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(Originally written December 2019)

I interviewed Bill Ackman in 2015  for my book, Market Masters. 

He was seemingly on top of the world. $20B AUM, gushing performance, star HF manager.

But then Bill had a fall from grace.  Well, it was almost a loud thump.

His long bet on Valeant (-$4B loss) almost took down his fund. 

And his short bet on Herbalife was a both a ‘head-scratcher’ for us, and a lesson in pride for Bill (we can be right, but still wrong).

Investors fled the fund.

His wife left him.

He moved out of his lavish Manhattan skyscraper to smaller digs.

And then he went away… next to no interviews, or sightings of Bill.

But behind closed doors, he was tinkering away, re-building his battered fund. 

Bill started a position in Chipotle (see photo above where Bill”s seen standing in line at a local Chipotle restaurant in NYC). But people scoffed, “doesn’t Chipotle just give you diarrhea?”.  Then a new stake in Starbucks.”How unoriginal” we thought. “I don’t pay a money manager to buy Starbucks”. And then a position in… Berkshire?

However, this year, something out-of-the-ordinary happened. We started hearing that Bill’s fund was up. Quarter after quarter…trouncing the market. “How can this be… I thought Bill was done”.  The first quarter of 2019 could have been a fluke (as all stocks in the S&P 500 seemingly experienced a sharp rebound), but this was consistent. Something was going on.

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Indeed, 2019 was the year that Bill Ackman got his mojo back. 

His fund is now up +57%, double the S&P 500’s performance. It definitely helped that Bill cherry picked quality, blue chip companies from the S&P 500, which equally had a stellar year in light of a trade war, impending recession, and presidential impeachment.

But really, the lesson here is this: Keep it simple. 

How simple?  Food, food, hotels, home reno, everyone’s favourite cherry-coke-drinking capitalist (Buffett), tasty lattes, and then some.

Here’s the most recent holdings snapshot in Bill’s Pershing Square fund, source:  https://seekingalpha.com/article/4313487-tracking-bill-ackmans-pershing-square-portfolio-q3-2019-update 

It’s clear now, and I hope this trend continues – that Bill’s decidedly past the days where he wants to look like the smartest guy in the room with long, convoluted 50+ page thesis papers to back his contrarian holdings. Sure, when those wildly contrarian ideas worked (e.g. MBIA short), they really worked, but when they didn’t he took some hard punches, including the aforementioned Valeant, and Herbalife, but also J.C. Penney and Target.

He’s keeping it simple.  When you meet Bill at a cocktail party now, he’s talking up the latest menu offerings at Chipotle, and how Starbucks coffee is his go-to morning saviour.

I also think that his new life partner, and wife – Neri Oxman – humbled him immensely, but maybe more importantly, Neri helped light that spark back up in Bill after the flame had gone away: “It’s very helpful when you’re going through a difficult period to be in a great relationship” with someone who is “super-supportive, loving and warm and believes in you”.

I’m happy for Bill. It’s not the story-book ending yet (as we know, he’ll have to keep up the gains) but it goes to show that investing is a long term game, and that we’ll all personally have our ups and downs throughout the years. The key is to stay in the game, and keep on compounding! 

Love him, or hate him; Bill’s back. And it’s a good lesson for all.

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