In a revealing interview with Forbes, billionaire investor Bill Ackman shared his investment philosophy, career-defining challenges, and surprising views on higher education.
Ackman’s approach centers on identifying “super durable companies” with irreplicable advantages. “The value of a financial asset is the present value of the cash it generates over its life,” he explains. His ideal targets operate like royalties: “Tim Hortons is a franchise restaurateur. They have a brand, they have a system…they get a royalty on every coffee and donut sold.” This framework extends to Uber (“they get 20% of the ride”) and other platform businesses where capital-light models create compounding cash flows.
The Pershing Square founder didn’t shy away from discussing his darkest professional moment—the Valeant Pharmaceuticals debacle. “The fund was down 30 something percent…I was joining severally personally liable…there’s not a lot of good going on.” His survival tactic? Relentless incremental progress: “I’m going to make a little progress every day. Compounding is the solution to the vast majority of progress in the world.” A pivotal JPMorgan loan (“I found out years later I was the largest unsecured borrower”) provided the lifeline to regain control of his investment vehicle.
Ackman saved his sharpest critique for Harvard, his alma mater, where he sees systemic rot. “34 Harvard student organizations came out and said that Israel was entirely responsible for the acts of Hamas…this ideology has emerged that the world is bicameral—there are oppressors and the oppressed.”
He highlights concerning financial mismanagement: “They’ve gone from almost no debt to now $8 billion of debt…80% of the endowment assets are in illiquid assets.” The governance structure troubles him most: “Harvard is managed by a 13-person board that elects itself…if any other company had been mismanaged this way… shareholders would have thrown them out.”
On macroeconomic risks, Ackman sees potential in overlooked assets like Fannie Mae and Freddie Mac, where he’s been a long-term shareholder. “The government’s interest is worth approaching $300 billion…these are two remarkable businesses.” He believes their eventual privatization could unlock value without disrupting mortgage markets: “They’ll emerge with at least 2.5% of equity relative to their guarantees…there’s massive amounts of private sector capital.”
Throughout the conversation, Ackman returned to first principles—whether analyzing companies or personal resilience. His advice makes sense: focus on durable cash flows, maintain operational flexibility, and recognize that true compounding works in portfolios and life alike. As he put it, “You make 0.1% progress every day…annualized, it’s a huge amount.”
You can watch the entire interview here:
For all the latest news and podcasts, join our free newsletter here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple:
