Ackman Is Hedging The Pandemic; Comparing COVID Crashes

0
Ackman Is Hedging The Pandemic; Comparing COVID Crashes

Whitney Tilson’s email to investors discussing billionaire investor Bill Ackman is hedging the pandemic again; comparing the Covid-19 crash to prior ones.

Get Our Activist Investing Case Study!

Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below!

Q3 2020 hedge fund letters, conferences and more

Bill Ackman Is Hedging The Pandemic Again

1) Here's some very interesting breaking news: Billionaire investor Bill Ackman is hedging the pandemic again after raking in $2.6 billion from a similar bet in spring - Business Insider. Excerpt:

Exclusive: Dan Loeb’s Two New Stock Picks [Q1 Letter]

Nestle Dan Loeb Daniel Loeb third point capital hedge fund manager activist investor poison pen activism Yahoo corporate governance famous investorsThird Point's Dan Loeb discusses their new positions in a letter to investor reviewed by ValueWalk. Stay tuned for more coverage. Loeb notes some new purchases as follows: Third Point’s investment in Grab is an excellent example of our ability to “lifecycle invest” by being a thought and financial partner from growth capital stages to Read More


Billionaire investor Bill Ackman turned $27 million into $2.6 billion by insuring his hedge fund against a wave of corporate defaults earlier this year. The Pershing Square chief placed a similar bet – almost 30% of the original's size – on Monday after news broke of a highly effective COVID-19 vaccine, he revealed at the Financial Times' Dealmakers Conference on Tuesday.

"I hope we lose money on this next hedge," Ackman said, according to the Financial Times. "What's fascinating is the same bet we put on eight months ago is available on the same terms as if there had never been a fire and on the probability that the world is going to be fine."

Ackman described the vaccine news as "bearish" during his keynote speech, the Financial Times said. He cautioned people could become nonchalant about wearing masks and might worry less about catching or spreading the virus with mass inoculation on the horizon.

I've also become more bearish about the pandemic.

The news about rising hospitalizations in particular has been worse than I expected, especially in places like Arizona, which were already hit hard earlier this year. I'll share more detailed thoughts in a future e-mail (to receive them first, sign up for my coronavirus e-mail list by sending a blank e-mail to: [email protected]).

Comparing The COVID-19 Crashes

2) Though it's three months out of date, this is nevertheless an interesting chart from VisualCapitalist showing how rapid the COVID-19 crash and recovery was relative to five other major market crashes over the past century:

Note that the S&P 500 Index surpassed its prior all-time high set in February on August 18, only nine trading days after this chart was published. This means that the market's recovery took only 126 days – by far the fastest on record.

Previous article Try a Small Position in Fisker Stock, but Monitor the EV Competition
Next article Ghosn: The ‘Old Nissan’ Was Always Working Against Me
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

No posts to display