david: this is, uh, my kitchen table, and it is also my filing system.

over much of the past three decades, i've been an investor. [applause] the highest calling of mankind, i've often thought, was private equity. [laughter] and then i started interviewing. i watched your interviews, so i know how to do some interviewing. [laughter] i've learned from doing my interviews how leaders make it to the top. jeff: i asked him how much he wanted. he said 250. i said fine. i didn't negotiate with him. i did no due diligence. david: i have something i would like to sell. [laughter] and how they stay there. you don't feel inadequate now because being only the second wealthiest man in the world, is that right? [laughter] in recent years, one of the most successful wall street investors has been bill ackman. he has built pershing square into one of the most successful and listened to firms on wall street. but he has been outspoken in a number of other areas including philanthropy and politics. i had a chance to sit down with him to talk about a variety of issues, including his latest bet on where the economy is going. there is general consensus in the united states in some circles that we probably have avoided a recession for the near future, we are going to have a

soft landing. that is the consensus. is that your view as well? bill: that is really hard to predict. i do think the economy is weakening. we are seeing evidence of that in some of our companies. i have some concerns. there has been a huge subsidy in terms of low interest rates, and most companies fix their rates or their debt at very low rates. certainly real estate investors did the same. that works until it does not work. what will be interesting is to see what happens when people have to reprice their debt. that could have sort of a cliff-like effect. you are certainly seeing that a real estate. david: markets are assuming, and markets are not always right, that there will be a fed discount cut some time next year. as we talk now, about the end of november, it is not clear what the fed will do, but some say if the fed were to cut interest rates next year, it would help

the democrats and therefore be seen as very political. on the other hand some say the fed cannot wait until after the election because the economy might not need a stimulus. do you have a view on what the fed is likely to do? bill: i think they will cut rates and sooner than people expect. because what is happening is the real rate of interest, ultimately, which is what impacts the economy, keeps increasing as inflation declines. if the fed keeps rates in the middle 5's, and inflation is trending below 3%, i think that is having a retarding effect on the economy. and then, of course, again many businesses and certainly individuals have the benefit of fixed rate debt, and for companies and commercial real estate, that starts to roll off. so i think there is a risk of a hard landing if the fed does not start cutting rates pretty soon. i think the market expects some time middle of next year. i think it is more likely probably as early as q1. david: for the economy itself, do you think it will really make a difference if president trump

is the republican nominee and gets elected or if president biden is the democratic nominee and gets elected? bill: i do think leadership matters enormously in everything from the economy to geopolitics, and i hope we will have a broader selection than trump and biden. i think biden has done a lot of good things, but i think his legacy will not be a good one if he is the nominee. i think the right thing for biden to do is to step aside and say he is not going to run and create the opportunity for some competition of alternative -- david: why do you think that? bill: i think he is past his prime in kind of a meaningful way. it is a bit like the ceo of a major company. it is full-time job. and you need to be at your -- you know, you need to be strong. you need to be at your intellectual best. and i don't think biden is there. i do not say that with any derision of the president. i always respect the president and want whoever the president

is to be successful, but i think he is clearly past his physical and cognitive peak. david: you are a young, experienced investment professional. you ever thought of running for office yourself? bill: i think if the country wanted me at some point, you know, i would be open to it. i think it's not my time. i still have a lot of work to do. and, you know, if i ever take that step, i would have to do -- i would have to find myself at a time in life where i felt ready to take on that kind of responsibility. but it is something the country would have to ask me as opposed to me putting myself out there. ♪

david: let's talk a moment about the background of yourself, where you grew up, and how you came to this business. where did you grew up? bill: i grew up in chappaqua, new york. david: did you say to your parents, i want to be a hedge fund investor? bill: no. david: what did you want to be? bill: i wanted to be a businessman, is probably what i told them. at age 10 or something. i always had entrepreneurial

jobs and things like that. david: as a young boy, did you have any newspaper routes or things like that? bill: sure. my dad did not believe in allowances. he said if you want to make money, you have to work. initially, he offered me some job opportunities. one early one was digging a 50-foot-long sort of ditch as i would describe it to help deal with water flow off of our property and he offered to pay me whatever it was, the dollar an hour or something like this. and it was a good lesson that i did not want to get paid per hour. the next time he gave me a project, i said let me price the project. and then it does not matter how quickly i get it done. i don't want to be paid on an hourly basis. so those were some of the early things. i would not call them entrepreneurial, but they earned me some spending money. in terms of early life job experiences, one of the most valuable ones was actually when i was a harvard student.

there was something called the let's go travel guides, which were books students wrote about budget travel. and a friend of mine, whitney tilson, and i, who became a friend, sold advertising for those guides around the world, working out of the basement of a dorm room. we sold hundreds of thousands of dollars of advertising for those books, and we got a commission for doing so. i got a 15% promote for selling advertising. and that kind of led to this hedge fund thing. david: you did pretty well at harvard. bill: yes. david: when you graduated, you then did what? bill: i graduated and worked for my dad. my grandfather and his brother started a firm for financing real estate developers, what you might call a commercial mortgage brokerage. and also raised equity financing for developers, sold property. and i went to work there. i spent a little under two years there before going to business school. david: you went to business school at harvard? bill: i did. david: after you graduated from harvard business school, what

did you do? bill: that is when i started a hedge fund. david: you said, i am out of harvard business school, i do not need any more experience? i'm just going to start a hedge fund? bill: yes. i had started investing in business school with a classmate. actually, i went to harvard with a plan so i could someday be an investor, and there were no courses on investing in harvard, but there were courses on finance and accounting and competitive strategy with michael porter. that was the backdrop for my education about investing. i said i would open a brokerage account. i made a little money in my real estate commissions, and this would be another year of if i lose it all, it's another year of harvard business school. if i learn something from it, maybe it's a career. and i kind of fell in love with investing. it is something you can figure out whether you are good at or not in a couple-year period of time. david: so you started pershing square after that or right away? bill: i started with a firm called gotham partners with a friend called david berkowitz from business school. we started in september 1992.

and, yes, we had no experience. what was interesting is none of the people who knew me in high school -- parents, my friends had no interest because they thought of me as a kid, but we raised money from mostly people who were themselves good investors, and i think they could see in us i guess some potential. david: so you then transformed that into pershing square a year or two later? bill: no. so gotham was a decade. and we did kind of public equity and private equity and some venture capital and actually had a pretty challenging period that led to a decision to wind up gotham, and then i launched pershing square in january 2004, almost 20 years ago. david: you specialize in picking stocks. you were not a macro investor then, were you? you were a stock picker? bill: yes, i would say we were an activist stock picker. we would buy a pretty concentrated portfolio, buy large stakes in companies that we thought were great businesses or had great assets but were

undermanaged. david: when you are an activist -- of course, that word has different meanings to different meanings to different people, but did you call management and say we would like to be on the board, tell them how to run the company? did you do that? was that intimidating to do that? bill: that is not exactly what we said, because again, we were young and inexperienced, but it was more that we would find a company -- one of the early investments was wendy's, the hamburger chain, and wendy's owned 100% of tim hortons in canada. and tim hortons was a profitable, successful coffee/doughnut chain principally in canada. you could fairly clearly see that business was worth about $5 billion at least. it had about $450 million of operating income. it was probably worth more than that. but you could buy all of wendy's for $5 billion. so literally the market was ascribing zero value to the wendy's franchise and our advice to the ceo was just spin off tim hortons and focus on fixing wendy's, but you can create enormous value by separating the two companies.

so it was a bit like investment banking where we did not charge a fee. and actually, back then, because we could not get a return phone call, because we were a tiny little fund circa 2004, we hired blackstone, which had an investment bank at the time and we hired them to put together a fairness opinion, if you will, of what wendy's would be worth if they spun off tim hortons. we wrote a letter to the board. we attached the blackstone valuation, which was nearly double where the stock was trading, and then, six weeks later, magically, they spun off tim hortons. david: you did that with other companies. and being an activist was consistent with your personality to do this? because you have to be a tough guy to call up ceo's and they, i have a better idea about how to run your company than you do. bill: it was consistent with my personality. i have always been some form of an activist, yes. david: and today, your focus is on activist investing or have you stopped that?

bill: when no one knows who you are and you are trying to effect change in a company, you have to sort of be an activist. you have to use the media and the public platform to in some cases shame a company into doing the right thing. 20 years later, having had a meaningful number of successful engagements with companies, we don't really have to do that anymore. a lot of the stuff we have done recently has been buying into company that has great leadership. and we are happy to share ideas. in some cases, there needs to be a change in leadership, but we are able to get things done without what you might call activism. more like engaged owners of businesses. david: you have done three extremely successful macro bets, one during the period of time of the housing crisis of 2007-2008. and that one was extremely successful. you did one again during the covid period of time, which was i think maybe your best investment ever.

you made 94 times your money investment. bill: 100 times, actually. yes. we bet that credit spreads would widen because we have to shut down the global economy. that was basically what happened. david: did people say, do you have any more deals like that when when you did that one? bill: yes. david: and those are hard to find. bill: the three black swan events of the last 20 years, we have been able to make big, profitable bets on, but these kind of black swan type of things hopefully occur only every seven years. let's say. david: when interest rates started going up, you made another macro bet that turned out to be pretty successful as well. so do you have any other macro bets you can mention now or nothing you can mention? bill: we have another one on as we speak. actually, we are betting the federal reserve will have to cut rates more quickly than people expect. that is the current macro bet. david: you are going to continue to be involved in this issue and try to push harvard into doing what you think they should be doing?

bill: yes, i'm an activist, but my activism today is probably not in the corporate boardroom. it's on campus. ♪

david:you make all the final decisions yourself? >> it works if we have personal investment team. it is one that a two-person team will do a deep dive on. i will do less of a deep dive. i won't be the person that talks to former employees, that kind of thing. and then we talk about every idea as a team. ultimately the team collectively, we don't do things generally that we don't have collective buy-in on. at the end of the day, i do

retain the ultimate veto yay or nay. the ultimate decision on sizing. one big thing i made in the last couple of years, i appointed a c.i.o. who has been with the team about 14 years. ryan is exceptional and has taken a real leadership role among that eight-person team. i use the word team often here. that's how this place operates. david: what type of people would get a job here? what is it you're looking for when you're interviewing people. >> it depends on what role. people on the investment team, generally they have graduated at the top of their class at bwharton. they have always been interested in investing.

graduated top of their class at wharton. they have always been intereste this is not a place where the typical hedge fund firm people are cycling through idea of the week or the month. david: something investors have been interested in lately is artificial intelligence? >> the most direct investment we have in ai is google or alphabet. david: you're a shareholder in alphabet? >> we're a small shareholderrer because it is a large company. actually, it was ai that created the opportunity for us to buy google at an attractive price. basically, microsoft and openai had a very powerful

demonstration at the launch of a product, and google's launch was a bit of a disaster. the stock got crushed on the basis of the fear that google was behind in ai. and their advertising franchise more than covered the value of the company. you got whatever they were doing in ai, if you will, for free. in our view, based on the work we had done, was that google was neck and neck if not ahead of openai in terms of business progress. david: one of the pluses people would say of being a successful investor is you make a fair amount of money and you have the opportunity to be a philanthropist. you were one of the early signers of the giving pledge. why did you do that? why did you commit to give away half of your net worth? bill: you commit to half or more. that was my plan anyway. one day, warren buffett calls up and says, i want you to sign the giving pledge. so he -- i think it is a -- i have learned a lot about philanthropy. i started the pershing square foundation i think 17 years ago. my personal business plan was

always to be super successful and then take the resources i don't need and redeploy them in a way that i thought was best for society. i do think that philanthropy is often not the best way to solve problems. i do think that capitalism and for-profit business models are generally the best way to solve problems, but there are still problems, societal ones, that cannot be solved in traditional capital markets. there is sort of a gap so those are the areas we tend to focus on. david: one of the institutions you have been philanthropic with is your alma mater, harvard. recently, you have been public about your criticism, the way harvard handled the events of october 7 and their aftermath. could you talk about that now? bill: the first reaction of a group of 34 harvard student clubs on the morning after october 7 was to put out a statement saying that israel was 100% responsible for the acts of hamas. and my view on that was, you

know, that's ridiculous, and that's more than ridiculous, i would say. and these students need to have some judgment and perspective. you can come out and say, look, i'm very unhappy about israel's treatment of palestinians in the west bank or you can say -- we can talk about the gaza strip, but you cannot support terrorists, particularly terrorists that rape and pillage and murder and burn and take hostages. and so my first point there was not so much directed at harvard, but, you know, love to know -- i got actually a text from a ceo in my industry. he's like, bill, we would like to know who the students are behind these clubs so i make sure i don't inadvertently hire them, so i tweeted out, sort of made that point, and caused a bit of a firestorm. i got a lot of pushback. why are you picking on students?

i said, look, you cannot hide behind a corporate entity if you are going to support terrorism. that's a major decision. so that was sort of my first initiative, if you will, at harvard. and then there were protests on campus and the protests were supportive of terrorism and supportive of things like a group of students shouting intafada. free palestine and from the river to the sea. the meaning of intafada means to kill jews. i raised this issue. harvard says they have a commitment to free speech. there is certain speech that is certainly permissible under the first amendment, and then there is certain speech that i would say is undesirable on a campus. david: have you said you are not going to donate to harvard anymore? have you said you are not going to hire these harvard students anymore? or people like those people? bill: no. number one, we are not going to hire anyone that supports terrorism at pershing square. i have not made any statements

about economic support for harvard. i want harvard to do the right thing. i don't want to threaten one way or another. that's not my approach. but i do think harvard needs to do a deep examination of, one, there's been a rise of antisemitic incidents on campus. and the university has done very little. their reaction was, let's form a task force. and i think, again, had this been another ethnic group where this kind of activity took place, harvard would be suspending the people involved. not disallowing -- david: you are going to continue to be involved in this issue and try to put harvard to do what you think they should be doing? bill: absolutely. i wrote a pretty thoughtful letter that was -- you know, i think 25 million people saw it on twitter, and remarkably, i did not get a response, which, to me, is a very bad and weak approach. literally no response. no acknowledgment.

no, "dear bill, i hear what you are saying." nothing. so i'm an activist, but my activism today is probably not in the corporate boardroom. it is on campus, and this is not just a harvard problem. and it is an nyu problem. it is a university of pennsylvania problem. it -- you know, the more i examine the issue, the more woke, the more left-leaning the institution, the more antisemitism, which is a very unfortunate thing. david: you built pershing from nothing to what it is today, a very successful hedge fund. what makes you most proud, having done that from the start or other things you have done in your philanthropic life? what are you most proud of having achieved in your life so far? bill: a number of things. i love having a company where i believe pretty much everyone here is excited to come in to work every day. i think we have made a meaningful contribution to a

capitalist system and the functioning of how -- probably the most significant impact we've had -- we were sort of an early activist, and as you probably know, the nature of boardrooms 20 years ago is meaningfully different today, and a big part of that is the rise of shareholder activism. i think we played an important role there. i think that has led to the u.s. capital markets and the u.s. stock market being one of the best-performing markets in the world, and that has a huge impact on people's pensions, people's savings, people's livelihood, on u.s. competitiveness, on our national security. and so, i think the good news about my day job is it is fun. it is profitable. it benefits our investors, but it also benefits the market generally. so i think that is an important and good contribution. philanthropically, we have invested 600-odd million dollars in a wide range of initiatives.

and, you know, a number of those -- it is a bit like investing. hopefully you have a few googles. and we have a couple of those -- a number of those philanthropically, and i do feel like we have invested money on which society has earned an attractive return. ♪

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>> which she set has the fastest growing population of them all? it is not the u.s. or germany. they are not even close. it is canada.