This post is part of our feature on Money Winners of 2008. See all 20.
Bill Ackman, who manages the hedge fund Pershing Capital, was one of the first major investors to realize what poor shape Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) were in. He warned that the apparent back-up of the federal government wasn't going to do investors much good unless the company fell apart and had to be bailed out.
"It doesn't matter what the rating agencies say about their capitalization," Ackman told CNBC. "Implicit guarantees don't work in the market that we're in now." And he turned out to be right, of course. Ackman was shorting the debt of Fannie and Freddie.
While Ackman has had to take some heat from investors who blame him for profiting off Fannie and Freddie's collapse, some critics say he was a bloodsucker, others point to his keen analysis as the reason we should allow short selling: it's the only way to offer an incentive to investors not to believe the hype.
Ackman also did well with Wachovia (NYSE: WB). He figured Citigroup's (NYSE: C) deal was undervalued and he profited when Wells Fargo (NYSE: WFC) offered a better deal. But, even Ackman wasn't able to perfectly play the financial stocks meltdown. He lost money buying AIG (NYSE: AIG).
As of September he told investors that his main fund was up 1.9% for the year -- after fees. Which for this year makes him a big winner.
Be sure to check out more Money Winners of 2008.
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Reader Comments (Page 1 of 1)
12-12-2008 @ 8:53AM
GAIL said...
Greedy creeps like this got us into the mess we are in. It is disgusting to read about how he cashed in on our losses.
12-12-2008 @ 10:28AM
Forzin said...
Oh please. I doubt you wouldn't have done the same thing, Gail.
12-12-2008 @ 12:07PM
Wvlngth10 said...
P-A-R-A-S-I-T-E ....
Of the BLOOD-SUCKING Variety...
12-14-2008 @ 7:35PM
MARC said...
all of his assets should be siezed, he had inside information
12-14-2008 @ 8:25PM
Bobby said...
The guy had the balls to pull the trigger based on the knowledge he had. Perfectly legal transactions going against an ill informed consensus. Where were the so called economists when all underlying hell was breaking loose? This guy's no bloodsucker,, he's just smarter than the average bear & showed the guts to follow his insight....
12-16-2008 @ 6:14AM
BHarrison said...
All of this is a result of Congress not performing their fiduciary responsibility to provide the basic, minimum "oversight and regulation" of our national economy. Congress is the MAIN CULPRIT in allof tis. If Congress, via the Fed, the SEC, etc. had required that all mortgage loan applicants be fully pre-qualified for the laons that they applied for, and that the FIs, corporations, and the markets/funds had to adhere to "sound accounting principles", then NONE of thisse economic debacles ould have occurred. Congress "sold out" to the speical interests groups by relaxing the existing regulations, and by voting adainst any implementation of "oversight and regulations" ; in enssence, and inf act, Congress ENABLED the corporations to orchestrate and to perpetuate the pyramid and Ponzi FRAUD schemes. Barney Frank, Ms Pelosi, Mel Martinez, Mr. Reid, Mr. Dodd, etc. . . . the VAST MAJORITY of Congress . . . voted AGAINST what would have established stability and integrity in our economy.
Every Congressman should be held PERSONALLY LIABLE for what they have and have not done in the matters that have led up to this economic debacle.