Bill Ackman Sees “Stupidly Cheap” Opportunities in Market Turmoil
Billionaire investor Bill Ackman, founder and CEO of Pershing Square Capital Management, is urging investors to embrace the recent market volatility, framing it as a rare window of opportunity to acquire high-quality companies at deeply discounted prices. In a post on X (formerly Twitter) late Sunday, Ackman declared, “Some of the highest quality businesses in the world are trading at extremely cheap prices. One of the best times in a long time to buy quality. Ignore the bears.” His bullish stance highlights a growing divide between Wall Street strategists navigating persistent economic uncertainty and prominent activists seeing value in the dislocation.
A “Highly Asymmetric Setup” in Government-Sponsored Enterprises
Ackman pointed specifically to mortgage finance giants Fannie Mae and Freddie Mac, calling them “stupidly cheap” and suggesting they offer a highly asymmetric risk-reward profile. The firms, which have been in federal conservatorship since 2008, trade at significant discounts to their tangible book value despite recent profitability. Ackman’s thesis hinges on potential reforms to their capital structures and the eventual resolution of their conservatorship—a long-standing regulatory overhang that, if clarified, could unlock substantial shareholder value. His Pershing Square Holdings has maintained a notable position in both securities for years, betting on a favorable political and regulatory shift.
Macro Headwinds Create the Dislocation
The investor’s call to action comes amid a complex macroeconomic backdrop. Markets have been rattled by stubbornly sticky inflation, shifting Federal Reserve policy expectations, and geopolitical tensions including the conflict in the Middle East. Energy prices have contributed to inflationary pressures, while comments from former President Donald Trump—who suggested a potential end to hostilities with Iran but also threatened military action if a peace deal isn’t reached and the Strait of Hormuz remains closed—have added to volatility. Ackman framed the geopolitical situation optimistically, writing it could lead to a “large peace dividend” for the U.S. and global economy. These combined factors have pressured valuations across sectors, particularly in rate-sensitive and capital-intensive businesses, creating the entry points Ackman references.
Pershing Square’s Performance and Strategic Pivot
Despite Ackman’s public optimism, his flagship vehicle, Pershing Square Holdings (listed in London), has struggled in 2025, down approximately 19% year-to-date as of April 29, according to its website. This performance reflects the concentrated, high-conviction nature of its portfolio, which can lead to significant swings. However, Ackman is simultaneously executing a major strategic move to cement his firm’s long-term structure. Earlier this month, Pershing Square filed to list on the New York Stock Exchange under the ticker “PS.” This listing would create a permanent capital vehicle for U.S. investors, directly mirroring Warren Buffett’s Berkshire Hathaway model and allowing the firm to hold investments indefinitely without the pressure of redemptions. The move is designed to give retail and institutional investors alike easier access to Ackman’s concentrated large-cap strategy.
Ackman’s track record includes high-profile wins, such as his successful activist campaign at Canadian Pacific Railway and his profitable bet on the COVID-19 vaccine rollout. However, his recent performance underscores the risks of a concentrated portfolio during sector-specific downturns. His current argument rests on a classic value investing premise: that short-term macroeconomic fears and political noise are overshadowing the intrinsic value of specific, resilient businesses. For investors, the key question is whether the discount to fundamental value in names like Fannie Mae and Freddie Mac truly outweighs the enduring regulatory and political risks that have suppressed their valuations for over a decade.
Mike Blake | Reuters
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