Pershing Square CEO Bill Ackman says speculative trading is producing wild price swings in the stock market. He also says the same dislocations let his fund buy companies it considers high quality at discounted prices.
Bill Ackman worries that the stock market is broken, saying speculative trading is driving wild price swings because of the amount of leverage in the system. The Pershing Square CEO made the remarks on CNBC's "Squawk Box" on Tuesday.
According to Ackman: "We’re back to the casino type markets when there was 95% leverage," he told CNBC. He added that he does not think this is inherently good for the economy or for society.
However, the volatility has also worked in his fund's favor. Ackman said the dislocations gave Pershing Square the chance to buy Microsoft when it was pummeled during the "SaaSpocalypse" earlier this year, and Amazon when it fell following President Donald Trump's tariffs. He said the fund also bought Alphabet when the stock moved "massively" following ChatGPT's launch.
Still, Ackman worries about the rise of one-day leveraged vehicles, perpetual futures and sports betting. He sees these products as dangerous for investors who treat the stock market as a get-rich-quick scheme, an attitude that could have disastrous consequences.
Among the stocks Ackman is especially bullish on are Visa and Mastercard, which he called among the world's "greatest" businesses. He also likes Netflix, where he disclosed a position in August.
Source: CNBC
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