The Contrarian Playbook That Built a 36 Billion Dollar Empire | Bill Ackman

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 over the last two decades.

Most investors today are very short-term focused because they can compensate 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 is 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.

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.

Mark 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 it's just a pleasure to meet you. Thanks for joining us on the podcast. Yeah, delighted to be here. Thank you.

Listen, your investment philosophy has always been something that people have stood out for, your ability to stand out from the crowd.

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 remember reading a story about you where they said you bet your father, I think it was your bar mitzvah money, for a couple thousand dollars of money that you would get a perfect 800 score in the SAT.

So it sounds like you've had some confidence early in life. Tell us a little bit, if you would, about that story, but also what really started you out in the financial business almost 34 years ago?

So what pulled you to it? Was it numbers? Was it people you knew?

We're curious to know how you kind of started out to move in the direction of the path where you are today. Sure.

So first on the story, I was a pretty cocky kid.

And then the year before I did the SAT, they released a couple of SATs. So I had taken them.

So I had a pretty good idea how I was going to do. And I bet my dad, but I would consistently do perfect on the verbal.

And like I somehow miss a few questions on the math. So I bet my dad that I get 800 on the verbal because I thought it was kind of a lock.

And I had $2,000, which was my kind of life savings, more from odd jobs than from bar mitzvah money, I would say.

And the Friday before the Saturday of the test, my dad canceled the bet. Oh, wow.

Was that a mercy decision? I think he was worried he was going to lose and $2,000 was real money.

And at the time, my dad was a successful guy, but he was an entrepreneur in the mortgage brokerage business.

And he had a couple of years we didn't make any money. And the 87, which is when I took that test, was like a bad year.

No, it wasn't 87. It would have been 83. It was not a good year in the real estate business.

And I think he went to lose $2,000. And anyway, I ended up getting one question wrong.

So I was actually very happy that he that's that story in terms of investing.

So I actually after after college, I went to work for my dad and his kind of real estate, you know, little boutique.

And I 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, providing the service, if you will.

the kind of investment banker type. And at one point I said to my dad, I said, look, I'd really like to learn how to be an investor.

And, you know, who's a good investor in your friend group?

And he recommended the guy by the name of Leonard Marks, who was, he said, was a fantastic stock market investor.

And I went to see this guy and he recommended I read a book, you know, kind of a famous book, Ben Graham's Intelligent Investor.