During this interview with the New York Times, Bill Ackman discusses the value of joining startups for business school graduates, citing it as the best time in history to gain practical skills like payroll management, product marketing, and design. He argues that even if a startup fails, the experience is invaluable and could lead to joining the next big success, like Facebook.
Ackman also underscores the enduring importance of fundamental value investing, which relies on analyzing business fundamentals rather than market trends or quantitative signals. He believes quantitative trading is viable only when supported by fundamental investment decisions, reinforcing the role of fundamental analysis in driving business value.
Here’s an excerpt from the interview:
Ackman: So the recommendation I give to people graduating from Business Schools these days is this: this is the greatest time in history to work for a startup. There are lots of incredibly interesting businesses being formed, and if you can be one of the early employees, you’re going to learn a lot about how a business works—how to make payroll, how to market your product, how to design something—and those skills, I think, are invaluable.
First of all, you might even find it really interesting. You might have joined the next Facebook. So that’s one thing. Even if the business fails, you learn a ton from that. I think that’s the best experience you can get ultimately to be a good fundamental investor.
In terms of the future of fundamental investing, I don’t think everyone can be a passive investor, and I don’t think everyone can be a quantitative trader. And I think there will always be room for fundamental value investing, because fundamentally, stocks are driven, and business value is driven, by business fundamentals—not supply and demand for securities in the short-term, not the weather on certain days, and these various signals that are used by quantitative traders.
I’m not saying there’s anything wrong with it, but I don’t think that even quantitative trading works unless there are a lot of people making fundamental investment decisions.
You can watch the entire discussion here:
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