Bill Ackman gave a presentation on Sept 14, 2011 at the Delevering Alpha Conference.
Ackman’s favorite investment is the Hong Kong dollar. Ackman commented that the Hong Kong dollar is “one of the most undervalued currencies in the world.”
Ackman is buying Hong Kong dollar call options, because they are relatively cheap. Bill Ackman stated that “It’s a small trade, but if it’s successful, it will be our most profitable.” He also says retail investors could outright buy the currency, or buy it using leverage.
Bill Ackman’s Presentation embedded below:
How Ackman Will Lose ‘Lot of Money’ on Hong Kong Currency Peg Bet?
William Ackman, founder of hedge fund Pershing Square Capital Management LP, will “lose a lot of money” on his bet that Hong Kong will amend its currency peg to the dollar, city Chief Executive Donald Tsang said.
Ackman, who netted more than $1 billion on a six-year short bet against the bond insurer MBIA Inc., said in September that he is buying Hong Kong dollar call options. The wagers will make money if Hong Kong changes its three-decade long linkage to the U.S. dollar and allows the currency to rise or if option prices increase before maturity.
“I think he’s going to lose a lot of money on that,” Tsang, 67, said in a Bloomberg Television interview in New York yesterday. The peg is a “very important anchor underpinning Hong Kong growth and Hong Kong’s monetary stability and we are not going to change,” he said. Tsang fended off a speculative attack to weaken the Hong Kong dollar and break the peg when he was finance secretary during the Asian financial crisis in 1998, a policy that involved $15 billion of stock purchases and proved profitable for the city.