Bill Ackman said he is concerned that the stock market is "broken," and attributed the rise in speculative trading to significant price volatility linked to the level of leverage in the market.
“Every few days, I feel like the market is broken,” Ackman said on CNBC’s “Squawk Box” on Tuesday. “The prices at which stocks are trading make no sense to me. Yes, if you’re a long-term investor and can buy at absurd prices, that’s great. But I don’t think this is good for the country as a whole.”
“We’ve returned to a casino-style market where leverage reached 95%,” he added. “I don’t believe this is good for the economy or society in itself, and it’s causing these massive fluctuations in stocks.”
The founder of Pershing Square Capital Management said that these market distortions also present opportunities for the hedge fund to acquire undervalued assets.
Ackerman said that Pershing Square bought shares in Microsoft earlier this year when it was heavily hit by the so-called “SaaSpocalypse”; also purchased after Amazon declined due to tariffs imposed by U.S. President Donald Trump. He also stated that the company bought shares in Alphabet during the “sharp” price fluctuations following the release of ChatGPT.
However, this billionaire investor is concerned that the rise of daily leveraged products, perpetual futures, and sports betting poses a danger to investors who view the stock market as a get-rich-quick scheme—a mindset that could lead to catastrophic consequences.
“This is good for us in the long term—‘us’ refers to Pershing Square,” he said. “I don’t think it’s good for the country.”
Among the stocks Ackman particularly favors are Visa and Mastercard, which he calls two of the world’s “greatest” companies; he also disclosed a position in the streaming platform Netflix in August.