Transcript of Bill Ackman on His Investing Playbook, His Bullish and Bearish Bets, and What Could Trigger the Next 2008

The key to being a successful long-term investor is being able to survive those kind of challenging market periods when everyone else is panicking. In fact, you want to have money to invest when others are panicking.

Bill Ackman doesn't just manage a portfolio. As the founder of Pershing Square, he has built one of the most closely watched hedge funds on Wall Street. When this guy tweets, he literally moves markets.

Today, he tells me the biggest tip for investors: Invest in something that you believe will withstand the test of time. The value of a business is the present value of the cash it generates over its life.

The macroeconomic risks he's worried about.

I think the biggest risk to markets is that there are a lot of very levered players in the market and we're at risk to some kind of extrinsic shock and that could cause stocks to go down a lot.

And which company will win the AI race?

Some people are afraid of AI. They think it's going to be very destructive to jobs and so on. I think it will be actually a big driver of economic growth, a big driver of job growth. But you have to learn how to use the tools.

I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand. It's time for some Money Rehab! Welcome to Money Rehab.

Thanks for having me.

So the economy feeling funky? But to be fair, it always feels a little bit funky. I don't think there's ever been a time it hasn't. What's your overall take on what's going on in the economy and markets right now?

So I think it's an unusual time in history. I think the big story is really AI. AI is driving an enormous amount of entrepreneurship. It's giving access to, you know, intelligence to a very broad group of people, you know, at very low cost, you know, Google is basically free and all, and then you have this massive infrastructure build in connection with AI. So you have, you know, some of the largest companies in the world competing to build the model of, for superintelligence. And they need access to compute and data. And we're seeing a land rush as people are literally acquiring land, building data centers, filling them with GPUs, memory, and enabling this technology that's transforming the world. And I think it's going to have an enormous impact on all of us. You know, some people are afraid of AI. They think it's going to be, you know, very destructive to jobs and so on. I think it will be actually a big driver of big driver of job growth, but you have to, you have to learn how to use the tools. But I think the big story is really AI. Yes, we have a war going on in Iran that I think will resolve itself.

I don't think it's going to go on for years. I think it will resolve itself one way or another in a way that won't be too impactful on the US. And then I think you're seeing, you know, companies are actually doing quite well for the most part, but it is a bit of a bifurcated economy where some of the kind of lower income people are challenged with inflation. And, you know, that's a, that's a major concern. So it's not all, all roses, I would say.

It's definitely not. It never is. So with OpenAI, Anthropic, SpaceX all going public, who do you think the winner is going to be?

You know, Anthropic seems to be the leader in terms of frontier models and building a business that apparently turned profitable recently. That's pretty impressive. What concerns me about OpenAI is kind of a prediction of very significant losses for the foreseeable future. And also, I think the open-source models are getting so good and the people will have access to either lower-cost or free models that will enable them to answer most of the important questions or solve the problems that they need. So I'm less of a believer in betting on the frontier model company. SpaceX is a very interesting business. The Starlink franchise is enormously profitable and a near monopoly on, on kind of global satellite telephony. You know, their space franchise is incredible and, and they have an amazing, you know, position in terms of data infrastructure. If you want to rent 100,000 GPUs, about the only place you can do that today is, is SpaceX. And they're earning very high returns on those assets. And then they have their own AI models. They launched a new one recently. So it's an incredible collection of assets run by, you know, the most talented technologist entrepreneur of our generation.

And I think the only question is just price at a trillion, wherever it is, 6 or 7, there's less upside than if you could buy for half that price. But, you know, I wouldn't, the word is never to bet against Elon. So I, you know, I think that SpaceX will be an incredibly important company over the next whatever period of time. Now it's not in the Pershing Square portfolio because it doesn't have the degree of predictability that we're looking for. We like businesses that sort of today— when you think about a business, people think about stocks and bonds. Bonds, you get paid a coupon, an interest rate, a couple of times a year. And if it's a fixed-rate bond, you're going to get your 6% or 7% for sure. And at the end of the life of the bond, you're going to get your principal as long as it's a creditworthy company. A business is a bit like a bond as well. Except the coupon, the interest payment, is not known. You have to estimate what it's going to be. And the interest payment, a way to think about it, the way we think about companies is we think about the earnings as the sort of the yield on the business.

So people talk about PE, right? A stock's trading at a PE of 20. Well, if you flip over the PE, it's a 5% earnings yield. One way to think about it is you're investing in a company that's generating a 5% return on your investment today. And the question is, is that 5% yield going to grow over time? Or is someone going to come up with a business that disrupts it and the company's going to disappear? And so stocks are riskier than bonds because there isn't the same degree of certainty about their future. But if you narrow down the universe of companies you invest in to these really predictable businesses where their market position is, we believe, so dominant, you can earn well in excess of bond-like returns without taking a ton of risk.

So is the market too expensive right now?

You know, I would say in spots. I think it's hard to generalize about the market. You know, people look at the stock market and they say, okay, today the PE today might be 21 or something like this. And the average PE in the market might be 17. So they can say, look, on the margin, it looks overvalued. But, you know, the value of a market is a function of what the earnings are going to be in the future. And earnings are, have continued to significantly exceed expectations. And earnings are growing at a faster rate than historically. And, you know, a big percentage of the market is represented by, you know, kind of the biggest companies. And those companies, whether it's the Nvidias, the Microsofts, the Googles, the Alphabets of the world, are much higher quality businesses growing much more quickly than, you know, if you look back 20 years ago, what the top 6 or 7 companies were back then. So I think it's a higher quality collection of companies that deserves to trade at a higher multiple. And to my point, you know, the, you know, if Microsoft and Amazon and Meta are, you know, cheap stocks, which we believe they are, you know, you could argue the market's not expensive at all.

So if somebody had $1,000 to invest right now, where should they put it?

I would find a handful of businesses that don't use a lot of leverage. So we want companies that don't use a lot of financial leverage. They're businesses that you like and admire. That, to make good decisions over time, and a business where you believe if the stock market were to shut for 10 years, you'd still be happy to own it 10 years from now. Don't invest in kind of what seems to be most exciting now. Invest in something that you believe will withstand the test of time, because the value of a business is the present value of the cash it generates over its life, and you have to be able to predict it's going to be around a long time.

I'd love to see how that's reflected in Pershing's portfolio right now. You guys keep it to 12 to 15 investments. Why do you keep it so tight and what are you excited about right now?

Sure. So our approach is to find what we believe to be the best businesses in the world, businesses that will survive the test of time, businesses that will survive the disruption of AI, will be beneficiaries at a minimum, you know, will be either neutral or beneficiaries of, of AI. And so our portfolio, you know, is comprised in some cases of companies we've always wanted to own. Weren't cheap until more recently. I put Amazon on that list, Meta on that list, Uber on that list, Microsoft, you know, businesses that we've always admired were always too expensive. And a lot of money in the markets is flowing toward kind of the new, new thing, you know, stocks, you know, semiconductor stocks or memory or, you know, places where people have recently made money. And we, we focus on the where we're going to earn a high compound return over the next 3, 4, 5 years. And that's enabled us to fill a portfolio with these very high quality, what we call durable compounders.

What's up with Brookfield though?

Brookfield really fits the model as well. We, we like companies that have, that are sort of not particularly capital intensive, that earn kind of royalty-like returns. Or if they have a degree of capital intensity, they can earn very high returns on the money they invest. Profield's in the business of asset management and they're very good at it, really private equity, real estate, infrastructure, a lot of the energy, power-related businesses. And so as more and more capital is going in to build data centers, et cetera, that's a field where Profield is going to be a very successful participant. And they manage other people's money and earn a royalty and a fee on that capital. And that's a very good business.

I mean, there's years that you've delivered some crazy 50, returns, which is incredible. Uh, hedge funds are out of reach for a lot of people. Of course, you created PSUS to democratize hedge fund access. Do you think more hedge funds should do that, or is it too, by nature, risky and volatile for retail investors?

It depends what you do. I think what we do is actually relatively low risk. We buy very high quality companies. We own them for the long term. We get pretty deeply involved in those companies and help them be successful. So we'll occasionally join boards, but we'll always I would say, have management's ear to the extent we have ideas that can help a business, you know, be successful. The vehicle we manage, PSUS, is a, you could think of it as a hedge fund, but it's one of the only publicly traded hedge funds. It happens to be available at this very moment at a very attractive price. So, you know, if you like Microsoft, let's see, Microsoft right now is trading at, let's pull it up, the ticker. You know, Microsoft today is trading at $387. Well, if you want to buy it at, you $310, well, you just buy PSUS because PSUS is trading at a 22% discount to the value of its assets. So it's a publicly traded fund that trades in the stock market. And it, you know, it trades based on supply and demand for the shares in the short term. The assets we own are worth almost $50 a share and the stock's about a 22% discount to that price.

So you guys got it at a better price, but you got a ton of it, right? You recently bought $2 billion. Of Microsoft and then sold some Alphabet to free that up. Are you still bullish on Alphabet or are you just more bullish on Microsoft?

Two things matter to us: business quality, long-term growth, durability, kind of the overall quality of the business, and then the price. And we try to buy at a price that offers us a very attractive return over time. And occasionally a business we own gets to a price where the go-forward return is less than our kind of threshold. And we sold Google, not because we didn't think it was an amazing business, But rather because the price got to a level where we felt the go-forward return was lower than what could be achieved by redeploying the capital into Microsoft.

What company now do you think is like Apple in the '80s?

Apple has not been the most innovative company in the last decade. It's still an amazing business, but I don't even remember which iPhone I have. And I don't think it's materially better than the iPhone I had a few versions ago.

You don't have the newest iPhone?

Bill? I, I believe I do, but is it iPhone 17? I don't even know which one it is, is my point. But the one I had before, actually a few iPhones ago, was better because the battery life was, was better than the one I have, I have now. You know, some people are making the argument that this notion of walking around a phone, you know, 5 or 10 years from now, you're not going to walk around the phone anymore. You're just going to be connected, and you don't have to carry this device that you can lose or people can steal. You'll just have some, I don't know, a little pin on your shirt that will pick up, you know, all of your, answer all your questions.

Or maybe even in your brain.

Yeah, actually, it's an area that I've been spending some time on recently. There are a number of companies working on kind of brain, human, you know, computer interfaces. And it's, it's going to be amazing for people with brain injuries and people who've lost vision. And eventually I think it will be, I think you're right. I think you'll, maybe you'll wear a hat and the hat will be your connection to the internet.

Yeah, more like what is going to see the most exponential growth. You know, people were complaining that a lot of these companies are staying private for a long time, but now we're seeing them go public. So if a new investor is listening, what's the best advice you would give to new investors?

I think you get into trouble when you try to make money really quickly, you know. So options and leverage and very speculative type businesses, you know, when you start with a relatively small amount of capital, I remember when I had a few thousand dollars of investment capital, you know, you want to kind of make money quickly. I think one of the important things to understand is the power of compounding. You know, Berkshire Hathaway stock was like $48 a share, you know, in the 1960s. You know, you've made, you've become a millionaire investing with Warren just buying a share kind of back then, but it didn't happen overnight. So the key is buying businesses that you believe will compound at a high rate over a long period of time. And the consumer often has insights before Wall Street. I mean, Tesla, the company was appreciated. The big shareholders were retail investors because institutions didn't understand how great Tesla was as a company, as a car. So look for those experiences, products in your life run by companies or built by companies that you admire. And that's a good place to start. And then read the annual report, see what they say about their business, and then think about it.

Is this a business that you believe can withstand competition or is it, you know, my concern, you asked me before about some of the AI companies or Anthropic has the lead now, you know, at a certain point in time, OpenAI was the leading company and then Google was the leading frontier model company. And there are a lot of very talented people running private. I just saw a startup where they raised a couple hundred million dollars in their seed round at a $2 billion valuation. And that was just an idea. And their second round is going to be $5 billion. And they're far from having a product or a service or a dollar of revenue. But there's an enormous amount of capital out there looking for the next Anthropic. And so that's going to be a very competitive space. So I'd rather own— go back to the Uber example. Almost everyone's had experience with the service Uber. And I think it's an amazing service. And the stock is very cheap today because people believe that the Tesla taxi, if you will, is going to disrupt Uber. And I think the consumer is going to go to the Uber platform to order their car as opposed to the Tesla.

App because you want, you know, the, you want the lowest cost car that's gonna get you from place A to B in the shortest period of time. So, you know, look for a business that you, that where are you spending your time? And, you know, Amazon, I, I order from Amazon every time I learn about a new book. You know, going to the pharmacy in New York City has gotta be about the worst experience, right? All the stuff's hidden behind plastic and you have to call a salesperson to open a, thing to get a, a, a razor blade. Okay. Meanwhile, you go on Amazon and get it delivered in 2 hours, and who can compete with that? Right? So think about great dominant business where the probability of competition is extremely low.

But the frothiness that you mentioned with the startups and these crazy valuations, does that concern you? Do you think we're headed toward an AI crisis or are we in a bubble?

By the way, the, this particular company, which I looked at, the investors are probably the most sophisticated investors in AI companies with the most experience. And they're the ones setting the valuations at such, you know, super high kind of levels. You know, look, I think in private markets, there's more risk of a quote unquote valuations being massively above perhaps where they should be, but you're also seeing businesses that are able to go from, I mean, look at Anthropic. It went from zero to many tens of billions in revenue in a very short period of time. This is a never-before-seen phenomenon. So if companies can scale that quickly, then you can justify a much higher private market price.

Some of the money moves you made during 2008 made people wonder if you could possibly see the future, Bill. So if that is at all true, what are some of the opportunities you're predicting now?

Seeing the future is very often just studying the present and looking for examples in history. And in 2008, really before 2008, it was several years before 2008, we saw a number of companies doing stuff we thought was crazy, which is there were these businesses called bond insurers. And they had AAA ratings, which means as good as the government in terms of creditworthiness. And they were guaranteeing very risky mortgages and collecting money and reporting big profits. We said this is not sustainable. And that was not so much predicting the future, but identifying something now that just seemed wrong. And we knew eventually that would, if you will, that would blow up. In terms of predicting the future, markets are going to be volatile. There'll be some upcoming panic about markets. I don't know exactly what the catalyst is going to be. There is a ton of speculation. There's a huge amount of leverage being used by professional investors, by retail investors. My biggest piece of advice to your audience is don't borrow money against stocks because that's how you get wiped out. And betting on sports is not a great— unless you've got some real edge.

I think a lot of the younger generation is wasting a lot of money betting on sports. Maybe it's fun, but don't bet money that you need to live on.

So no prediction markets, it sounds like.

Unless you have a huge edge. I guess if you, if you know a ton about a certain space and that gives you an edge and the market's mispricing that edge, Fine.

But why wouldn't you suggest borrowing against your portfolio so you wouldn't have to sell your equities?

The problem is that stocks can trade at any price in the short term. And when you borrow against your equity portfolio, you can get a margin call. And what that means is, you know, if you're living off your brokerage account and you've got, you know, 50 cents leverage against a dollar portfolio, The stock market goes down 20% or your portfolio goes down 20%, 30%, you have to post more collateral. They can sell you out. And the key to being a successful long-term investor is being able to survive those kind of challenging market periods when everyone else is panicking. In fact, you want to have money to invest when others are panicking. We've made a big chunk of our profits over the last 20-odd years have come from times where the market was blowing up and we had we had hedged that risk and we had capital to deploy both in '08, '09, and during COVID Because this is a very sexy thing people talk about online.

They say rich people borrow against their assets instead of selling them.

Rich people become a lot less rich when they do that sometimes. Carl Icahn very famously was very highly levered against his own stock. And then the stock got crushed and he went from a $20 billion net worth to, you know, 3 or 4. So rich people can lose a lot of money using, using margin leverage. I mean, I guess if you can use margin leverage, if you use 5 cents against your dollar, maybe you're okay. But if you use 30, 40 cents, you start putting yourself in a risky position.

So it sounds like you're long-term bullish like Warren and just boring stuff.

Maybe it's boring to you, but I don't think maybe volatility is exciting to people. I like businesses where I know they're going to be here 10 years, 20 years, 30 years from now. That's how you make a fortune over the long term.

I'm bullish on boring all the way. So aside from not borrowing against your portfolio, what's the worst advice you've heard from new investors?

I don't like this trend of 1-day options. It's just gambling. I mean, no one knows whether a stock's going to go up or down over the course of a day. Unless you're trading on inside information. So it just seems like a crazy game.

So what do you think is the next crisis? Is there a next 2008?

I mean, I think there are always things to worry about, right? So one thing to worry about is, you know, we've been spending more money than we've been taking in as a government, as a country, right? So we've got a deficit and we've been financing that deficit by issuing Treasury bonds.. And so we've got whatever, $34 trillion or something like this of national debt. And we have to issue that debt at a time when lots of other companies that used to be buying in their stock are now issuing a lot of debt and need more capital because of this massive AI infrastructure kind of boom. So there's a huge demand for credit at a time when the government itself is also, you know, issuing more and more. Of its own bonds. And the risk there is that, you know, the, all that supply needs to be absorbed by investors and that can cause rates to go up. So one risk to markets is rates going up. Another risk is you have a lot of the very, as I talked about, levered players in the market, which means that if there's some kind of event that comes from left field that shocks people and they panic and they sell, you could see a cascading as people, other sellers have to sell because they borrow money.

So I think the biggest risk to markets is that there are a lot of very levered players in the market and we're at risk to some kind of extrinsic shock and that could cause stocks to go down a lot. Now, if you have an unlevered portfolio with very high-quality businesses and you don't need the money tomorrow, that's fine. It's a good opportunity for you to buy more. If you've got margin debt, you're gonna get wiped out, or you're gonna have to sell at the bottom, which is what you don't want to do. So the key, going back to my hero, you know, Mr. Buffett, his key was just longevity, right? He's 95, and he set up Berkshire Hathaway in a way that he would never get a margin call or the equivalent, so it could compound. Not every year, like you mentioned, we've had a couple of really amazing years. Probably a third of the time we've been up you know, north of 30, 40% for the year, but we've had a handful of, you know, down, down years. This year we're down, you know, slightly, but that's okay. You don't need to make money every year.

You just need to persist and own businesses that can compound at high rates. And you wake up 5 years, 10 years from now, and you'll, you'll have a lot of money. The other key for, for building wealth over time is spending less. And it's hard to do that, you know, foregoing the short-term experience or pleasure, planning for the long term, that requires some restraint.

Well, that's why I think a lot of people are talking about a looming retirement crisis. And I know that you advocate for people without employer-sponsored plans like 401s to be able to get access to retirement savings options. I mean, usually the debate is centered around the fact that we move from defined benefit, so pensions that have gone by the way of the dodo bird or the BlackBerry, I suppose, to defined contribution plans like a 401 or an IRA. So can you explain this like I'm 5 years old? What kind of plan actually fixes this problem?

Yeah, so I think, you know, the issue for the country, which the president is taking steps to fix, is, you know, call it 60% of the workforce their employer provides some kind of tax-advantaged way to save money, typically a 401 plan. And the ideal one is where you have to opt out, so you're, you're kind of forced in, or not pushed in, nudged in, to take 5% of your income, whatever the number, and invest it in a tax-exempt plan that can grow over time and invest in the stock market. The biggest opportunity a young investor has is time because the power of compounding, your money multiplies over long periods of time, but you have to start early. And it's hard to start investing when you're young because this is a time when you want to be buying things, clothes, a house, paying rent. But setting aside the discipline to invest money and have it grow tax-free in a Roth IRA or one of these accounts is the most powerful way to save for your retirement. Now, the problem is, I said 60% of the country workforce has these kind of programs. 40%, you know, you're an Uber driver, maybe a restaurant, you know, waitress, et cetera, and your company doesn't give you a 401 plan.

You don't have an easy way to start saving for your future. And the president just made law where these kind of Trump savings accounts very similar to what government employees have, where you can start with $1,000 in savings and then, you know, each year you contribute and invest the money in the market and will grow over time. You know, wages have not grown at the same— wages grow at a much slower rate than stocks over a long period of time. And so you want to— it's very important that every American owns kind of a piece of the stock market. If you want to be in a good position by the time you retire.

Okay. So with that said, can we play a game called bullish or bearish?

Okay.

Gold.

No opinion.

You don't own gold.

I don't. Well, I bought jewelry for my wife, so I guess the family owns some gold. I don't personally actually own any gold. I have a platinum engagement ring, but other than that, I have no metals to my name. I guess you could say this. My dad bought gold many, many years ago, probably in the 1970s and held it. You know, he said, I always want some percentage of my assets in gold. It was not a very good investment, but when it reached a little over $4,000, maybe in the last period, I convinced mom to sell that, that gold that dad had put aside. It wasn't a huge amount of money, but I guess you could say I was not that— I'd rather own businesses that can compound in value than gold. But okay, I like jewelry.

So you're bullish on buying your wife jewelry? Jewelry is a very, very good advice to all husbands out there. But not like GLD. You're not owning an ETF that tracks the price of gold?

I don't really have a view. I don't know whether gold is going up or down. I just, I don't think of it as a great investment asset, even though it's done actually quite well. It's just not my thing. The problem is it's, it's an asset that's only worth what people tell you they're prepared to pay for it. And it doesn't pay you any yield in the meantime. Whereas every other asset that I invest in is one that generates some form of yield. It generates earnings or pays a dividend or it's rent from a building. Whereas gold is just a speculative asset. So I don't find it as, I don't think it was an investment. I think it's a speculation.

Okay. Long-winded answer. I like it. So you don't pay attention to silver or copper or anything?

I sort of am aware of it, that, you know, copper, you know, even gold are inputs to various industrial processes that affect the cost of things. So I, you know, I'm aware, but it's not something I'm betting on. Now, if we were investing in a company where the cost of metal was an important input, I would be spending more time worrying about it.

Okay. What about what some people call digital gold, Bitcoin?

You know, I don't own any Bitcoin. None? No, it's very analogous, I would say, to gold. You know, I think Mr. Satoshi, I think he's a genius. You know, I'd like to believe that if I read the original paper and thought he was a genius and Bitcoin was 20 cents, I would've bought some, but I, I can't, can't claim to have done that. I would've, I, I, let's put it this way, out of admiration for the, the, the construct of Bitcoin, I think it's cool, but I don't know whether it's worth $50,000, $70,000. 5,000 or a trillion. I have no idea. The beauty of investing is you don't need to have opinion or even knowledge about every investment class. You just have to know what you know and know what you don't know. I don't know Bitcoin. I don't know gold, so I don't touch either.

So no crypto whatsoever.

I, I've invested in some venture capital funds that invest in companies where blockchain, crypto are part of their business model. So I'm intrigued technologically, but the speculating on various kinds of coins is not my thing.

How about Chipotle?

You know, one of our more successful investments, we bought Chipotle at a time when they had a major food safety crisis and we helped recruit Brian Niccol to the company, did an amazing job. You know, Brian went to Starbucks and, you know, running a, you know, the next generation of talent has had a more challenging time with the company. But I think they're long-term well positioned, but I don't have a, I'm not particularly bullish or bearish on the current share price.

Okay. So speaking of Brian, how about Starbucks?

I think you've got an incredibly talented CEO running the company, but I feel like Starbucks pushed the price of their product at a pretty high rate over a very long period of time. And I don't know, the consumer, I don't think there's much room to increase price. I think the experience kind of deteriorated over time. I think Brian's trying to bring it back.

Okay. How about T-bills?

You know, treasury bills are where you put your money when you need to keep your money safe. But I would, again, rather own really high-quality companies for long-term than T-bills.

Okay. I think I'm going to get you on this one. How about Trump?

I like the president and I think he's done a lot of things right. You know, he's It's a job where it's very easy to criticize a person kind of running the country. But, you know, I was, you know, I decided to support him relatively earlier on and I'm happy I did. And I think he's vastly better than what the alternative is. And I think he's done a lot of really good things. So I'm optimistic about the last couple of years of his term. And I think, you know, I like a president that doesn't have to worry about getting reelected. Because I think they can make the right decision without regard to politics. So I think I'm bullish on his last 2 and a half years.

So bullish, it sounds like. Ish.

Yeah.

All right. Mom Donny. Hmm.

Bearish. I'm not, I'm not a fan. Look, he's very smart, very charismatic, very good, very good at politics. But I think the decisions he's making are very bad for New York. I think he's scaring away, discouraging, you know, you saw the whole video, I'm sure, with Ken Griffin's apartment and You know, Ken Griffin is a massive driver of New York City economic value, about to make a massive investment in New York City with— and he has this, you know, major presence in Miami, and now he's increasing the presence in Miami and diminishing the presence in New York. That's a disaster. I mean, all the various things that Mondame wants to pay for require revenues from the likes of people like Ken Griffin. So if you scare away Ken Griffin, discourage the Ken Griffins of the world from, from being in New York City. It's a, it's a disaster for New York. And, you know, the, the mayor talked about balancing this year's budget, the highest budget ever, $125 billion budget for the city. And, and it wasn't balanced at all. You know, he managed to get $8 billion from the state. He deferred pension payments.

And I just think there's enormous waste and fraud. You know, I don't think the country or New York City has a revenue problem. You know, New York City is spending way more per resident than probably any other city in the world and getting less for it. We have an efficiency and a waste problem. And now to, to, on the positive side, Andami started something, a Doge-like savings effort. So hopefully that goes somewhere. But I, you know, he recently, I don't think he's done a lot to help bring the city together. You know, there's a, he recently came out with a map of, I don't know if you saw the map of all the, you know, various immigrant populations in New York, and he left off Little Italy, and he put in a bunch of, you know, groups that I would say haven't been here nearly as long as the Italian population. It's just not a great way to, to build community in New York City. So I've been— he's what I was concerned about when he was running for office.

Could he scare you out of New York?

I guess potentially, you know, I've got various reasons to be here. I have a daughter who's at a major medical event and I'm working on her recovery and her friends are all here. So I wouldn't pull her out of New York. That's my principle more than anything else. But it's not so hard to spend time. The winters in New York are not the best. So Miami starts to sound pretty appealing. And the more people that leave sophisticated towns like New York City, go to Miami, invest in the city, help build out the cultural infrastructure, et cetera, the more interesting. A place like Miami becomes. And, you know, DeSantis has done a pretty amazing job running that state.

You have not been shy about any of your thoughts about this on Twitter in particular. And when you tweet, people listen. What does it feel like to have your posts move markets?

You know what, I think it's pretty cool to push a button and send a message to 2.5 million people. And I think on the margin, you can move opinion. And I think that's It's both a responsibility and opportunity. I suffer from only being able to speak the truth. You may not like what I have to say, but, you know, I think I've been out there on a number of issues that, that everyone wanted to talk about but was afraid to, whether it was the DEI or what was going on at university campuses or some of the post-October 7th stuff or antisemitism or anti-Zionism or, you know, we can, we can make a list of various issues. It's great to be— one of the great things about our country is that you can say what you think. Now, a lot of people, you know, would like to say what they think, but their fear of losing a job, perhaps losing a friend discourages free speech. But I think the world's a better place if people share their views. And if you disagree with me, I read the comments. I read the best arguments against what I have to say.

And, you know, I learn.

Does the heat get to you? Do you change your mind based on those comments?

If someone convinces me I'm wrong, absolutely. And, you know, the environment at Pershing Square, we design an environment where people are strongly encouraged to, you know, to push back in particular against me if they think I'm wrong. One of the best ways to advance, if you will, at Pershing Square is to prove that I'm wrong and identify problems and risks early.

So you have no fear?

I don't really have fear, but you know, it's a crazy world. So, you know, important to stay safe.

Obviously you're not happy with status quo, especially, you know, in New York. There was some speculation that you would run for mayor. Is there truth to that? Would you run?

Is it something I could do someday? I would say possibly, but I think I'm, I think I'll, I could achieve a lot more by helping a very talented person do that job, get, get elected and, and do that job, and then being otherwise helpful. We're about to announce a major New York City-related project I think will be very good for New York in the kind of healthcare science area. So we're gonna, you know, try to do our best to help New York City. I hope Nadine can be a better mayor, but ideologically I don't think socialism is the answer. The socialist and the Marxist experiment has killed millions of people, literally killed millions of people. Now, that's not to say that the points he makes about apartment affordability, rents, etc., he's entirely right. But the way to solve that problem, by freezing rents on half the renters, you're driving up rents on the other half. You know, there are buildings in New York that are comprised of rent-stabilized units, and where those people got a 2-year rent freeze, and free market units where those people, their rents had to go up in order for the landlord to cover their, you know, costs that have inflated because half his rent roll, you know, is fixed for the next 2 years.

I mean, that seems like an entirely unfair system, and that kind of activity discourages development. And the way you bring rents down is you increase the supply. And, Madame is not doing really anything to increase the supply of new units. It's doing the opposite. It's discouraging. You know, developers are risk takers and they're the, they're the last dollar in and they're not going to risk their capital unless they, they believe it's a friendly environment for landlords. And New York has become a very unfriendly environment for landlords.

Okay, so we'll, we'll keep an eye out to see if, uh, Mayor Ackman campaign comes out in the future. But for now, what are you watching for with the midterms?

Obviously, this is very important election. You know, it will be more difficult for the president to get things done, obviously, if House and Senate tip the other direction. You know, kind of a tragedy, Lindsey Graham passed away. I don't think his seat is at risk of, you know, switching, but he was a very important fixture in the Senate. You know, I, I don't wanna see the DSA con— continue to get more, you know, presence in the Congress. I think that's really, really bad for the country.

Zoom out. What generally are you hoping for the world that your children, your 4 daughters will inherit?

Love a world where everyone can live happy life, you know, access to high-quality healthcare, opportunity for a job to— for they can earn or make a reasonable living, have their own home, and advance their family so each generation can make progress versus the previous one. You know, love to have a world where there's— we're not fighting a war in Europe or in the Middle East, where, you know, 18, 20-year-old, 22-year-old mostly men and some women are giving up their lives. It's just, you know, the whole Russia-Ukraine war is a tragedy. And, you know, many, many thousands of Ukrainians have died and, and I think the Russian toll is significantly larger. And these are, you know, my nephew went to school with young, young Russian guy that, you know, so far hasn't been conscripted into the Russian army, but, you know, it's like a, it's a death toll. So I'd love a world without war. And where, you know, where AI become, you know, creates this massive abundance. And I think that's very possible. Love a world without discrimination, all of the obvious, you know, things that, that people want. But I think the— there's a lot of misguided thinking about how we get to that world, and it's not with a— with the, the ideology of AOC or Mondame, you know, the, the whole capitalist democratic system that built this country is an amazing system.

It's imperfect, but you know, one that we're, that people are advocating for, you know, the RoKhan of the world. I think it's going to end up being a disaster.

Well, speaking of inheritance too, I'm a brand new mom of an 18-month-old daughter. What's your strategy or how do you think about actual inheritance for your kids?

You know, it's, I think it's a super complicated thing. You know, I was, I feel fortunate in that, you You know, my dad was a successful commercial mortgage broker, you know, made a very good living. There was a brief moment in my childhood where my dad was a bit nervous because he was a bit of an entrepreneur and didn't make money for a year or two and had dwindling savings, but generally lived the life of being kind of financially secure. But he told me, Bill, you're never going to inherit anything from me. So you got to make it on your own. And I think that was motivational for me, but I was always an entrepreneur. I've worked hard to create the opportunity for my kids to pursue whatever it is that they're passionate about. And I probably don't want them to select something— do I want my daughter to be a corporate lawyer so that she can make a living if even that's not what she really wants to do? So what matters to me is they find kind of fulfilling, great careers. But I, you know, on the margin, I want to help them be able to live in New York City if that's where they want to live.

And today, to be able to live in New York City, you know, as Where Van Damme is correct is it's become incredibly expensive unless you're a corporate lawyer or an investment banker or really successful entrepreneur. And there's no guarantee that your child's going to be one of those things. So, so I'm going to help them.

So leave them enough to live, but not too much so that they never have to work.

I think you get a lot of gratification out of pursuing and building a career and you know, being the best at whatever it is that you do. Uh, I don't think it matters that much what it is, but I do think having a career is important. But, you know, I would also say, I think we've diminished moms in this generation in a way different from when my mom was kind of raising us as kids. I think that's an incredibly worthy and important thing. You can manage being a mom and having a career, but I think it's okay if you just want to be super mom, if that economically works for your family. And that's, by the way, not easy. Okay? Anyone who thinks that's easy is entirely wrong. And educating the next generation, where a lot of that education is coming from the experiences they have at home, where, you know, with a parent at home makes a huge difference. I think it's incredibly important. You know, I respect someone who's made the decision, I'm just going to devote the next 15 years to my kids. I think that's an amazing thing if you could do it.

Yeah. And the worth of that. The childcare, the cooking, the driving, all of that, of course, adds up. Yeah. I know that firsthand. What have you found as the formula over the years that you think makes someone successful in whatever business they go into?

I think what makes someone successful are really basic things. Showing up on time for work, going the extra mile. Doing what you say you're going to do, kind of under-promising, over-delivering. If you go to work in some industry, you know, you study up so you become the expert in that industry, you know, more than your, your colleagues. You'll kind of rise above and you'll be, you'll be noticed. I remember when I took one of my first jobs in real estate, I went to the McGraw-Hill bookstore on 50th and 6th Avenue, and at lunch every day I would read books about real estate. And that gave me kind of an edge versus my peers and knowing stuff that other people took years of experience to learn. So amazing thing about AI, you can just have your AI teach you, you know, everything you need to know about a particular career and that kind of composition. So I think going, doing extra work, you know, everything you need to know, you can learn by reading. And today you can learn by your AI teaching you. And so I think, you know, I don't think— in my experience, it's not the person with the highest IQ that turns out to be the most successful person in business.

It's usually the person who people like, people trust, who works harder, you know, maybe a little more creative, never gives up. It's all of those kind of life skill, character things are what matter. And you can have all of those things tomorrow. You can't choose to have a higher IQ, but you could choose to learn more about whatever your field is than anyone else by just doing the work. You can work harder. You can— being honest is just a decision. So all of the character qualities you need, you can have tomorrow. You just have to decide.

We end all of our episodes, Bill, by asking our guests for a final tip that listeners can take straight to the bank. You have a really popular lecture I watched I watched some of it again last night. Many say it's better than an MBA. It's 44 minutes. Talk about a lemonade stand and you teach people about business. If you could distill it, what's the most important part of that? It's 44 minutes. Maybe you could do it in 4.

One, start investing early. Put aside a little bit of money each month and invest it in the market. If you don't have time to pick stocks, invest in an index fund. If you have time to pick stocks, invest in a company that's dominant in its industry. It's the best company in its industry, a company that doesn't use a lot of financial leverage, and a business that you believe will be a much bigger business 5, 10, 15, 20 years from now. And a business that's unlikely to be disrupted by, you know, a couple of women in a garage from just left Stanford University with some idea. And if you do that and you persist at that, you'll have a lot more money 10, 20, 30 years from now. The key is to have a long-term view. That's where you can have a competitive edge, because the vast majority of investors are very short-term, and the long-term player can be the big winner. It's also much more tax efficient. The government, for now, only taxes you when you sell. So all of those gains that you build up over time compound without your having to share any of the profit.

The government. And if you can open an IRA or a Trump account, a Trump savings account, then your money can compound tax-free over time, which is very important. Yeah, avoid paying taxes as much as you can legally.

You're bearish on short-term capital gains, bullish on long-term cap gains.

Yeah.