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Bill Ackman: 2024 Interim Letter to Shareholders

In his Pershing Square 2024 Interim Report, Bill Ackman discusses the current stock market environment, noting that a significant portion of market capitalization is now held by permanent owners such as index funds. This shift has increased the impact of short-term, highly leveraged investors on stock price volatility. These investors often react strongly to minor disappointments in company performance, leading to significant price fluctuations.

Bill emphasizes that Pershing Square its long-term investment strategy, focusing on high-quality companies with strong fundamentals. This means that market volatility can create opportunities for long-term investors to acquire undervalued stocks.

Despite a modest negative performance year-to-date through August 13, 2024, Bill argues that the core portfolio companies are performing well and expresses confidence that this strong business performance will eventually be reflected in stock prices. He also disclose two new stock investments during second quarter of 2024: Nike and Brookfield Corp.

Equity markets have exhibited an enormous amount of single-name stock price volatility for even the largest companies when they surprise investors with even minimally below-expectation overall results or small misses on certain closely followed business metrics […].

Greater stock market volatility is the long-term friend of the active investor with permanent capital who seeks to identify high quality companies which are not dependent on the capital markets to implement their business strategies. While an earnings’ miss or other business metric disappointment in a quarter could reflect the beginning of deterioration in fundamentals, in many cases the impact of the disappointment has only a marginal effect on long-term intrinsic value.

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Disclaimer of liability

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.

Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk

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