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Bill Ackman: 2023 letter to shareholders – expect higher interest rates

Bill Ackman, CIO of Pershin Square Holdings, gives his assessment of the past and current market in his annual letter to shareholders.

One of the new positions Ackman took in 2023 was Alphabet, and in the report he talks about the rationale behind it. Among other things, he writes: “A significant change to the PSH portfolio in H1 2023 was the addition of Alphabet, the parent company of Google. The Investment Manager had been following Alphabet for some time, and when the company’s share price declined earlier this year, primarily due to concerns about the impact of AI”

One of the other themes of the report is interest rates. Here we have seen steadily rising interest rates in the US (and Europe) in the past year. However, despite slowing inflation, Ackman does not expect us to return to low interest rates anytime soon

Investors have become so accustomed to low long-term rates for many years that 4.3% seems like a high long-term rate for many fixed income investors. We do not believe that current levels of long-term Treasury rates are high considered in a longer-term historical context, and when one does the math on what long-term rates must be for investors to earn an adequate long-term, risk-free return in excess of inflation.

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The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

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