Billionaire Bill Ackman spotted the Covid storm early. Markets ignored it. He didn’t. Over 10 days in early 2020, his firm Pershing Square Capital Management snapped up credit default swaps on corporate bonds. Notional value: $74 billion. Cost: $27 million. Ten days later, worth $2.6 billion. A 9,500% return. He cashed out as stocks plunged 30%, then loaded up on beaten-down names like Hilton and Lowe’s. Those bets tripled in value over the next year and a half. Yahoo Finance detailed the move this week, drawing from Ackman’s recent chat with Robinhood CEO Vlad Tenev on Pershing Square’s YouTube channel.
Ackman started personal. His father, Larry, battled lung cancer and other ills. High risk if the virus hit. But soon the math shifted to markets. The World Health Organization called pandemic on March 11, 2020. Ackman moved faster. ‘There was this massive storm coming. We could see the storm, but everyone else was playing on a beach,’ he said. Credit default swaps act like insurance. Pay if debt defaults. Ackman bought protection on an index of investment-grade corporate bonds. Chaos hit. Lockdowns. Defaults loomed. Payouts soared.
Critics piled on. Ackman’s March 18 X post urged President Trump to shut the country for 30 days. ‘Mr. President, the only answer is to shut down the country for the next 30 days and close the borders,’ he wrote. Then came the CNBC interview: ‘Hell is coming.’ Some said he fueled panic to profit. Ackman shrugged it off. Markets tanked anyway. His fund grabbed the gains, flipped to long stocks at the bottom. Smart. Ruthless.
This wasn’t Ackman’s first rodeo. Back in 2008, he shorted MBIA bonds after years of digging. Called regulators. Copied 725,000 pages of docs. Made $1.1 billion when the crisis blew up. Or Canadian Pacific Railway. Took a 14% stake. Ousted the CEO. Hired rail legend Hunter Harrison. Stock tripled from $46 to $151 in 16 months. Market cap from $8 billion to $25 billion. Activist investing at its peak. X post by BigBrainBizness recaps his short-selling explainer using a coin analogy: borrow high, buy back low, pocket the spread.
Fast forward. Ackman’s playbook endures. In 2023, he shorted 30-year Treasuries via options. Cited deglobalization, green energy, worker power pushing inflation. Yields spiked over 80 basis points. He covered for $200 million profit, per old reports, though recent X chatter revives the tale amid bond jitters. No fresh Treasury wins in 2026 news. Instead, he’s pounding the table on Fannie Mae and Freddie Mac. Calls it his ‘best idea for 2026.’ Government holds warrants for 80% stakes. Bailout repaid with $300 billion plus. Release them from conservatorship. Shares could 4x on 2026 earnings multiples. Yahoo Finance on Fannie bet.
Pershing Square eyes public markets too. Filed for NYSE IPO under ‘PS.’ Up to 33 million shares at $50. No proceeds for the firm. Ackman’s pushing a Buffett-style closed-end fund. Meanwhile, a $64 billion bid for Universal Music Group. 78% premium. Taylor Swift, Billie Eilish on the roster. Shares jumped 11% on the news. Reuters. And talks for a new fund betting on market complacency. Echoes his 2020 tail-risk masterstroke. Financial Times.
Ackman’s edge? Vision plus conviction. He sees storms others beach-party through. Buys cheap insurance. Cashes big. Flips to offense. Critics call it fear-mongering. Results silence them. Markets price consensus. He prices risk. In 2020, consensus said contained virus. He bet shock. Right. Today? Overvalued stocks. Buffett’s $334 billion cash hoard. Private credit gates. Ackman-style hedges trade cheap again, as X users note. X post by felixprehn.
But risks lurk. Shorts can squeeze. Activism fights boards. Regulators probe. Ackman thrives on controversy. From Herbalife wars to DEI battles. Net worth: $8 billion. Pershing Square’s concentrated bets deliver. Five to ten ideas. Long-term. Cash gushers with moats. Simple. Predictable. He skipped mentors post-HBS. Self-taught via $100k brokerage ‘tuition.’ Lost some. Learned fast.
So what now? Watch Fannie. Universal. That complacency fund. Ackman’s 2020 windfall reminds: asymmetry rules. Pay small for huge upside. Lose little if wrong. Everyone plays beach ball. He buys umbrellas. Storm hits. Beach clears. He owns the boardwalk.
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