the closed-end fund a piece of the management company. This was about democratization. This is the only publicly traded hedge fund. You made a very famous comment on CNBC.
I know you remember. Hell is coming. The market was down 6% when I went on and it was down 10 by the time I got off. Meanwhile, I went on TV to say we're buying stock, not selling. If you were going to give one or two pieces of advice to someone who's really trying to build wealth, what would they be?
Bill's known for his willingness to take on the contrarian view, maintain his conviction when consensus disagrees, and really make concentrated investments based on an extraordinary depth of research and understanding. And his investment returns, as you'll learn, have been extraordinary. Today, we're going to discuss how Bill thinks about risk and downside, the importance of long-term investing, active ownership, and the evolution of public and private markets, and what investors can learn from someone who's really willing to think a bit independently.
So, Bill, first of all, you're a legend in the business, and uh it's just a pleasure to meet you. Thanks for joining us on the podcast. Yeah, glad to be here. Thank you. Listen, um you know, your investment philosophy has always been something that people have stood out for, your ability to stand out from the crowd.
Uh but before we get into that and the way you evaluate risk and so forth, we like to start out with a little background. Everybody knows someone's background, kind of their origin story, so to speak. And I I remember reading a story about you where they said that you bet your father, I think with your bar mitzvah money, for a couple thousand dollars of the money, that you would get a perfect 800 score on the SAT.
So, it sounds like you've had some confidence early in life. Uh tell us a little bit, if you would, about about that story, but also what really started you out in the financial business almost 34 years ago. What what pulled you to it? Was it numbers? Was it people you knew? We're We're curious to know how you kind of started out to move in the direction of the path that where you are today.
Uh sure. So, the First, on the story, I was a pretty cocky kid. And then uh I I had pre You know, they was the year before I did the SAT, they released a couple of SATs, so I'd taken them, so I had a pretty good idea how I was going to do. Okay. And uh I bet my dad But I would consistently do perfect on the verbal, and like I'd somehow miss a few questions on the math.
So, I bet my dad that I get 800 on the verbal, cuz that I thought was kind of a lock. And I had $2,000, which was, you know, my kind of life savings. More from uh from odd jobs than from bar mitzvah money, I would say. But um And uh the Friday before the Saturday of the test, my dad canceled the bet.
Oh, wow. Yeah, and I Was that a mercy Was that a mercy decision or or or or or I think he was worried he was going to lose, and $2,000 was real money. And he he And it was a time, you know, he My dad's been a you know, was a successful guy, but he you know, then he was an entrepreneur and in the mortgage brokerage business and he had a couple of years we didn't make any money.
Uh in the '87 uh which is when I took that test was like a bad year. Um no, it wasn't '87. It would would have been uh '83. It was not a good It was not a good year in the real estate business. And uh he um I think he would have lost $2,000. And anyway, I ended up getting one question wrong. So, I was actually very happy that he
That's That's my story. Uh in terms of investing, so I actually after business after college, I went to work for my dad uh in his kind of real estate, you know, uh little boutique and uh I um you know, was selling office buildings, arranging financing, things like this. And it seemed to me that the people having more fun were the people making the investments as opposed to the people, you know, the providing the service, if you will, the kind of investment banker type.
Uh and at one point I said to my dad, I said, "Look, I really like to learn how to be an investor. Uh you know, who's a good investor in your friend group?" And he recommended a guy by the name of Leonard Marks, who was uh he said was a fantastic stock market investor. And I went to see this guy. And he recommended I read the book, you know, kind of a famous book, uh Ben Graham's Intelligent
Yeah. [snorts] uh Investor. And I read it and uh I was like, "Wow, this is pretty cool." And that the next thing I read was like a Berkshire Hathaway, you know, Warren Buffett annual letter and you know, the Buffett's stuff is obviously very compelling and it kind of draws you in. And I started getting obsessed with it and I went, you know, I I would uh McGraw-Hill had a bookstore on uh like 50-something in 6th Avenue.
It's the best business bookstore in New York. It's obviously pre-Amazon. And I'd go over there and during lunch, you know, from 12:00 to 1:00, I would just read books. Wow. Yeah. Um and uh you know, anything I could find on investing. Uh and that's how I got captured by it. And then I when I I went to Harvard Business School for the purpose of that learning how to be an investor.
And I learned a pretty valuable lesson. I literally get there and you know you get copy of the course catalog and I go back to the dorm room and I'm kind of reading through it. I'm starting to look for all the classes on investing and there wasn't one. The The closest class they had at Harvard about investing was a class on like how to be CEO of like Fidelity Investments.
You know, like sort of a how to be like a asset manage in the asset management management, you know. How how how to build the next Fidelity Investments, not how to pick stocks or whatever. So I I had to develop my own little self-study uh program. So that's how I how I got into it. And the first stock I bought went up, you know.
Had it gone down, I mean I might have probably would have done something else, you know. And did did you start right after after that leaving your father? Did you go straight into it after that? Did I I thought I read someplace you had invested with a firm or Harvard business classmate. So uh at business school, my next step was, you know, going back to the dorm room and reading 10Ks and 10Qs by yourself is a pretty antisocial thing to do.
And there was a very smart guy in my class by the name of David Berkowitz and uh he lived in was a I guess what they called Soldier Field Park. It was sort of these apartments on campus and he was like one floor away. So I'm like, "Hey, you know, what what if we have this There was no investment club at Harvard, believe it or not.
Uh so we start They had one Bloomberg machine. It was in the library. And you know, the guys who would hang out by the Bloomberg machine, uh you know, like Tim Barakett, Chris Hohn who's become a very famous investor, a guy named Bob Jaffe. Like all these guys ended up going into the hedge fund business, you know, the the guys that hung around the Bloomberg uh machine.
Which was the old a very old version of the of what is today's Bloomberg machine. Yeah, that's that's how I learned. And I had a little two-person investment club. I started a hedge fund uh September of '92, which is 3 months after I graduated from business school. And uh the you know, raising money without any experience or track record is a pretty interesting thing.
So, and and my dad had no interest. So. It looks like it sounds like your dad had a different idea about risk than you've taken in your life, for sure. Oh, yeah. Yeah, he was never felt comfortable with risk. Um but after other people had uh after you raised money from real people, four of the original six investors were in the Forbes 400 magazine, like wealthiest people in the country.
And my dad sort of last minute said, "Okay, well, maybe I'll put some money." So. That's awesome. I want to take a quick second to cover a few housekeeping items. First, if you've not already, head over to holybroinvesting.com and sign up for our free newsletter. We share timely news, insights, and updates on private companies leading the way in areas like artificial intelligence, space and defense, energy, professional sports, and more.
And if you enjoyed this episode, please like and subscribe to the channel. It helps us continue to bring incredible guests and conversations to you like we did today. Finally, many of the guests on this show are connected to Kaz Investments in some way. We may have a direct or indirect ownership in their businesses or otherwise benefit from their growth and their opportunity.
We're always transparent about these relationships because we've said at Kaz for 25 years, we're freakish about alignment, and alignment is a critical part of everything that we do. Now, back to the show. Well, look, you know, one of the things that we focus on with all of our investors at Kaz, it's fundamental, I know you know it, you live it, is this whole idea that you know, if you're going to look at an opportunity, the first thing you got to look at is the worst case scenario.
And as you know, if you can live with that, you can do well, the upside takes care of itself. And I want to acknowledge really Christopher because over the last 25-year history, you know, we make about 2,000 evaluations a year, and uh usually invest in about 10 to give you an idea. About 20 or 30 now now that we've got a registered fund, but still, in the 25-year history, that philosophy, rigorously, disciplinedly applied with him, has caused us to have a 96% of our private investments are profitable either realized or unrealized.
It's pretty amazing. And I know that's been your fundamental philosophy. Tell us, if you would, how do you evaluate worst-case scenario? Like how do you come up with how you look about that before you make an investment? And how how important is that discipline to being an effective long-term investor?
Yeah, man, as a general matter, to your point, uh if you can, you know, investing's about not losing money for the most part. Now, we do there's a portion of what we do, a very small portion of what we do, where we take the risk of a permanent, almost entire, loss as long as the, you know, the potential uh upside is much, much larger.
Almost venture capital-like. Uh and we do this when we we purchase these hedges. But the core of our business, you know, uh we look for these very robust, durable growth companies. Uh you know, businesses that, you know, as Warren Buffett would say, have a moat around them. You know, where Yeah. You can look the
moats are getting, uh you know, filled in with with lots of dirt these days, right? Because the um you know, AI is this incredibly disruptive uh technology. And it I would say it's the hardest thing to do as an investor is, you know, understand the risk of disruption to a business. So, I think it's become harder.
But, you know, the kind of company we typically like completely dominates its, you know, place in the universe. Mhm. The business model is generally relatively asset-light. It's a We love royalty streams, like royalty-collecting companies. We're okay if a business uh has to invest capital, but we want the business to earn a very high return on that capital.
And we want it, you know, we we have to be confident that two Stanford, you know, recent uh people who left after freshman year uh aren't going to be able to put together something in a garage and and disrupt us. Or, of course, an even more well-capitalized competitor. But if you think about the atmosphere we're in now, I actually, yesterday, I'm I'm an investor in a venture capital fund, and uh the uh this guy does seed-stage uh investments.
And what he told me is he goes to the Harvard campus now in the third week of freshman year to start getting to know who all the students are and because he says the best people are going to leave 6 months after into into freshman year. We got to get these guys early. Okay. Um so you know, you can today you know, a 19-year-old can raise effectively an unlimited amount of capital, get access to an unlimited amount of bandwidth recruit, you know, super talented people.
So it's a world where I would say they the downside risk is greater because of disruption. But the way way you mitigate it is you know, finding a business with a business model is such where it's very difficult to disrupt. Um where the company's balance sheet is uses very low leverage. That's another way you can have a greatest business in the world.
You apply too much financial leverage to it and you can get obviously knocked out. And then of course, it matters who's running it. Um you know, in our case, you know, the nature of the way we invest. We don't like who's running it. We can play a role in in replacing that person. But you can have great business, good balance sheet, really bad person and and they can take away a lot of the value.
But yes, protecting your downside and a good way to do that of course is price, which we haven't discussed. So you can get all those things right and overpay and you can also lose a lot of money. But your 96% record on private investments is about the best I've heard. So congrats. Well, thank you very much Bill and and we are very proud of it.
Obviously, it's a team effort and it's something that we've stayed with for 25 years just being consistent and focusing on what's that worst case cuz the upside will take care of itself. And you know, it's funny because of the fact that you know, for years and years and years when I would talk to people about you know, our investing in GP stakes and private asset management businesses, I would always have to say it like this, you know, owning a private asset management firm is the very very second best business model in the world because nothing really beats enterprise software.
Well, I don't have to say that anymore because now enterprise software is obviously under the gun. But when we talk about private asset management, we can lead directly to your company, which is Pershing Square. Um you recently did a very unique offering where you took a closed end fund public in the United States, you know, ticker symbol is PSUS for those that are watching.
And then you also at the same time took your management company, which is Pershing Square, ticker symbol PS, public at the same time. And you actually gave people who bought into the closed end fund a piece at the IPO, a piece of the management company. So it's a very unique offering. Um what was your inspiration for doing that?
Obviously the stock's been trading now for a couple of months, both of them have. What have you learned as a result of that? And kind of what have you, you know, anticipate of what the market's going to think about those assets collectively over time? Uh that's a great question and and uh you know, I think to your point, I think you know, a asset management is an amazing industry.
Um but there's, you know, there's a whole spectrum of uh businesses in asset management. What's interesting about ours is our capital base is comprised of these public vehicles with a with a capital is basically forever. And what that allows us to do is to be a long-term investor. You know, you can you're in some sense only as good as the investors you raise capital from.
You know, if you're a long-term investor and your money your investors can pull your money in in 3 months, um you know, you're going to you're not going to succeed. And so we set up our uh kind of business model in a way where the, you know, the liabilities match the assets, which is kind of a key kind of success factor.
So where was the inspiration? Well, you're an investor uh in private GPs, you know, the general partners of various funds. You understand the economics of that business. It's really attractive. But my guess is your investors are principally, you know, very sophisticated high net worth or institutional type investors.
And that's not something that opportunity hasn't really been afforded to the public market, the kind of retail type uh investor. But you often see in that private asset management context, you might have an anchor investor, for example, in a new fund being launched. And the anchor gets a piece of the GP as kind of a a gift for kind of leading that round.
And we took that sort of inspiration and we and we put it to work in the public markets. And so basically, for investing in this new fund, for signing up for Pershing Square USA, you got a gift of the of the GP, and the bigger the offering, the more valuable uh the gift is because asset management, you know, obviously, the more AUM you have, the more fees you generate.
And so, it was aligning the interests of the public market investors. So, I think, you know, we did the largest closed-end uh investment raise in in uh in history, you know, with a $5 billion IPO. It was actually one of the largest. I think it's in the top 20 IPOs ever, believe it or not. So, we you know, we accomplished our objective of a large IPO.
We've raised this uh pool of capital. Uh the management company's trading at about a $14 billion kind of market cap, which is um you know, as a percentage of our fee-paying assets, it's the highest valuation of any alternative asset management firm in the world. So, we like that. Uh my only uh complaint is that PSUS has traded to a wide discount very, very quickly.
And so, the opportunity for your viewers here is you can buy our portfolio today at basically 79 cents on the dollar. It's trading at a 20 as of this second, it's trading at about 21% discount to the value of a liquid portfolio of some of the best businesses in the world. I think part of that is we have not yet provided detailed disclosure on what the portfolio is.
It's also a pretty volatile time, you know, kind of the market. You know, one of my takeaways from the IPO, why did the discount emerge so quickly, is I you know, I thought I was doing retail a favor, um but you know, we in the offering, we had uh well more than the uh demand we need to sell the whole offering.
So, how do we allocate it? What you typically do is you give the institutions, you know, kind of a better allocation, and you cut back the retail. That's the typical approach. But this whole vehicle was about democratization. Uh you know, access to you know, this is the only really publicly traded hedge fund on the uh and it's the only opportunity to get a free piece of the GP.
We thought that should go to retail. So, we gave retail a full allocation. We cut back the institutions. Apparently, as I did not appreciate, retail's not expecting a full allocation. So, you had a whole bunch of people put in for let's say a you know, whatever, 10,000 shares. They only wanted 1,000 and then they got 10,000 in their account.
They're like, "Holy I got to pay for this by Monday." And and and the stock opened uh you know, they it took them because they had to open both at the same time. Took them to 2:00. So, on Friday at 2:00, someone gets allocated with 10,000 shares of something where they only really wanted 1,000. And you know, one-day settlement on Monday, they had to pay for the stock.
So, they sold it immediately, both PS and PSUS, over the last 2 hours of the day. And they were retail was about 850 million of the uh We had anchors who were about 2.8 billion. I invested like 250 million and the rest of the team. So, there were you know, the of the public float, you know, they were almost half the public float.
And so, I think we're still suffering from the that retail overhang, which I think will go away. So, the opportunity again, my free gift with purchase here is uh you can buy the what you know, you can buy a dollar of assets for $0.79 and it's a liquid, high-quality, you know, businesses what Richard we're going to talk about in a month.
So. Well, no, and it's it's a very interesting dynamic because the fact that a lot of times assets move for reasons that have nothing to do with economics. They have everything to do with emotion or fear or in this case, you know, an over-allocation like, "Oh, I actually didn't think I was going to get filled." And then they don't have a choice, but that created a huge opportunity uh in particularly the PS stock, the the management company.
As that traded down, you bought a bunch of stock. We also were we're aggressive buying stock at that point in time, and then of course the stock just completely ripped higher and went up something like 60-70% over the course of of of the next couple of weeks. You know, the the old saying in the asset management business is, you know, long-term capital is ideal, but permanent capital is a whole lot better.
And so I commend you for building a fantastic business that is really really unique. You know, when you think about the the opportunity set for a vehicle like this, a closed-end fund the democratization of basically having this this publicly traded hedge fund now in the United States, you know, what is it that you think really differentiates what you're doing in PSUS compared to a lot of the other things that they can invest in?
Why would somebody say this is better than just buying Nvidia, which obviously everybody wants to do it almost every given day except for the last couple of days, but what specifically would you tell them is the value proposition of this offering? You know, if you look at our record over the last 22 years, we've compounded at 19% per annum, and the S&P's compounded at 10% per annum, and you understand the power of compounding.
You know, that's many you know, many more multiples. It's something like you made whatever seven or eight times your money in the S&P, and you've made 26 times investing in Pershing Square. So, you know, the power of compounding obviously the the excess return that we've been able to generate over time.
Where that's come from is one concentration. You know, we concentrate the portfolio in, you know, 12 to 15 names. Two, it comes from being a very influential investor. We started out very much as a shareholder activist. We'd buy into a company that was mismanaged. We you know, have to go public with our thesis, put pressure on the company, sometimes we join boards.
And that led to, you know, a lot of value creation cuz we could buy into a story like, you know, Chipotle. You know, think back a bit like what's going on in the with salads in this new uh uh whatever bacteria that people are you know, we're responding to unfortunately from a GI perspective. Um but Chipotle had a food safety crisis and the stock got crushed and management didn't handle it well.
So, we bought 10% of the company. Uh they welcomed us on the board of directors. We recruited a new CEO. They fixed it and we made, you know, like seven or eight X times our investment. We can invest in situations that don't exist to the average investor on the street. Like Chipotle was trading at the right price under the what was then existing management team and governance structure and they were heading in a bad place.
We could buy from people selling knowing that we'd be able to make the changes necessary to make the business more valuable. And so, that's been a big driver of value for us over time. What happened 20 years in or maybe 15 years in or maybe actually it's been a decade since we've had to make an activist investment.
Now, every CEO in America knows who I am. They know the firm. So, today we buy into a business that, you know, has some potential that's being unrealized and we get invited into the boardroom, you know, to either give advice or just deal with the CEO directly or or or otherwise and we can kind of create value.
So, where there's an ability to create value beyond just a passive purchase of an existing company. Second thing we do that's kind of less well known, but been a big driver of our returns is we try to hedge what we call black swan risk. Uh so, beginning in, you know, circa 2007, I became concerned which you actually maybe a couple years earlier about these AAA rated companies that were taking on subprime credit risk.
And so, we built a large hedge uh that in '08 and '09 became enormously valuable. Uh we spent, you know, 1 and 1/2% of our capital. capital it turned into, you know, 20% of our capital. We took that capital and we bought stocks when the market blew up in '08 and '09. And then in February 2020, I started getting concerned from a health perspective about COVID in January of 2020 and then by February, I said, you know, this is going to have very severe economic effects.
We're going to have to shut the global economy. I built a very large hedge in that CDS market. Uh and we used that uh when, you know, literally 2 weeks later, world blows up. We have a hedge and 20 27 million to billion dollars. We take that capital and and we buy stocks in March of 2020. And then the next one was really the Fed raising rates aggressively as you know inflation spiked.
You know we we we saw you know you know President Trump spent 7 trillion dollars basically bailing us out for COVID. We had Biden ultimate uh committing to spend trillions more. Uh we had interest rates you know at zeros. We had the most aggressive fiscal policy ever. We had the most aggressive uh you know uh uh Federal Reserve policy with you know kind of 0% interest rates.
And then you have the animal spirits of people have been locked up for for almost two years and starting to spend money again. So they look this will lead to massive inflation and you could buy an instrument a so-called interest rate swap option betting that rates would rise. And we made a couple billion dollars there almost 3 billion.
We took the money and bought stocks. So the opportunity for an investor to buy P you know those that strategy is not one that's available to a typical mutual fund investor or a public markets investor. It's available really to high net worth people in invest in hedge funds. What's unique about PSUS is it's literally the first publicly traded hedge fund has the same hedging strategy the same active investment strategy.
It owns a portfolio that is the same as you know we we managed private funds that charge you know 20% promote. This is a public entity and we can't charge a promote so it's a a very low cost version of a Pershing Square. It's interesting that you know the structures you've created again for permanent capital give you that capacity because I remember if I remember anything 2002 2003 you had your thesis but people weren't paying attention to it.
Look like it wasn't working well but what 6 7 8 all of a sudden you make two and a half billion dollars and that's the kind of why you get these extraordinary returns. I'm curious you know obviously most people think about just diversification. You're much more concentrated obviously and you've been willing to be that active participant to engage with the management company the management you know know, the capital allocation influence the strategy, you know, push for a real maximization.
What kind of key business conditions have to exist for you before you're willing to become that active investor in the type of investments you make? The answer is all about business quality. You know, if it's a business that we like, we can predict with a high degree of confidence, uh and it doesn't have exposure to what we call extrinsic factors we can't control.
So, we don't like to invest in businesses that have a high degree of commodity exposure. Why? Because we can't control the price of oil. We can't uh we don't like businesses that are very sensitive to interest rates because again, you know, uh macro factors can can change that. We like we like businesses that are inherently low volatility and they're insulated from the kind of the big macro factors and they've got, you know, long-term secular kind of growth trends.
So, if the and, you know, the business has a good balance sheet, got a you know, very strong financial position and it's mismanaged, that's a huge huge opportunity. You know, because the typical investor will say, "I don't like management. They missed their numbers. They're not doing the right thing.
Expenses are out of control. So, I'm going to find something else to invest in." We see a situation like that, we say, "Look, we can buy from people selling cuz they believe the situation will never change." And then we can we can effectively change and that's a huge kind of arbitrage. And then and and then I know you're very focused on the alignment of management.
You know, when you evaluate a business, how important is the management incentives? What do you look for? What do you look for in terms of leadership having a a genuine alignment with long-term investors? What kind of criteria do you look at from that area? Am I correct that's been one of your evaluation points?
I mean, it's I would like to say incentives drive all human behavior. And if you want to understand why management is doing something, just look at the proxy and see how they're how they're being compensated. You know, I think unfortunately, there's sort of this um you know, the kind of I would describe, you know, the compensation consultants that boards hire all have kind of the same sort of, you know, there's a base salary, there's a bonus salary, there's is incentive plan and it gets complicated.
Really, what you need to do is sit down with the CEO and understand, you know, there's certain kinds of CEOs um you know, don't respond well to all these complicated incentives. Generally, in our view, we want them focused on the share price, and that a few of the key metrics that matter for the business's long-term performance, and that's how you want to incentivize, you know, the kind of key people.
And you want to incentivize people based on things they can control, right? So, the CEO should be based on the overall company, but, you know, punishing people further down in the organization for things outside their control and not giving them compensation based on things where they can have an input, you're not going to have a not going to get a good outcome.
Look, yeah. No, there's there's The older you get, the more of you realize how important incentives are in every aspect of your life. Everyone you're dealing [clears throat] with. No question, and you you made the comment earlier um about Buffett and his influence, and obviously Charlie Munger, and what they did at Berkshire Hathaway, you know, the something you said just a minute ago talking about Chipotle, you know, Buffett's famous quote of loves it when a business that's a fantastic business has a one-time but fixable problem, whether it be Coke or American Express or obviously Chipotle or or several others.
You know, you've obviously been influenced by that in a significant way. Um one of the things you've done recently with Howard Hughes is kind of talked about it as being a Berkshire Hathaway for the, you know, next generation, if you will. What what walk us through your thought process there, and what your plans are, you know, with that company that you now um you know, have a a very significant influence over.
Uh sure. So, uh you know, if you look at what you know, Buffett in his travels, if you will, came across this textile company that was trading at a discount to basically its working capital. So, in the early days of of Buffett, he would buy just really cheap stocks. And he didn't care much about business quality.
And obviously, Berkshire certainly qualified, cuz it was a textile business at a time where people were, you know that business was moving to lower cost you know to China basically and that caused the stock to be really cheap. And he bought half the company. He found himself in control of a dying company.
And what he did basically is over time he liquidated the textile company and he took the capital and invested in much higher quality businesses and he started really with insurance. Insurance you know property casualty insurance and reinsurance have been the kind of the core driver of Berkshire's value over time.
And and when people think about Berkshire Hathaway they think about the you know they think about Coca-Cola they think about See's Candy they think about the various businesses he's purchased. But many of those certainly common stock investments Apple etc. were really just part of an insurance company portfolio.
And what's unique about Berkshire is there are some very talented insurance operators but they tend not to be great investors and there's some great investors but they tend not to go into the insurance business. Buffett really had both qualities and that's really what's been the driver of Berkshire you know I would estimate 70 80% of the value came from the insurance operations.
of Berkshire. So how we choose is a company we got into by accident. We bought a stake in a company called General Growth. This was in during 08 stock had declined 99 and a half percent you know from a 20 billion dollar market cap to 100 million dollar market cap. They had 27 billion dollars of a debt and they owned class the best shopping malls in the country.
So great underlying assets but the debt got them into trouble. The CMBS market shut. They couldn't refinance their debt. They were going to go bankrupt stock goes to zero. We bought 25% of the stock. You know all our friends in distressed credit were buying the debt which was trading at 30 cents on the dollar.
We thought the stock was a more interesting if you will fulcrum security and we bought for 60 million 25% of the company. So at 250 million market cap 27 billion dollars of a debt right? So that's the kind of leverage certainly can get you in trouble but it creates an asymmetry where you can make a fortune and 60 million was about 1 and a half percent of our capital at the time.
So in the worst case scenario we lose 1 and 1/2% the best case we can make a fortune. We ultimately made a fortune. Um 60 million became almost 3 billion over, you know, about 5 6 years. Um but part of that strategy was General Growth was in the Class A mall business but had a lot of other stuff that investors did like.
They owned huge land holdings. They had a business they called a master plan community business, which is a very very long duration business of yeah, basically developing lots, selling them to home builders and then eventually building, you know, vertically and uh you know, businesses that the stock market doesn't like.
Well, we took all of those businesses, all the development assets that were not Class A malls. We stuck them in a new subsidiary and we spun off to shareholders. And we called it The Howard Hughes Company because uh this company General Growth had purchased a company called Rouse, which had purchased the Howard Hughes's Howard Hughes's real estate interests in Las Vegas.
I thought Howard Hughes kind of a cool name. And then uh but the fortune was made on the mall company. This was just a way to make the mall company more attractive. And so for 14 years we kind of refined this portfolio. But no one ever cared on Wall Street because it was a business, you know, it had development, it owned a lot of land, it didn't pay a dividend, it was a real estate company that was not a REIT.
It was complicated to analyze. And it was a bit like Buffett, we found ourselves with this company, we owned 47% of it. Uh and uh the market didn't care. Uh and I said, "Look, you know, the market assigns too high of a cost of capital to this business than we can earn in this business. So, let's go the Berkshire Hathaway route." And what we've done is in June, a month ago, uh we closed the purchase of a company called Vantage Holdings, which is a property casualty uh specialty insurer and reinsurance company.
And actually, literally yesterday, we made a big announcement, which I'm sure you missed cuz no one's paying attention to this company. But we recruited uh Mark Grandison, who was the CEO of Arch Capital Group, which over the last 25 years is probably the best-performing insurance company in the country.
He was the CEO for the last 8 years, 23% IRR during his tenure as uh CEO. Uh and he's now the executive chair of Vantage. And then his number two, a guy named David Gansberg, uh we recruited uh to become CEO of Vantage. Uh and uh we inherit from Vantage a very good platform that's been built over the last 5 years by a very good team.
Um and we're putting into Vantage, I would say, the best senior leadership team in the insurance industry. And so now we have the team to build out a very profitable insurance company. And Pershing Square is going to manage the assets of Vantage for free. So we're going to bring the what Buffett brought to Berkshire from an asset management perspective.
And then the Ajit Jain, who is you know, he's famous uh guy who's been running his insurance business, well, our equivalent is Mark Ganderson, and Mark Ganderson actually trained under Ajit at Berkshire before going to Arch Capital. And so, you know, the plan is to build a compounding machine over time.
You can buy the stock today for 72. Uh we bought in a private transaction with the company an extra 15% of the company about a year ago. We paid $100 a share uh when the stock was 66 as part of this overall arrangement. Why do we pay 100? Cuz the company has something in order of $110, $120 of underlying real estate assets.
So today you buy the stock for 72, you get 110-ish of real estate assets uh plus now an interest in Vantage where we just put in place kind of a superstar uh team. Um you know, senior leadership team. So I think it's going to turn into an interesting story. But right now, you know, it doesn't have semiconductors, memory chips, it's not an AI company.
It's definitely in the unsexy part of the world right now, real estate and insurance, but I do think um you're going to be happy you own this a decade from now. You can make a lot of money from things that are not sexy and not AI. That's that's that's still the case. Yes. Yeah. I want to touch base on your your public persona a little bit.
You know, you've kind of stepped beyond just the traditional boundaries of investing and because of the success of your business and your following obviously on X and and other social media pieces, you've kind of changed people's perceptions. And I'm wondering, do you think social media has changed what people expect of business leaders today?
And do leaders feel pressure or responsibility to participate in kind of the public conversations about what's happening in the world? I have personally appreciated your speaking up about the anti-semitism that was being tolerated by these universities, which is insane to me. But I'm just curious how you think about that along with your business.
Is that an advantage, a disadvantage, is it a responsibility? How how do you look at it today? And and how do you think other people do who are now leaders in business? Yeah, so I would say the vast majority of leaders in the business stay far away from from controversial topics like you know, DEI, Iran war, universities, anti-semitism.
Places where I feel very comfortable going. But what I would say is I feel like you're a successful person. You know, we're in a country where free speech is one of the most important free speech is something obviously I spent time talking about as well. But I think you know, with success comes responsibility and you know, there were a lot of things that were just people were just not would discuss privately, but not talk about publicly.
And I think you've got to bring those things publicly. I would say most business leaders today shy away from that and I think it's unfortunate. You know, there are there are handful of people who you know, speak out about you know, issues politically from the a business perspective. I understand why they do it.
Right? You're always at risk. You know, I think the nature of our business, you know, if we sold a product, you know, look at Elon, right? People were boycotting Teslas for you know, some period of time. You know, it's you could argue it's hurt his Tesla sales. He's very kind of outwardly facing perspective.
Um so, there is some risk there. Um but I I think if anything it's been helpful to our business. And the nature of our you know, if someone doesn't like what I have to say, I guess they can sell the stock. Um but it doesn't affect our ability to be a successful investor. So, it doesn't really So, I don't think you need to worry if you're an investor with us that some public statement I make is going to lead to a boycott that's going to somehow going to harm us.
And I think the vast majority of our investors are aligned with us on on the kind of the views that I've shared publicly. Well, there's no question that having perpetual capital provides an interesting platform to be able to do that without having to worry about a run on the bank or something that other types of businesses might be concerned about.
And it's it's really refreshing where somebody who's, you know, in the public eye can be very candid about what they believe and put out some extremely well-reasoned um material, which goes back to your strength in the SAT and and and verbal, you know, your writing is very good. It's very supportive.
It's not just emotion. It's actually very very based on logic and facts. And it's it's I think really made an impact well beyond the investment world in a lot of the things you've gotten involved in. But thinking about that platform, obviously you are one of the most followed folks from the financial markets when it comes to acts, etc.
How's the market changed? The speed of information is so fast. Do you think it's changed investor psychology? Do you think it's changed the way that they go about making decisions? Talk about what you think the impact is of this big growth in social media and information flow. Yeah, I think it's led to more and more It well, it's led to two things.
More and more short-termism, right? There's there's so much more data that people can respond to. You know, some of the more successful strategies in the hedge fund world today are people who are, you know, taking in tons of quantitative data and making very short-term bets on, you know, is the company going to make earnings, miss earnings, that kind of thing.
Um, and uh, you know, you think of the Millenniums and Citadels of the world, a lot of their capital is concentrated sort of in these pods where people are given, you know, very levered incentives, uh, as I say, incentives drive all human behavior, and very tight risk tolerances. And and that has led to, you know, the two big forces in markets that I think have changed fundamentally.
You know, I compare you know, 10, even 20, you know, you more so obviously 20 years ago. Um, one is indexation, right? More and more people kind of thrown in the towel, I'm just going to index. It's been worked out very well. Um, the query does it work out forever as index funds are now, you know, a quarter of every American business plus or minus is owned by some combination of Vanguard, State Street, and Northern Trust.
Um, so that's that's that's really taking float out of the market, right? When you shrink the float of a public company, the marginal buyer and seller is going to have more impact on the stock price. Marginal buyer and seller today is a Citadel or Millennium, because they're very big market participants.
They operate with a large amount of leverage. They have very, very large gross uh, books of capital, and they're increasingly short-term. The other big player, of course, is retail, a huge player. And retail, you know, with these is kind of one-day uh, options has become it's become even more sort of speculative.
So, I think the the those forces lead to huge volatility, you know, uh, IBM you know, disappoints people and the stock drops 25%. That's a big move for a relatively large company. That was a very, very rare event. I I can only think of one example where a big company stock dropped by something like that, you know, when I first entered the business.
And you know, Philip Morris when they lost kind of their first big litigation on tobacco, that stock dropped like 20%. But that was a real extraordinary event. I would say every quarter there's some relatively large company where the stock price moves enormously. And I think what that does is it creates the opportunity for an investor that can have a long-term view because every once in a while really high quality business disappoints or whatever.
Uh, and yes, that affects the quarter, but it doesn't have a long, you know, as long as you believe it's it's not going to change the long-term trajectory of the business. That creates an interesting opportunity to buy a a stake in what is the the very becoming increasingly The markets are more liquid, um, but there's more discontinuity, right?
Where a stock can drop 25% overnight and there's no liquidity between $100 and $75 a share. Um, and that's why, you know, having a stable, long-term capital base is is important. And you can buy without regard to where the stock's going to be, you know, at 12:31. Uh, and you know, most investors today are very short-term focused because they get compensated that way or they have risk management that way, or they get paid, quote unquote, at the end of the year.
So, they won't invest in a company unless they're confident the stock price will be higher on December 31st, which interestingly creates opportunities. Um, you were envision a business where you know it's going to be worth twice as much the following December 31st, but you can't own it this year cuz it's going to be down for a bunch of reasons, right?
That creates a pretty interesting opportunity for an investor who doesn't have to play by those same rules. That's cool. You know, you you made a very famous comment right as COVID was kind of evolving on CNBC. I know you remember him the hell is coming comment. And it took a more complex message you really offered and became like the headline everywhere.
I'm curious looking back on it now, did What did that teach you about the experience of market psychology today and communicating during uncertainty and how quickly a narrative can form? And I know you might mention share with it the audience of you and about the how you use that insight with the right vehicle to do very well by your investors.
Well, here's actually what actually happened. And it I've had to put out like a the transcript and the recording and everything else. As I'm saying, it just got twisted into something really simple. It was a 28-minute segment, and I was explaining to Scott Wapner, uh you know, a month earlier, uh the conversation I was having with CEOs.
And I was telling him, I said, "Look, here's what's going to happen. We're going to have a shutdown of the global economy." Right? And this is not something you've experienced. And we got called Chris Nassetta at Hilton, you know, Hilton's going to have a complete shutdown. So, draw your credit lines, put cash in the bank, think about deferring CapEx, because hell is coming.
Uh and um the uh my segment was 28 minutes, but they took like a 12-second thing on my describing my conversation with Chris Nassetta, and they replayed it like for like weeks, like on the whatever. And uh I was accused of effectively market manipulation. Meanwhile, I went on TV to say, "We're buying stocks.
We're buying Hilton at 50 $55 a share. We're buying Lowe's, the home improvement company, at $70 a share. We're buying every stock in our portfolio." Why? Because I believe we're going to shut down the global economy. But we we're just going to do this temporarily. My advice to the president was we go on a 30-day, you know, instead of a 2-week spring break, let's we go on a 30-day spring break.
We let the virus, you know, keep everyone in their homes, and then reopen the country, wear masks, and you know, if if the president follows that policy, um we're going to have this is an incredible time to buy stocks. That was my message. I was literally buying, not selling. Uh but, you know, on the hell is coming thing, the market market was down 6% when I went on to CNBC, and it was down 10 by the time I got off.
So. I was credited with causing the market to go down that much, but it was mostly CNBC, you know, taking, you know, the most dramatic part of my conversation and and replaying it. What did you What did you pull from that for future discussions if anything or is it really out of your control cuz anybody can lift some piece of your conversation and use it, you know, to produce, you know, fear?
Well, actually what Warren Buffett has a kind of a rule CNBC, if you notice, they're not allowed to excerpt him. So, Buffett he only goes live. Uh he never does recorded so he so he can't be uh spliced and and diced. Um and they have to play the whole segment. Absolutely. So, he's That's very interesting.
the smartest, you know, public relations person, you know, CEO um guy in the country. Now, he's very careful with his image obviously and uh and yes, you can I'm sure all of us have learned uh the lesson of what I mean, 60 Minutes is the classic example of this. Right? They record the segment and they very carefully kind of edit it and they got themselves in some trouble, you know, with the election and Kamala, the president, and you know, litigation.
I think for good reason. Yeah. Now, it's it's fascinating the way that has changed over time. I want to go back to something that I know the audience would really, really benefit from, which is, you know, we've talked a lot about success. We've talked a lot about, you know, things going well and being right, but obviously anybody who's making investments is not always going to be right.
So, you know, we typically learn as much if not more from what we do wrong than what we do right. So, what is something in the past that really was a framing situation for Bill Ackman on what it was that he learned from a mistake that he grew from and he got better because of it? Uh sure. So, one of the things we do at Pershing Square is we kind of I like to say we treasure uh mistakes.
Uh I think they're they're more valuable than successes. Um but uh I don't know if you ever saw Roger Federer's darkness speech where he talks about how he he only won 54% of his points, right? He's like one of the greatest players of all time. And he got only 54% and he said, "Look, I look at the losers, you just have to kind of brush it off and move forward." Um a little bit different in the investment world.
Uh you shouldn't just brush it off. You actually have to study it and figure out what you did wrong so you don't you know, it's okay. We're going to make mistakes in our industry in our business. You just don't want to make them twice, right? The only thing that would upset me is to do make the same mistake all over again.
So, a big part of it is is that. Um you know, the the history of our firm, you know, the nature of our strategy, very concentrated, a lot of due diligence, our batting average is actually quite high. Um but we're concentrated. You know, I would say our batting average historically is something like 90% for public market investing, which is kind of crazy in terms of investments that have been profitable.
But the ones that we get wrong are going to be massive because everything we do is massive. So, the dollar the dollar amounts lost will get are going to get headlines. Yeah. Uh and so it every almost every profile ever written about me talks about the four big mistakes we made, okay? And 22 years later, they're still talking about Herbalife and J.C.
Penney and and Valeant Pharmaceuticals and I don't know, Borders Group or whatever the you know, whatever they were. Or I more recently Netflix, something that we sold um you know, you know, with a loss. Um but I would say the key learnings for me on a big scale, uh not just some stock market mistake, um but things that were you know, threatening to the business uh and something I I you know, I mentioned you before we got on camera here that I have a daughter uh who is you know, coming back from a a major uh health incident.
Uh and I'm giving her the same advice that I gave myself as I worked my way through some challenging business times is that the key uh to all of these really difficult moments is just to make a little success every day. Make a little progress every day. Yeah. Uh and don't don't look back to where you were.
If my daughter thinks about, you know, she had a hemorrhage and she's and then you know, near death, now she's learning to speak, learning to see, learning to walk again. If she keeps thinking about where she was and how far she's fallen, she'll she'll be depressed, she'll never get there. But if she compares where she is now versus where she was 5 months ago, you know, she is well on her way to recovering to a, you know, a full recovery, which will probably take, you know, a couple of years.
Um and and business is the same. You know, every successful person I know, and I'm sure I can dig into your histories, you had at least one, and I'm sure more near near-death moments from a business perspective. Yes. Uh where, you know, every successful person I know had at least one of those moments, and it's how they dealt with that challenging period that enabled their ultimate success, and that builds the confidence to know, you know what?
I'm going to have something else come hit me in the head. I don't know exactly what it's going to be, um but you can kind of work through it. And the beauty of the uh investment business is you don't need to be, you know, neurosurgery, you know, you get it wrong, you know, the you can't go back, right?
The beauty of our business is um you know, we had we exited uh we had, I would say, a reasonably successful investment in a company called Universal Music. Um we sold, you know, and say 2/3 of our investment at a very good price. We we kept the tail. And uh you know, disappointed with management execution, but ultimately, you know, we just exited at a much tinier profit, disappointing profit on the last little piece, um because we knew we could redeploy the capital into something more interesting.
And uh beauty of our business is you don't need to make it back the same way you lost it. Uh and very often the right thing to do is take the loss, you know, there's some tax benefits usually associated with that, uh and redeploy the capital with a team you have more confidence in and higher quality business.
And the stock market's going to offer you, you know, a lot more opportunities for that. But from a business perspective, from a life perspective, the biggest lesson I've always had is you find yourself in a deep dark place, don't look back at the mountain where you were. Just look at the next step. Get to the next step and the next step and the next step and progress compounds like money.
You don't see much in the beginning, but everyone here knows the curves of compounding. You know, it doesn't take long before they start to accelerate and you're you're back in a better place again. And a lot of it is just the dealing with that psychology, the emotion of all that stuff. And investing is something where you know, I'm very dispassionate and unemotional about investing even though I'm a passionate and emotional person the rest of my life.
Well, first of all, prayers for your daughter and and hope she continues to get better. Sounds like she's made giant leaps forward and I think the perspective you're describing is so critical. You know, without a compelling future, we can all deal with a difficult today if we have a compelling tomorrow.
But but many people in our society don't create a compelling tomorrow. And that kind of leads me to just looking at human behavior and and how we look at markets today because you know, there's so much technology, there's so much real-time information, there's quantitative data, there's algorithms, there's artificial intelligence, right?
So, markets today that they can move faster, the scale of them might be different, but human emotion still seems to be the core of it. I'm curious from your perspective, how does human behavior remain maybe the biggest driver of markets and are we beginning to see that show up in people's changing views of artificial intelligence?
Yes, emotion is one of the biggest drivers of markets, 100%. And that's combined with margin leverage. If you look combination of emotion and leverage, you know, leads to huge movements. But if you think about it, we're fundamentally animals, right? The fight or flight instinct, right? Is still inherent in our, you know, genome, right?
And when you know, when a whole bunch of animals were running this way, you probably should be running that way also because there's probably a bear coming, right? In the stock market, okay, people operate the same way. When a whole bunch of people are running this way, okay, maybe I should be running this way.
But now, what's interesting about investing is very often if everyone's running that way, maybe the best path is this way, but it's so counter to uh you know, I would say fundamental, you know, human psychology. And and you have to you know, Buffett was always very, you know, you know, if you read some of the biographies about him, you know, he's sort of criticized for being kind of unemotional in his personal life.
Um And you know, I think you don't want to be unemotional in your personal life, but in investing you have to be you don't want to be a lemming. Okay? You uh the best opportunities generally reside where everyone else is not looking, you know. How have you divided that just as an aside cuz your personality, which we all appreciate, at least that the two of us certainly do, is you you have a strong emotion and passion.
It's part of what makes you attractive and gets you to get the energy and yet you still have managed to stay rational in your investing. Is there something you do within yourself to make that switch? Or is it just a muscle you've built developed over time? I think it's a muscle you develop over time.
The muscle gets stronger because it gets rewarded with Right. successful outcome. You know, it's like you go to the gym, you build muscle. Okay, you see a positive outcome, you go keep going to the gym. It's sort of the same Yeah. Yeah. Mark, Chris, go ahead. Well, and building a a great investment firm is more than just obviously making great investments.
You got to build a great team. And I know you have a fantastic team at Pershing Square. You know, how have you gone about balancing, you know, real strong accountability with, you know, embracing, you know, as you said, you know, treasures, which are mistakes that people make. How have you blended those two together to make sure that you have a culture that really is all about success, but at the same time is willing to be, you know, self aware enough to think for themselves and also to be able to go out and take risk?
It's an important question and I think the answer, as you say, is culture, but it begins with the people you recruit. I interview everyone who joins Pershing Square, whether you're the woman who cleans the space, the the ladies at the front desk, uh obviously all the investment team members, but we are very unusual firm.
So, one, we have almost zero turnover. Like uh, our industry there is huge you know, people being poached from one firm to another firm. The investment team has really not changed in the last almost 9 years. Same team. Uh, and the same thing you know, the accounting team hasn't changed. The legal team we've had to add some additions, but you know, the core the core people have kind of remained at the firm.
And a part of that is one most I don't care how talented you are, but I won't hire someone unless I believe they're fundamentally a good human being. Um, bring an into an organization and it can destroy an organization. So, we you know, this is industry that has some very talented people and some of them are Okay, we don't hire them.
Um, the uh, we also grow talent as opposed to hire talent laterally. Uh, so the investment team has been built by people we hired basically 4 to 5 years after they graduated from college, after they spent 3 or 4 years in uh, private equity, maybe a year or two before that in investment banking. So, they we get them kind of pretty young.
Um, and incentives. Um, the vast majority of our firms in our industry are eat what you kill. You get paid on what, you know, incentives based on ideas you put in the book and how they do. Uh, in our case no, we have one portfolio. Uh, no one is compensated with an individual P&L. We all succeed based on the overall success or not of the portfolio.
Um, so that there isn't the the typical dynamic in a hedge fund is you have a bunch of analysts trying to come up with ideas they pitch to a portfolio manager so they can get capital allocated to their idea and they get capital allocated to their idea, they get a piece of the profit on that idea. Um, the problem with that dynamic is if you know, you're sort of have a call option, right?
You're trying to create call options by getting capital invested in your idea. If the call doesn't work, you go get a job someplace else. At Pershing, you're you know, it you you're we had typically an investigating idea will be you know, two team members will do independent deep due diligence plus Ryan who's our CIO plus plus me.
And then there'll be four five members of the team that won't have done any work on the idea. Uh but we'll have you know, judgment based on other experiences. So you have two people who are you know, one of the other problems with investing if a couple people do a ton of work, there's always like an incentive to want to do something, to want to put the capital to work.
We we we separate the people that you know, this is the whole team kind of ultimately makes the decision. We have people haven't done any work, people have gone really deep, people have done enough work to be dangerous. And everyone's incentivized to optimize the portfolio. If we're fully invested means we have to sell something we own to make room for something new.
And very common for someone who's led an investment say, "Look, I like this better than this. We should sell the idea I've done the work on to buy this." You would never see that at a at a firm where it's about getting your capital invested in your names. So I think the incentives we've designed the culture, we treat people really well.
One of the things I've always said, you know, one other way to judge a firm, you look at our reception desk. We have two women Mercedes and Megan who work at the reception desk. They've been at the firm for eight years. The average life of a employee at a reception desk of a hedge fund is 90 days. You know, our firm is not successful unless from the moment you walk in to the firm, you have a good experience.
Um and by the way, they do more than just answer the phone and greet people at the door. But my point is, they really care about the firm. And when we took Pershing Square public, you know, they got each of them got millions of dollars of equity that they earned over time. You know, the woman that cleans the space, she got a few million dollars of equity in in Pershing Square cuz she's been working at Pershing Square for you know, a decade and you know, we we want everyone, you know, space doesn't look beautiful.
You know, our glass, I don't know if you know, Chris last time you were out of space, we don't have fingerprints on the glass. Okay? The place is beautiful, it's in great shape. All of that stuff matters and I think of it like a watch, right? You know, if any part breaks, doesn't work. And so, you know, there are different levels of compensation, obviously, depending on, you know, who you are in the organization, but everyone's treated fairly, given the right incentives, and and we and the result is a family-like culture where we care about each other.
And um most people think we manage today about It's probably 36 billion of capital that assets that we manage. We have How many people do you think we have? Go ahead. Well, after you said that, it makes me reevaluate. I know. Well, if you If you had say 35, 40. I mean, we have 48 people and in that includes two people at reception, a woman who cleans the space.
would never think that except the way you framed the question. Yeah, and and by the way, most I I was at I met a guy from Sequoia, he ran one of their former head of Sequoia China and we were talking and and and he was, you know, how big's your firm, Bill? I said, well, how big do you think it is? And he I would I would guess you have, you know, 700 employees or something.
Yeah. And he's shocked cuz most companies, by the way, we also do the accounting for multiple public companies, right? We have We have I don't know, let's see, four entities that we that we have to file, you know, regulatory filings in in multiple jurisdictions. Most uh firms might have 40 people doing that, right?
We're able to do that. So, you know, they It's a you you get force multipliers um and and of course, economically, that, you know, the value of the firm is shared among a much smaller group of people. So, economically, it's it's probably the most attractive place to work in our industry. I I love how simple that is and I love how congruent it is with the way you look at businesses.
You know, the incentives that you are looking for in the businesses and also creating the family environment. Listen, I know we have to go. One last simple question, it's a big question, but you spend three decades, right, studying businesses, asset allocations, navigating successes in some challenging times.
You've seen up markets ups and downs. If you were going to give one or two pieces of advice to someone who's really trying to build wealth that you were thought were sacrosanct that they really need to never forget and always remember to guide them, what what would they be? It would be don't get uh attracted to where there's always an a super exciting place in the market where someone seems to be making a lot of money and you're and there's this this FOMO thing about, you know, I want to be there.
I want to be in chip memory chips cuz that's where all the money's being made. Instead, think about a business that you can envision a world in a world in which that business is not doing not bigger and more profitable 10, 20, 30 years from now. Buy that company and own it. And and and that's the highest probability way of uh you know, my my father-in-law uh never thought of himself much as an investor, but he would do exactly that and he would buy a Boeing, a Philip Morris, whatever the stocks he bought, you know, 30, 40 years ago and and he would never sell them.
And when he passed away, he had an incredible collection of companies. He wasn't a particularly economically successful guy, but he's had a remarkable uh long-term track record cuz he just took a very long-term view. And he got the benefit of deferring paying taxes and he bought these sort of iconic, you know, dominant uh large-cap companies.
It's it's a pretty good way one. Well, you've been uh so gracious and generous with your time and I just uh wonderful to finally meet you in person. You have such an incredible sincerity about you and it's very obvious why you succeeded both from the disciplines you practice, but who you are as a human being.
We send prayers for your daughter and uh best of continued success for you and thank you for joining us. We really appreciate it. Very kind of you and I had some fun good thing actually more interesting conversation than I've had in a long time on one of these podcasts. That's great. Well, Bill, thank you so much.
We appreciate it. Thank you guys. Take care. Ladies and gentlemen, thank you for being with us and we invite you to, you know, listen to more conversation with some of the world's best investors. The way to do that is to go to holy grail of investing.com. That's holy grail of investing.com. And then you can listen to all of our prior episodes.
You can also get lots of resources there, including information about the book that Tony and I wrote together. So, we look forward to seeing you next time on the holy grail of investing. All our very best.
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