After watching Valeant implode, Herbalife do the opposite, and virtually every other part of Bill Ackman's career, in his words, “fall apart,” one would do well to remember that the Ack Man is not always wrong. In fact, he's learned plenty from his experiences, with lessons including You Can't Control The Government and It's Bad When Stocks Go Down.
The overarching moral is one Ackman learned all the way back in 2010: “Sometimes the better part of valor in an investment situation is to move on. Onward.” But since the intervening years have shown that bit of canned wisdom to be useless, we're left wondering if there's some deeper, even more profound insight that has emerged from the Passion of the Bill. Now we know there is:
“You pick amazing people, you don’t have to worry, you can trust them,” Ackman said of Pershing Square Foundation’s staff and grantees, drawing an analogy with Warren Buffett managing Berkshire Hathaway with a head office of only 25 people.
And his role? “I need to make money,” Ackman said in an interview later in the evening. “I used to take it for granted, now I’m very focused.”
So what has Ackman been doing for the last few years if not making money? When you're watching every pillar of a massive investment thesis turn to dust, it's easy to get wrapped up in some kind of savior complex. Valeant wasn't some lost cause to Ackman – it was a like a troubled teen who fell into his custody, needing only the strong moral guidance of a wise father figure to get on the right path. In the case of Herbalife, meanwhile, Ackman has expended his energies playing out some Erin Brockovich fantasy, the lone truth-teller challenging the evil corporation.
Of course, both of these activist-plays-cum-character-studies are intended to generate returns for shareholders. But it's easy to see how all the tangential stuff starts to distract from Pershing Square's ostensible raison d'etre.
Anyway, we look forward to this new chapter in the life of Ackman: the part where he makes money.