Bill Ackman - road to the first mil

[SunTrader]

His business model is copyable by anyone with a brokerage account. Sell options/buy stocks/reinvest dividends/repeat endlessly. That is why his biography is called snowball, it refers to the compounding of money in the way described.

Have you read the biography. I haven't. But I have followed the man since first seeing him on PBS's Wall Street Week with Louis Rukeyser back in the 80's.

I found this, which I believe is from the book, that emphasizes his key strategy:-

In 1962, Warren saw an opportunity to invest in a New England textile company called Berkshire Hathaway and bought some of its stock. Warren began to aggressively buy shares after a dispute with its management convinced him that the company needed a change in leadership. Ironically, the purchase of Berkshire Hathaway is one of Warren’s major regrets. (For more, see: Risks and Rewards of Berkshire Hathaway.)

Understanding the beauty of owning insurance companies – clients pay premiums today to possibly receive payments decades later – Warren used Berkshire Hathaway as a holding company to buy National Indemnity Company (the first of many insurance companies he would buy) and used its substantial cash flow to finance further acquisitions.

So yes it is copyable by anyone who first start with and then continues to control ginormous free cash producing businesses like insurance or trust companies.

 

[ZBZB]

Have you read the biography. I haven't. But I have followed the man since first seeing him on PBS's Wall Street Week with Louis Rukeyser back in the 80's.

I found this, which I believe is from the book, that emphasizes his key strategy:-

In 1962, Warren saw an opportunity to invest in a New England textile company called Berkshire Hathaway and bought some of its stock. Warren began to aggressively buy shares after a dispute with its management convinced him that the company needed a change in leadership. Ironically, the purchase of Berkshire Hathaway is one of Warren’s major regrets. (For more, see: Risks and Rewards of Berkshire Hathaway.)

Understanding the beauty of owning insurance companies – clients pay premiums today to possibly receive payments decades later – Warren used Berkshire Hathaway as a holding company to buy National Indemnity Company (the first of many insurance companies he would buy) and used its substantial cash flow to finance further acquisitions.

So yes it is copyable by anyone who first start with and then continues to control ginormous free cash producing businesses like insurance or trust companies.

Options are insurance. You crash your car you PUT it back to the insurance company. So to get cash flow in your account to buy stocks sell options/buy stocks/reinvest dividends/repeat endlessly. If your account is small then borrow against your house at a few percent fixed interest and then operate the business model.

 

[SunTrader]

Options are insurance. You crash your car you PUT it back to the insurance company. So to get cash flow in your account to buy stocks sell options/buy stocks/reinvest dividends/repeat endlessly. If your account is small then borrow against your house at a few percent fixed interest and then operate the business model.

I trade - futures only. Let others invest. Or deal with stocks, options or bonds.

But I don't need to learn about insurance or how to play the game in general. Buffett is one of the best but the advantage he has had is not something many others can ever attain no matter how much they leverage themselves.

 

[newwurldmn]

His business model is copyable by anyone with a brokerage account. Sell options/buy stocks/reinvest dividends/repeat endlessly. That is why his biography is called snowball, it refers to the compounding of money in the way described.

No.
1. He makes a lot of money on private companies that he purchases outright. You can't do that.
2. He gets a lot of insider phone calls - especially in times of distress. He can sell his brand for lucrative deals.
3. His model has evolved over time with information getting faster and with his balance sheet growing. You will fail if you follow the Intelligent Investor to the letter. But Warren could do it for decades.
4. Warren's private businesses generate cashflow, which means that if he invests a billion dollars in a stock today; next year he has a billion dollars more to invest. He doesn't need to monetize this stock for his investments tomorrow.

 

[DiceAreCast]

I agree. How someone thinks that he can copy a legend's approach to investing just by reading his book is unfathomable to me. But those people thankfully exist in the trading world. Without them the competition would be so much tougher.

No.
1. He makes a lot of money on private companies that he purchases outright. You can't do that.
2. He gets a lot of insider phone calls - especially in times of distress. He can sell his brand for lucrative deals.
3. His model has evolved over time with information getting faster and with his balance sheet growing. You will fail if you follow the Intelligent Investor to the letter. But Warren could do it for decades.
4. Warren's private businesses generate cashflow, which means that if he invests a billion dollars in a stock today; next year he has a billion dollars more to invest. He doesn't need to monetize this stock for his investments tomorrow.

 

[newwurldmn]

Options are insurance. You crash your car you PUT it back to the insurance company. So to get cash flow in your account to buy stocks sell options/buy stocks/reinvest dividends/repeat endlessly. If your account is small then borrow against your house at a few percent fixed interest and then operate the business model.

Selling puts is not the same as selling life insurance to millions of people with actuarial edge, fees, and favorable tax regulations. Especially when your goal is to use those proceeds to buy stocks.

 

[stockpredictor]

Buffett was a leading beneficiary in the bank bailouts. Without big brother to help him, BRK would be crippled from multiple bankruptcies. A cheat, liar, and conman is he.

 

[sef88]

Selling puts is not the same as selling life insurance to millions of people with actuarial edge, fees, and favorable tax regulations. Especially when your goal is to use those proceeds to buy stocks.

Selling puts also eats into your margin which is an opportunity costs on its own.