Whitney Tilson on his life post hedge fund career not just about cryptoforecasting – from his email to investors – presented without comment
The Bedford Park Opportunities Fund returned 13.5% net of all fees and expenses in the second quarter of 2021, bringing its year-to-date return to 27.6%. Q2 2021 hedge fund letters, conferences and more In the fund's second-quarter investor letter, which ValueWalk has been able to review, Jordan Zinberg, the President and CEO of Bedford Read More
I sure was miserable right then – but I can tell you that after those two weekends, it now takes a lot for me to feel upset about anything: Caught in the rain without an umbrella and get sopping wet? Ha! Forget my jacket at home and am freezing? No problem! Go 14 consecutive nights without a good night’s sleep, averaging ~4 hours per night (I’m hopefully at the tail end of that right now, though tonight will be my 15th tough night no doubt, as I’m about to go to a wedding)? Piece a cake!
Michelle Celarier with perhaps the best profile of Bill Ackman I’ve ever read (and there have been many!). What’s Eating Bill Ackman? After years of losses, a hedge fund iconoclast ponders his future., www.institutionalinvestor.com/article/b15ywsstynx8fm/whats-eating-bill-ackman. Excerpt:
The loss raised more questions about the future of this former Wall Street rock star. Possibly more than any hedge fund manager, he created the era of the swaggering activist who could move markets simply by going on CNBC and announcing his presence in a stock. Now people are asking: Can he recover the hedge fund world’s esteem — or has his reputation been permanently tarnished?
Ackman, known for an abundance of self-confidence and an exuberant ego, is having none of that. He says ADP will have to make good on promises it made to shareholders in order to win the proxy contest, or he’ll put up a slate again next year. “Now management is being watched very carefully, and the ball is in their court,” he notes.
The hedge fund titan, whom Forbes estimates is still worth $1.3 billion, vows to come back. Investors who are sticking with him, as well as fellow activists and other hedge fund managers — including some who have criticized him publicly but declined to go on the record for this article — tend to agree.
“He didn’t get dumb overnight, and at some point he will find something really great and he will make a lot of money for investors,” says a major investor in Pershing Square who has been there since the early days, adding, “Everyone is down on Bill Ackman, so he’s the contrarian bet.”
Ackman, who relishes being a contrarian, is by turns defensive, apologetic, and adamant. Wearing a crisp blue-striped shirt with the sleeves rolled up, he keeps his arms crossed for the first half-hour of our interview, insistent that the ADP vote could eventually turn into a big win. “We lost the battle, but we expect to win the war,” he says.
The normally upbeat activist becomes more animated as he pledges to make investors whole and to bulletproof the firm. “Are investors unhappy with our performance? I’m unhappy with our performance,” he says excitedly, his eyes popping as his arms open wide. “But if I recover the way I expect to from this, Pershing Square becomes much, much stronger. We’re never going to challenge it again.” There will be “no more Valeants,” he adds.
PS–I’m mentioned in the second paragraph in the context of a weekend Bill and I organized in which we invited 22 of our friends to get our butts kicked for 62 hours straight by some badass current and former Navy SEALs as part of a program called Leadership Under Fire in which they gave us a tiny taste of the BUD/S program that aspiring SEALs are put through (and ~85% drop out of). (I’d done LUF, which I call “BUD/S lite”, four months earlier as part of a program available to members of Young Presidents’ Organization; to my knowledge, I’m the only person enough of a glutton for punishment to have done it twice! Yes, I do this for fun – and even pay a lot of money for it – LOL!):
On a pitch-black winter night in San Diego, California, Bill Ackman and several friends slipped into wet suits, boarded a van to a nearby pier, jumped into the frigid waters of the Pacific Ocean, and swam toward a distant string of lights.
Forty minutes in, one of the activist investor’s friends got a cramp and started to scream. “This is the kind of stuff where people drown. I thought I was done,” says Robert Jaffe, founding partner of hedge fund Force Capital. Another hedge fund manager, Kase Capital’s Whitney Tilson, survived the ordeal by crossing his arms over his chest to hold in body heat. “There’s nothing more frightening than swimming in the ocean at night,” he says.
Tilson, a friend of Ackman’s from their days at Harvard, had suggested the outing, an arduous three-and-a-half-day training camp with a group of former Navy Seals who bill it as a leadership course and call the night swim a “face your fears” challenge. Ackman thought it “sounded kind of cool.” He convinced 22 friends to join him.
(Slight correction: I used to be a lifeguard and certified Water Safety Instructor (swimming teacher), and have been a PADI Basic Open Water-certified scuba diver for 31 years, so the two-mile ocean swim in the middle of the night didn’t faze me at all – it’s just that the water was cold (January in San Diego) and my wetsuit wasn’t thick enough, so I became frozen to the core after nearly two hours in the water!)
Here’s a picture of me shortly after arriving at the beach after the swim (at about 4am on the first of three nights). I thought we might get a break, but noooooo. The SEALs yelled at us for being so slow and made us do push-ups in the sand and cover ourselves in mud:
In November I developed a new investment seminar, the Kase Advanced Seminar on Value Investing and Hedge Fund Entrepreneurship • From 8:15am to 7:00pm every day from Monday, Dec. 4th through Friday, Dec. 8th (plus dinners afterward on three nights), I was teaching, moderating or giving feedback to my 12 students, half of whom were running small (under $20 million) hedge funds and the other half planning to do so in the near future • Because I had never taught this seminar before (in fact, I’m not aware that anyone has ever taught anything quite like this), I had to create 80%+ new material, much of it on the fly – After each day, based on the questions my students asked and the direction the conversations went, I decided on the agenda for the next day and, often, had to create new content overnight
I feel a bit manic • I’ve become more giddy/goofy – Say or write whatever pops into my head (be careful Whitney!) • I don’t feel as sharp mentally – Maybe a 5-10% decline if you tested me – My crossword puzzle times are slower • My head, throat and eyes hurt and my nose is running • I’ve become very emotional – I’ve cried more in the past week than in the past decade • I started crying in front of my students as I described a particularly difficult episode in my life, which was definitely not on the schedule! • I get choked up every time I talk about my wife’s serious car accident a few weeks ago, and I feel much more intense love for her than usual (I know, I know, there’s nothing greater than infinity, but you know what I mean! ;-)
It’s an amazing feeling to be this creative and productive – I feel like I could conquer the world right now! • However, it would not be good for me, mentally or physically, to do this very often – Saying or writing whatever pops into my head is particularly dangerous – But going on the occasional “jag” (as my mom calls it) could be very beneficial • I wonder how long it will take me to get back to normal?