WEBVTT - Bill Ackman 0:00:02.960 --> 0:00:05.360 In recent years, one of the most successful Wall Street 0:00:05.360 --> 0:00:08.640 investors has been Bill Ackman. He's built Pershing Square into 0:00:08.640 --> 0:00:10.799 one of the most successful and listened to firms in 0:00:10.840 --> 0:00:13.200 all of Wall Street. But he's also been outspoken in 0:00:13.200 --> 0:00:16.720 a number of other areas, including philanthropy and politics. I 0:00:16.720 --> 0:00:18.239 had a chance to sit down with Bill in his 0:00:18.320 --> 0:00:21.280 office recently to talk about a variety of issues, including 0:00:21.320 --> 0:00:24.040 his latest bet on where the economy is going. There 0:00:24.120 --> 0:00:26.320 is a general consensus in the United States in some 0:00:26.360 --> 0:00:29.760 circles that we probably have avoided a recession for the 0:00:29.800 --> 0:00:32.440 near future. We're going to have a so called soft landing. 0:00:32.640 --> 0:00:35.040 That's the consensus. Is that your view as well? 0:00:35.880 --> 0:00:38.000 I think it's really hard to predict. I do think 0:00:38.040 --> 0:00:41.600 the economy is weakening. We're seeing evidence of that in 0:00:41.640 --> 0:00:45.199 some of our companies. You're seeing and I have some concerns. 0:00:46.159 --> 0:00:48.720 There's been a huge subsidy in terms of low interest 0:00:48.800 --> 0:00:53.639 rates and companies. Most companies fix their rates or their 0:00:53.680 --> 0:00:57.440 debt at very low rates, and certainly real estate investors 0:00:57.440 --> 0:01:00.000 did the same. And that works until it doesn't work, 0:01:00.120 --> 0:01:02.400 And so I think we're what's going to be interesting 0:01:02.480 --> 0:01:04.560 is to see what happens when people get have to 0:01:04.600 --> 0:01:06.880 reprice their debt, and I think that can have sort 0:01:06.880 --> 0:01:09.200 of a cliff like effect, and you're certainly seeing that 0:01:09.920 --> 0:01:11.399 in real estate now. 0:01:11.480 --> 0:01:14.080 The markets are assuming, and the markets are not always right, 0:01:14.120 --> 0:01:15.800 but the markets are assuming that there's going to be 0:01:15.840 --> 0:01:20.080 a FED discount cut sometime next year. As we talk 0:01:20.200 --> 0:01:23.240 now just about the end of November. It's not clear 0:01:23.280 --> 0:01:25.800 what the Fed will do. But some people say that 0:01:25.840 --> 0:01:28.320 the Fed, if they were to cut interest rates next year, 0:01:28.600 --> 0:01:31.399 would help the Democrats and therefore be seen as very political. 0:01:31.640 --> 0:01:33.479 The other hands, some people say the Fed can't wait 0:01:33.520 --> 0:01:36.560 till after the election because the economy might need a stimulus. 0:01:36.600 --> 0:01:37.960 So you have a view on what the FED is 0:01:38.040 --> 0:01:38.520 likely to do. 0:01:38.720 --> 0:01:40.760 I think they're going to cut rates, and you know, 0:01:40.760 --> 0:01:42.840 I think they're going to cut rates sooner than people expect, 0:01:43.240 --> 0:01:46.080 because you know, what's happening is the real rate of 0:01:46.080 --> 0:01:50.160 interest ultimately, which is what impacts the economy, keeps increasing 0:01:50.240 --> 0:01:52.800 as inflation declines. Right, So if the FED keeps rates 0:01:52.800 --> 0:01:57.000 in the sort of middle fives and inflation is trending 0:01:57.040 --> 0:01:59.640 below three percent or you know, that's a very high 0:01:59.640 --> 0:02:01.960 real r of interest and I think that is having 0:02:02.000 --> 0:02:04.800 a sort of retarding effect on the economy. And then 0:02:04.840 --> 0:02:08.560 of course, again, you know, many businesses and certainly many 0:02:08.800 --> 0:02:11.960 individuals have the benefit of fixed rate debt, and that 0:02:12.040 --> 0:02:15.360 fixed rate debt, certainly for companies and for commercial real estate, 0:02:15.400 --> 0:02:17.640 starts to roll off. So I think there's a risk 0:02:18.160 --> 0:02:20.560 of a hard landing if the FED doesn't start cutting rates, 0:02:20.639 --> 0:02:22.400 you know, pretty soon. So, you know, I think the 0:02:22.440 --> 0:02:25.120 market expects sometime middle of next year. I think it's 0:02:25.120 --> 0:02:26.679 more likely probably as early. 0:02:26.440 --> 0:02:28.880 As Key one for the economy itself. Do you think 0:02:28.919 --> 0:02:30.600 it really is going to make a difference if President 0:02:30.639 --> 0:02:33.160 Trump is if he's the Republican nominee and gets selected, 0:02:33.280 --> 0:02:36.040 or President Biden is the Democratic nominee he's elected. 0:02:36.240 --> 0:02:40.480 You know, I do think leadership matters enormously in everything 0:02:40.480 --> 0:02:45.600 from the economy to geopolitics, and I hope we're going 0:02:45.639 --> 0:02:48.560 to have a broader selection than Trump and Biden. I 0:02:48.560 --> 0:02:51.400 think Biden's done a lot of good things, but I 0:02:51.480 --> 0:02:55.440 think his legacy will not be a good one if 0:02:55.520 --> 0:02:58.280 he is the nominee. I do think the right thing 0:02:58.280 --> 0:03:00.680 for Biden to do is to step asi and to 0:03:00.680 --> 0:03:03.360 say he's not going to run and create the opportunity 0:03:03.840 --> 0:03:07.120 for some competition of alternative. Do you think that I 0:03:07.120 --> 0:03:09.120 think that I think he's you know, past his prime 0:03:09.160 --> 0:03:11.120 in a kind of meaningful way. I do think of 0:03:11.240 --> 0:03:13.120 It's a bit like being CEO of a major company. 0:03:13.120 --> 0:03:15.880 It's a it's a it's a full time job, and 0:03:15.919 --> 0:03:17.680 you need to be at your you know, you need 0:03:17.720 --> 0:03:21.160 to be strong, you need to be at your intellectual best. 0:03:21.560 --> 0:03:23.760 And I don't think Biden is there. And I don't 0:03:23.760 --> 0:03:27.520 say that, you know, with any derision of the President. 0:03:27.760 --> 0:03:30.880 I always respect the president and want whoever the president 0:03:30.960 --> 0:03:34.080 is to be successful. But I think he's clearly past 0:03:34.160 --> 0:03:36.480 his physical and cognitive peak. 0:03:36.840 --> 0:03:40.840 So you're a young, experienced investment professional. You ever thought 0:03:40.840 --> 0:03:42.280 about running for office yourself? 0:03:42.800 --> 0:03:45.360 I think, you know, if the country wanted me at 0:03:45.400 --> 0:03:47.640 some point, you know, I would be open to it. 0:03:48.240 --> 0:03:50.440 You know, it's not I think it's not my time. 0:03:50.840 --> 0:03:52.760 I still have a lot of work to do, and 0:03:53.000 --> 0:03:56.000 you know, like to if I ever would take that step, 0:03:56.240 --> 0:03:59.080 I would have to do I'd have to find myself 0:03:59.600 --> 0:04:01.920 at a time in life when I felt ready to 0:04:01.960 --> 0:04:04.760 take on that kind of responsibility. But it's something where 0:04:04.800 --> 0:04:06.560 the country would have to ask me, as opposed to 0:04:07.400 --> 0:04:08.880 you me put myself out there. 0:04:09.040 --> 0:04:13.320 Let's talk a moment about the background of yourself, when 0:04:13.360 --> 0:04:15.240 you grew up and how you came to this business. 0:04:15.240 --> 0:04:16.520 So where did you grow up. 0:04:17.080 --> 0:04:18.720 I grew up in Chappaqua, New York. 0:04:18.800 --> 0:04:20.839 And did you say to your parents, I want to 0:04:20.839 --> 0:04:22.240 be a hedge fund investor? 0:04:22.440 --> 0:04:24.840 No, what did you want to be? I wanted to 0:04:24.880 --> 0:04:26.920 be a businessman. It's probably what I told him at 0:04:26.960 --> 0:04:28.680 age ten or something like this. So I always had 0:04:28.680 --> 0:04:30.880 all kinds of entrepreneurial jobs and things. 0:04:30.960 --> 0:04:32.719 So as a young boy, or did you have any 0:04:33.320 --> 0:04:35.000 newspaper routes or things like that. 0:04:35.360 --> 0:04:39.160 Sure, So my dad did not believe in allowances. He said, look, 0:04:39.279 --> 0:04:42.640 you want to make money, you have to work. And 0:04:42.680 --> 0:04:44.640 initially he offered me some job opportunities. 0:04:44.880 --> 0:04:45.479 Early one was. 0:04:45.480 --> 0:04:50.040 Digging a fifty foot long, you know, sort of ditch 0:04:50.360 --> 0:04:52.920 as I would describe it, to help deal with water 0:04:53.000 --> 0:04:55.719 flow off of our property. And he offered to pay me, 0:04:56.080 --> 0:04:59.120 you know whatever, It was a dollar an hour or 0:04:59.200 --> 0:05:02.040 something like this, and it was a good lesson and 0:05:02.120 --> 0:05:03.920 that I didn't want to get paid per hour. So 0:05:04.000 --> 0:05:05.599 next time he gave me a project, I said, look, 0:05:06.760 --> 0:05:09.440 let me price the project and then it doesn't matter 0:05:10.080 --> 0:05:11.600 how quickly I get it done on I don't want. 0:05:11.520 --> 0:05:13.560 To be paid on an hourly basis. So those are 0:05:13.600 --> 0:05:14.440 some of the early things. 0:05:14.600 --> 0:05:18.200 I wouldn't call them entrepreneurial, but they generated some money 0:05:18.200 --> 0:05:20.880 that I was spending money. In terms of early life 0:05:21.040 --> 0:05:22.159 job experiences. 0:05:22.520 --> 0:05:23.320 One of the most. 0:05:24.839 --> 0:05:27.200 Valuable ones was actually when I was a Harvard student. 0:05:28.320 --> 0:05:30.480 There's something called the Let's Go Travel Guides, which were 0:05:30.520 --> 0:05:32.160 these books that. 0:05:33.320 --> 0:05:35.680 Students wrote about budget travel. 0:05:35.960 --> 0:05:38.880 And a friend of mine, Whitney Tilson, and I he 0:05:39.000 --> 0:05:42.200 became a friend, sold advertising for those guides all over 0:05:42.200 --> 0:05:44.200 the world, and so we had this working out of 0:05:44.200 --> 0:05:45.320 the basement of dorm room. 0:05:45.880 --> 0:05:47.680 We sold hundreds. 0:05:47.360 --> 0:05:50.479 Of thousands of dollars of advertising in these books, and 0:05:50.520 --> 0:05:53.239 we got a commission for doing so, and it started 0:05:53.640 --> 0:05:56.599 that's got a fifteen percent promote for selling advertising, and 0:05:56.640 --> 0:05:58.240 that kind of led to this hedge fund thing. 0:05:58.720 --> 0:06:01.479 And you did pretty well on Harvard, and when you graduated, 0:06:01.560 --> 0:06:02.240 you then did what. 0:06:02.920 --> 0:06:04.240 I graduated work for my dad. 0:06:04.320 --> 0:06:08.479 Actually, my grandfather and his brother started a firm that 0:06:08.600 --> 0:06:12.120 arranged financing for real estate developers and what you might 0:06:12.160 --> 0:06:16.440 call commercial mortgage brokerage, and also raised equity financing for 0:06:16.520 --> 0:06:20.600 developer sold property and I went to work there. I 0:06:20.640 --> 0:06:23.760 spent a little under two years there before going to 0:06:23.760 --> 0:06:24.320 business school. 0:06:24.440 --> 0:06:26.240 And you went to business school at Harvard I did. 0:06:26.440 --> 0:06:28.560 And after you graduated from Harvard Business School, what did 0:06:28.600 --> 0:06:28.760 you do? 0:06:29.000 --> 0:06:30.400 That's when I started a hedge fund. 0:06:30.839 --> 0:06:33.760 And just just said, Okay, I've got a harvardusins school. 0:06:33.760 --> 0:06:35.159 I don't need to have any more experience. I'm just 0:06:35.160 --> 0:06:36.320 going to start a hedge fund. 0:06:36.920 --> 0:06:43.880 Yes, I had started investing in business school with a classmate. Actually, 0:06:43.920 --> 0:06:45.680 I went to Harvard with a plan about I was 0:06:45.680 --> 0:06:47.680 going to learn about investing so I could someday be 0:06:47.720 --> 0:06:50.960 an investor. And there were no courses on investing at Harvard, 0:06:50.960 --> 0:06:53.600 but there were courses on finance and accounting and competitive 0:06:53.600 --> 0:06:57.160 strategy with Michael Porter, and that was the backdrop for 0:06:57.279 --> 0:06:59.280 my education about investing. I said, look, I'll open a 0:06:59.279 --> 0:07:02.800 brokerage account. I've made a little money in my real 0:07:02.880 --> 0:07:06.120 estate commissions, and this will be another year of If 0:07:06.120 --> 0:07:08.159 I lose it all, it's another year of Harbard Business School. 0:07:08.360 --> 0:07:10.280 If I learned something from it, maybe it's a career. 0:07:10.480 --> 0:07:13.480 And I kind of fell in love with investing and 0:07:13.640 --> 0:07:16.040 it's something you can kind of figure out. Actually whether 0:07:16.080 --> 0:07:18.600 you're good at or not pretty a couple of year 0:07:18.640 --> 0:07:19.120 period of time. 0:07:19.200 --> 0:07:22.120 So you started Pershing Square after that period of time 0:07:22.160 --> 0:07:22.720 or right away. 0:07:22.840 --> 0:07:25.320 I started a firm called Gotham Partners with a partner 0:07:25.360 --> 0:07:27.760 named David Burkwitz, a classmate of mine a business school. 0:07:27.800 --> 0:07:31.120 We started in September of ninety two. And yes, we 0:07:31.160 --> 0:07:35.000 had no experience. And what was interesting is that none 0:07:35.040 --> 0:07:37.640 of the people who knew me in high school, like parents, 0:07:37.720 --> 0:07:38.560 my friends. 0:07:38.240 --> 0:07:39.920 Had no interest because they thought of me as a kid. 0:07:40.800 --> 0:07:44.840 But we raised money from mostly people who were themselves 0:07:44.840 --> 0:07:47.040 good investors, and I think they could see in us. 0:07:47.800 --> 0:07:49.680 I guess some potential, all. 0:07:49.600 --> 0:07:53.920 Right, So you then transformed that into Pershing Square year 0:07:53.960 --> 0:07:54.480 or two later. 0:07:54.800 --> 0:07:59.640 No, So Gotham was a decade and we did kind 0:07:59.640 --> 0:08:02.960 of equity and then private equity and some venture capital, 0:08:03.240 --> 0:08:07.800 and then actually had a pretty challenging period that led 0:08:07.840 --> 0:08:10.480 to a decision to wind up Gotham and then I 0:08:10.560 --> 0:08:13.280 launched Pershing Square in January of two thousand and four, 0:08:13.960 --> 0:08:14.880 almost twenty years ago. 0:08:15.000 --> 0:08:18.200 You specialized in picking stocks. You weren't a macro investor then, 0:08:18.240 --> 0:08:19.440 where you were a stock picker. 0:08:19.760 --> 0:08:22.800 Yes, I would say we were kind of an activist 0:08:23.280 --> 0:08:27.480 stock picker. We would buy pretty concentrated portfolio by large 0:08:27.480 --> 0:08:29.920 stakes and companies that we thought were great businesses or 0:08:29.960 --> 0:08:32.120 had great assets but were undermanaged. 0:08:32.520 --> 0:08:34.480 And when you're an activist, of course that word has 0:08:34.960 --> 0:08:37.480 different meanings to different people. But you would you call 0:08:37.559 --> 0:08:39.599 the CEO and say, we own five percent, we'd like 0:08:39.640 --> 0:08:40.920 to be on the board, we'd like to tell you 0:08:40.920 --> 0:08:42.680 how to run your company? Did you do that? And 0:08:42.760 --> 0:08:43.920 was that intimidating to do that? 0:08:44.559 --> 0:08:47.240 It's not exactly what we said, because again we were 0:08:47.280 --> 0:08:51.360 young and inexperienced, but it was more that we'd find 0:08:51.400 --> 0:08:54.199 a company. One of the early investments was Wendy's, the 0:08:54.240 --> 0:08:57.000 Hamburger chain, and Wendy's owned one hundred percent of a 0:08:57.080 --> 0:09:00.000 chain called Tim Horton's in Canada. And Tim Hortons was 0:09:00.080 --> 0:09:04.480 a very profitable, successful, pure franchise of coffee and donut 0:09:04.559 --> 0:09:07.720 chaining principally in Canada, and you could fairly clearly see 0:09:07.760 --> 0:09:10.480 that business was worth about five billion dollars at least. 0:09:10.520 --> 0:09:12.680 It had about four hundred and fifty million of operating income, 0:09:13.240 --> 0:09:15.440 probably worth meaningfully more than that. But you could buy 0:09:15.520 --> 0:09:18.360 all of Wendy's for five billion, So literally the market 0:09:18.400 --> 0:09:21.440 was describing zero value to the Wendy's franchise, and our 0:09:21.480 --> 0:09:23.839 advice to the CEO is, well, just spin off to 0:09:23.840 --> 0:09:27.240 Importance and then focus on fixing Wendy's. But you can 0:09:27.280 --> 0:09:29.600 create enormous value in just separating two companies. So it 0:09:29.640 --> 0:09:32.440 was a bit like investment banking where we didn't charge 0:09:32.440 --> 0:09:36.679 a fee, and actually, back then because we couldn't get 0:09:36.679 --> 0:09:39.200 a return phone call because we were a tiny, little 0:09:39.200 --> 0:09:45.480 fun circa two thousand and four, we hired Blackstone, which 0:09:45.480 --> 0:09:48.199 had an investment bank at the time, and we hired 0:09:48.240 --> 0:09:51.520 them to say, put together a fairness opinion, if you will, 0:09:51.760 --> 0:09:54.640 what Wendys would be worth if they spun off to Importance. 0:09:54.679 --> 0:09:55.959 And then we wrote a letter to the board. 0:09:56.360 --> 0:10:00.880 We attached the Blackstone evaluation, which was double where the 0:10:00.880 --> 0:10:03.200 stock was trading, and then six weeks later, magically they 0:10:03.200 --> 0:10:05.160 spun off Tim Horton's. 0:10:05.280 --> 0:10:07.439 Okay, so you did that with other companies and being 0:10:07.440 --> 0:10:11.360 an activist, was it consistent with your personality to do this, 0:10:11.400 --> 0:10:13.040 because you've got to be a tough guy to call 0:10:13.120 --> 0:10:15.719 up CEOs and say, look, I got a better idea 0:10:15.760 --> 0:10:16.960 abou how to run your company than you do. 0:10:18.480 --> 0:10:21.240 It was consistent with my personality. I've think always been 0:10:21.320 --> 0:10:22.520 some form of an activist. 0:10:22.600 --> 0:10:25.959 Yet and today your focus is on the kind of 0:10:26.040 --> 0:10:27.720 activist investing or you've stopped that. 0:10:28.280 --> 0:10:31.000 So, you know, when you're no one knows who you 0:10:31.080 --> 0:10:35.280 are and you're trying to affect change in a company, 0:10:35.400 --> 0:10:37.240 you have to sort of be an activist. You have 0:10:37.280 --> 0:10:41.120 to use the media, the public platform to in some 0:10:41.160 --> 0:10:44.680 cases shame a company into doing the right thing. Twenty 0:10:44.760 --> 0:10:49.640 years later, having had a meaningful number of successful engagements. 0:10:49.160 --> 0:10:50.800 With companies, we don't really have to. 0:10:50.720 --> 0:10:52.800 Do that anymore, and so a lot of the stuff 0:10:52.800 --> 0:10:56.360 we've done recently has been either buying into a company 0:10:56.400 --> 0:10:58.960 that already has great leadership and we're happy to share ideas. 0:11:00.280 --> 0:11:03.040 In some cases, you know there needs to be a 0:11:03.160 --> 0:11:07.319 change in leadership, but we're able to get things done without, 0:11:07.440 --> 0:11:09.480 you know, sort of what you might call activism, more 0:11:09.600 --> 0:11:11.680 like engaged owners of businesses. 0:11:11.720 --> 0:11:15.959 And you've done three extremely successful macro bets. One during 0:11:16.040 --> 0:11:19.200 the period of the time of the housing crisis seven 0:11:19.240 --> 0:11:22.640 o eight and that one was extremely successful. You did 0:11:22.679 --> 0:11:26.160 one again during the COVID period of time, yes, which 0:11:26.280 --> 0:11:28.360 was I think maybe your best investment ever. You made 0:11:28.400 --> 0:11:30.359 a ninety four times your money. 0:11:30.120 --> 0:11:33.319 Investment or less one hundred times actually one hundred times. 0:11:33.360 --> 0:11:37.520 Yeah, Yes, we bet that the credit spreads would widens 0:11:37.720 --> 0:11:40.080 because we needed we'd have to shut down the global economy, 0:11:40.320 --> 0:11:41.880 and that's basically what happened. 0:11:42.360 --> 0:11:44.600 So did people say, do you have any more deals 0:11:44.600 --> 0:11:47.640 like that? When you did that one? Yes, and that 0:11:47.760 --> 0:11:48.880 was a hard to find. 0:11:49.679 --> 0:11:52.120 You know, the three black Swan events in the last 0:11:52.160 --> 0:11:56.520 twenty years, we were We've been able to make a big, big, 0:11:56.920 --> 0:12:00.720 profitable bets on. But these kind of blacks one type 0:12:00.840 --> 0:12:04.280 things hopefully occur only every seven years. 0:12:04.360 --> 0:12:06.600 Let's say interest rates went up and they started going up, 0:12:06.640 --> 0:12:08.640 you made another macro back that turned out to be 0:12:08.640 --> 0:12:11.679 pretty successful as well. Yes, So do you have any 0:12:11.720 --> 0:12:13.800 other macro bets you can mention now or nothing you 0:12:13.840 --> 0:12:14.240 can mention? 0:12:14.760 --> 0:12:17.680 We have another one on as we speak. Actually, we're 0:12:17.760 --> 0:12:19.840 betting that the Federal Reserve is going to have to 0:12:19.840 --> 0:12:23.360 cut rates more quickly than people expect. That's the current 0:12:23.400 --> 0:12:24.559 macro bet that we have on. 0:12:25.280 --> 0:12:27.000 The pleasure you get out of doing this is what 0:12:27.280 --> 0:12:29.520 you like to make money. You have investors, you want 0:12:29.559 --> 0:12:31.520 to make them happier. 0:12:31.640 --> 0:12:32.480 So it's a lot of things. 0:12:32.559 --> 0:12:34.520 You know, one I work with a great group of 0:12:34.520 --> 0:12:36.960 people that I got to individually select. I mean, as 0:12:37.000 --> 0:12:38.520 you know the benefit of being a CEO, as you 0:12:38.520 --> 0:12:40.800 get to pick everyone you work with. We choose people 0:12:40.800 --> 0:12:44.480 based on principally personal qualities. You know, they a good 0:12:44.520 --> 0:12:46.720 human being, Are they a person of good character? Of course, 0:12:46.760 --> 0:12:48.920 they need to be exceptional in whatever it. 0:12:48.840 --> 0:12:51.200 Is that they do for the firm. And we're a 0:12:51.200 --> 0:12:51.720 tiny firm. 0:12:51.760 --> 0:12:55.480 We're unusual, and most firms with seventeen billion of assets 0:12:55.480 --> 0:12:57.560 have a lot more than forty one employees. And of 0:12:57.600 --> 0:13:00.600 the forty one, we only have eight people team, which 0:13:00.640 --> 0:13:06.280 is also unusual. So I think this plays attracts you 0:13:06.280 --> 0:13:08.959 know what people call force multipliers, you know, people who 0:13:09.280 --> 0:13:11.120 could get done a lot more whether you're on the 0:13:11.160 --> 0:13:15.120 accounting team the legal team than a typical. 0:13:14.960 --> 0:13:15.440 Kind of person. 0:13:15.480 --> 0:13:17.679 So you have a bunch of high performing, high quality 0:13:17.760 --> 0:13:19.320 fund people and I get to come into the office 0:13:19.360 --> 0:13:20.200 every day and work with them. 0:13:20.200 --> 0:13:22.160 So I would say that's a great thing too. 0:13:22.200 --> 0:13:24.120 It's actually a lot of fun to make money for people, 0:13:24.160 --> 0:13:27.240 you know, it's you know, I get the occasional letter email, 0:13:27.840 --> 0:13:32.280 often from existing investors, but actually more often from people 0:13:32.800 --> 0:13:35.680 that I don't know that happen to, you know, buy 0:13:35.679 --> 0:13:38.199 a stock along with us. You know, we've had some 0:13:38.520 --> 0:13:44.080 nice successes which you know, have been life transformational for people. 0:13:44.280 --> 0:13:47.200 So I do it is fun to make people money. 0:13:47.240 --> 0:13:50.840 Even if some hedge funds they've delegated the money decision 0:13:51.000 --> 0:13:54.000 making to many of different people in the firm, you 0:13:54.120 --> 0:13:55.679 make all the final decisions yourself. 0:13:56.120 --> 0:13:57.840 It works as we have an eight person investment team, 0:13:58.080 --> 0:14:02.480 and each idea is one that a two person team 0:14:02.600 --> 0:14:03.560 will do a deep dive on. 0:14:04.440 --> 0:14:05.920 I will do less of a deep dive. 0:14:06.720 --> 0:14:09.520 I'll read the public filings, I'll read conference called transcripts. 0:14:09.559 --> 0:14:12.680 I won't be the person that you know, talks to 0:14:12.960 --> 0:14:15.560 former employees that kind of thing. And then we talk 0:14:15.600 --> 0:14:19.000 about every idea as a team, and ultimately the team 0:14:19.240 --> 0:14:23.760 collectively we don't do things generally that you know, we 0:14:23.760 --> 0:14:25.760 don't have kind of collective buy in on. At the 0:14:25.920 --> 0:14:29.840 end of the day, I do retain the ultimate veto yeah, 0:14:29.880 --> 0:14:33.520 your name, and the ultimate decision on sizing. 0:14:33.800 --> 0:14:35.800 One big change I made in the last. 0:14:35.800 --> 0:14:38.800 Couple of years, I pointed a cio, a very talented 0:14:38.800 --> 0:14:41.200 guy named Ryan Israel who's been with the firm for 0:14:41.240 --> 0:14:46.000 about fourteen years. And Ryan is exceptional, and he's taken 0:14:46.000 --> 0:14:50.160 a real leadership role among that eight person you know team. 0:14:50.560 --> 0:14:52.920 But you know, I use the word team often here 0:14:53.000 --> 0:14:54.440 because that's how this place operates. 0:14:54.560 --> 0:14:56.840 What type of people would get a job here. You're 0:14:56.880 --> 0:15:00.520 looking for people who are really smart, good academic credentials driven. 0:15:00.560 --> 0:15:02.560 What is it that you look for when you're interviewing people. 0:15:03.000 --> 0:15:04.040 It depends on what role. 0:15:04.920 --> 0:15:10.240 But people on the investment team generally, yes, they've graduated 0:15:10.320 --> 0:15:12.880 to the top of their class at Wharton, They've always 0:15:12.880 --> 0:15:15.320 been interested in business and investing. They went to work 0:15:15.920 --> 0:15:20.080 at a Apollo a KKR Carlisle. We like people that 0:15:20.120 --> 0:15:23.840 get private equity experience. We think that's the best background 0:15:23.880 --> 0:15:27.600 for what we do. We're really private equity investors investing 0:15:27.600 --> 0:15:31.120 in the public markets, and the sort of temperament of 0:15:31.160 --> 0:15:34.920 a typical private equity person fits well here. We only 0:15:34.960 --> 0:15:39.760 own really eight companies. They don't change that often, so 0:15:40.160 --> 0:15:42.680 this is not a place where a typical hedge fund firm. 0:15:43.400 --> 0:15:46.240 You know, people are cycling through the idea of the week, 0:15:46.560 --> 0:15:48.680 the idea of the month. Here we may do one 0:15:48.720 --> 0:15:49.440 new idea a year. 0:15:49.560 --> 0:15:52.280 Now. Another area that investors have been very interested lately 0:15:52.400 --> 0:15:56.080 is artificial intelligence. Are you investing in things relating to 0:15:56.160 --> 0:15:57.080 artificial intelligence? 0:15:57.120 --> 0:15:59.240 You know, the most direct investment we have in AI, 0:15:59.360 --> 0:16:02.160 I would say, is good Google or Alphabet, which. 0:16:02.120 --> 0:16:04.280 You're a biggest shareholder of Alphabet. 0:16:04.400 --> 0:16:06.680 We're a small shareholder of alphaet because it's a massive company. 0:16:06.720 --> 0:16:09.240 We've got a you know, a large investments approaching two 0:16:09.240 --> 0:16:13.080 billion dollar investment in the business. And actually it was 0:16:13.240 --> 0:16:16.000 it was the It was AI that created the opportunity 0:16:16.040 --> 0:16:17.800 for us to buy Google at an attractive price. You know, 0:16:17.840 --> 0:16:22.000 basically Microsoft and open ai had a very powerful demonstration 0:16:22.080 --> 0:16:25.760 of a launch of a new product, and then Google's 0:16:26.080 --> 0:16:29.200 kind of launch or it was a bit of a disaster. 0:16:29.480 --> 0:16:31.920 Stock gout crushed on the basis of you know, fear. 0:16:31.680 --> 0:16:34.520 That Google is way behind an AI and and there 0:16:34.720 --> 0:16:38.320 you know, their advertising franchise more than covered the value 0:16:38.360 --> 0:16:39.920 of the company and you got whatever they were doing 0:16:39.920 --> 0:16:42.200 in AI if you will, for free. And our view 0:16:42.320 --> 0:16:44.680 based on work we had done, is that actually Google 0:16:44.760 --> 0:16:46.640 was sort of neck and neck, if not ahead of 0:16:46.720 --> 0:16:49.560 open ai in terms of their their business progress. 0:16:49.640 --> 0:16:51.600 So one of the pluses some people would say of 0:16:51.600 --> 0:16:53.560 being a successful investor is you do make a fair 0:16:53.560 --> 0:16:55.560 amount of money and then you have the opportunity to 0:16:55.600 --> 0:16:57.720 be a philanthropist. So you were one of the early 0:16:57.760 --> 0:17:00.600 signers of the Giving Pledge. Did you do that? Why 0:17:00.640 --> 0:17:02.880 did you commit to give away half of your net worth? 0:17:03.240 --> 0:17:05.879 Well, I think he committed half for more. That was 0:17:05.960 --> 0:17:08.240 kind of my plan anyway. And then you know, one day, 0:17:08.440 --> 0:17:10.679 you know, Warren Buffett calls up and says, Bill, you know, 0:17:11.280 --> 0:17:15.600 I want you to sign the Giving Pledge. So I 0:17:15.600 --> 0:17:19.840 think it's a you know, I've learned a lot about philanthropy. 0:17:20.160 --> 0:17:23.640 I started the Persian Square Foundation, actually, I think seventeen 0:17:23.680 --> 0:17:27.199 years ago. My personal business plan was always to be 0:17:27.520 --> 0:17:30.840 super successful and then take the resources I don't need 0:17:30.920 --> 0:17:33.240 and then redeploy them in a way that I thought 0:17:33.280 --> 0:17:37.399 was best for society. I do think that philanthropy is 0:17:37.440 --> 0:17:39.480 often not the best way to solve problems. I do 0:17:39.560 --> 0:17:43.359 think that capitalism and for profit business models are generally 0:17:43.359 --> 0:17:45.840 the best way to solve problems. But there are still problems, 0:17:46.280 --> 0:17:50.159 societal ones that can't be solved in the traditional capital markets. 0:17:50.200 --> 0:17:53.000 There's sort of a gap, and so you know, those 0:17:53.040 --> 0:17:54.680 are the areas that we tend to focus on. 0:17:54.680 --> 0:17:57.000 One of the institutions you've been very philanthropic with is 0:17:57.040 --> 0:18:01.120 your alma mater, Harvard. But recently you've been very public 0:18:01.119 --> 0:18:04.919 about your criticism of the way Harvard handled the events 0:18:04.920 --> 0:18:08.399 of October seventh then their aftermath. Could you talk about 0:18:08.400 --> 0:18:08.840 that now? 0:18:09.320 --> 0:18:11.840 The first reaction of a group of thirty four Harvard 0:18:11.880 --> 0:18:16.600 student clubs on the morning after October seventh was to 0:18:16.600 --> 0:18:19.119 put out a statement saying that Israel was one hundred 0:18:19.119 --> 0:18:26.160 percent responsible for the acts of Hamas. And my view 0:18:26.200 --> 0:18:30.840 on that was, you know, that's ridiculous, and that's more 0:18:30.880 --> 0:18:34.080 than ridiculous, I would say, And you know, these students 0:18:34.160 --> 0:18:37.159 need to have some you know, judgment and perspective. You 0:18:37.160 --> 0:18:40.040 can come out and say, look, I'm very unhappy about 0:18:40.080 --> 0:18:44.159 Israel's treatment of the Palestinians in the West Bank, or 0:18:44.200 --> 0:18:47.879 you can say, you know, we can talk about God's strip, 0:18:48.760 --> 0:18:53.119