📖Bill Ackman
Learn from Past Sells
Post-mortem every sell decision to improve.
After every sell, review the outcome. Did you sell too early, too late, or at the right time? Post-mortems on sell decisions improve future judgment.
🏠 Everyday Analogy
📖 Core Interpretation
Bill Ackman sees markets as cyclical rather than linear. Understanding cycle position improves risk-taking decisions more than trying to call exact tops and bottoms.
💎 Key Insight：Reviewing sell decisions sharpens future timing.
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❓ Why It Matters
Ignoring cycles repeats the same mistakes: excessive optimism at peaks and excessive pessimism near troughs. Context matters for position sizing.
🎯 How to Practice
Monitor credit, valuation, earnings, and sentiment signals; reduce aggressiveness in euphoric phases and preserve flexibility in fearful phases.
⚠️ Common Pitfalls
Treating short rebounds as full cycle turns
Extrapolating peak conditions indefinitely
Becoming maximally defensive near valuation troughs
📚 Case Studies
1
Bill Ackman’s Concentrated Long in Canadian Pacific Railway (2013)
In 2011–2012, Pershing Square built a large, concentrated activist stake in Canadian Pacific Railway, ultimately around 14% of the company, making it one of the fund’s largest positions. In 2012, Ackman led a proxy fight, replaced much of the board, and installed rail veteran Hunter Harrison as CEO. By 2013, operational changes and efficiency improvements were translating into higher profitability.
✨ Outcome：Between Ackman’s entry in 2011 and his exit beginning in 2016, CP’s stock price rose several-fold, generating billions in gains for Pershing Square from one core position. The episode shows how deep research, active engagement, and conviction in a single large stake can produce outsized returns, validating the strategy of making a few large, focused bets instead of many small, diffuse ones.
2
McDonald’s Turnaround – Pershing Square’s Early Activism (2003)
In 2003, Bill Ackman’s Pershing Square built a significant stake in McDonald’s, arguing that the company’s real estate and core franchise operations were undervalued and mismanaged. Ackman pushed publicly for strategic changes, including refranchising company-owned stores, improving operational focus, and exploring a spin-off of company-owned restaurants.
✨ Outcome：While McDonald’s did not adopt all of Ackman’s proposals, it accelerated refranchising, improved capital allocation, and sharpened operational discipline. The stock rose substantially over the following years, validating the thesis that activist pressure could unlock trapped value. Lesson: Thoughtful, research-driven activism can prompt large, entrenched companies to make value-enhancing strategic shifts even without a formal proxy fight.
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