Pershing Square CEO Bill Ackman said Tuesday that high leverage, increasingly speculative trading and sharp share-price swings have made him worry that the U.S. stock market is dysfunctional. According to Sina Finance, Ackman said the market felt chaotic every few days, with many stocks trading at prices that seemed illogical to him; while long-term investors could benefit from buying at unusually low prices, he said this was bad for the country.
Ackman said markets had returned to “casino-like” trading, with leverage at one point reaching 95%. He said this environment was harmful to the economy and society and fueled sharp share-price volatility. He added that market mispricing created buying opportunities for his fund.
Earlier this year, Pershing Square bought Microsoft during the “SaaS selloff,” Amazon when its shares fell after U.S. President Donald Trump introduced tariffs, and Alphabet amid sharp share-price swings following ChatGPT’s launch. Ackman warned of significant risks from daily leveraged products, perpetual futures and sports-betting-style trading, saying that investors who treat U.S. stocks as a way to get rich quickly could face disastrous consequences.
Ackman said he was particularly bullish on Visa and Mastercard, which he called two of the world’s best businesses. He also favored streaming platform Netflix and disclosed a Netflix holding in August.