During his recent interview with AJ Bell, Bill Ackman discussed the two places where he’s investing his capital right now. Here’s an excerpt from the interview:
Ackman: So we put our capital in two places. One, we launched one of the more aggressive buy-back programs out there. We’re buying in about a million and a half shares you know approaching about three quarters of a percent of our shares outstanding every month.
That’s a pretty aggressive program. It’s about 28% of the average shares outstanding. We think that’s the easiest investment that we can make right now.
One, we’re well capitalized you know plenty of cash on hand. Two, we’re trading at… as you know a 35% discount to NAV. Three, our companies are trading at in our view deep discounts to their intrinsic values. You get the benefit of that double discount. So we think that’s been a good place to deploy capital.
The other place we’ve been deploying capital is some of these sort of more opportunistic hedges. We’re investing a relatively small you know maybe one, two, two and a half percent of our capital in each of these various commitments together comprising at cost you know five or six percent of our capital.
But Investments we can make 6X, 8X, 10x and sometimes more, that seems a better use of capital for our marginal dollar than the next big equity commitment, and we’ve looked at a couple of things become closer to prices where we would own them, but stocks haven’t really gotten cheap enough for us to take our last dollar and buy the next big commitment.
You can watch the entire discussion here:
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