With the surge in coronavirus cases across the country, Bill Ackman once again placed a bet on the credit market.
The billionaire investor said that he has purchased $8 million worth of insurance, which will be paid off if the company starts to default on debts as it did when the virus shut down the economy in the spring.
The stakes are almost the same as his famous hedging in late March, although only 30% of his. In that hedge, he purchased $27 million in credit default swaps, which brought him a staggering $2.6 billion in profits.
“I hope we lose money in the next hedge,” Ackerman said at the Financial Times meeting on Tuesday. “We are usually in a dangerous period. The fascinating thing is that the same bet we made eight months ago can be obtained under the same conditions that there has never been a fire, and it is possible that the world will become very good.”
Ackman said he conducted a new hedge on the day Pfizer announced its new, promising new COVID-19 vaccine. Pfizer’s statement is “actually bearish,” Ackerman said, predicting that it will prompt Americans to feel complacent about wearing masks and spread the deadly virus more widely.
When Ackman made a profit on March 23, it had just received more than 10,000 new COVID-19 cases nationwide. On Tuesday, there were only 140,000 new cases, and the dizzying number aroused concerns about the second lockdown.
Although he believes there will be risks in the short term, Ackerman predicts a “strong recovery” in 2021.
Ackerman’s trading in the spring greatly promoted the development of his hedge fund. In recent years, the performance of hedge funds has been unstable. His fund fell 7% before the pandemic, which turned the windfall of credit swaps into new stock bets, and has risen 44% this year.
At the same time, Ackman sits on a $5 billion blank check company that he used to attract large game acquisitions such as Airbnb and Bloomberg LP.
Another factor in Ackerman’s first trade was Ackerman himself.
The lerzi in the company’s cage was fiercely criticized in March for its role in the news cycle before the shutdown. On March 18, Ackman tweeted to President Trump, suggesting that he implement an “extended spring break” nationwide to combat the coronavirus.
Later that day, an emotional Ackman called CNBC and warned that “hell is coming”.
“Before the production, distribution and injection of vaccines, we will go through the country’s Great Depression,” Ackerman persuaded. “Millions of people will die globally, and as many as 1 million will die from mathematics.”