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Bill Ackman is an activist, value investor with a knack for in-depth research to uncover asymmetric risk-reward bets and putting the thesis in public domain. I have personally tracked Ackman's investments for about 7-8 years. I have walked away from his investments in mediocre or even bad businesses (commodity businesses-JC Penney, Target or businesses with secular headwinds as in Borders), and of course risky short bet on Herbalife. However, I followed closely his GGP thesis (although I never got the balls to bet heavily), HKD thesis. Please note, Bill Ackman does make bold comments in the public and some have been famously wrong including his JCP thesis. So as an investor one needs to do his/her own due diligence to be comfortable with the thesis or investment. In the case of GSE, it is my belief that everything rests on how the court case on Aug 2012 amendment goes.
Bill Ackman on GSE shares -> Link
Mr. Ackman predicted the Supreme Court would side with the plaintiffs if the suit reaches the court. He said the common shares upon a legal victory would then be worth about 10 to 15 times their current value, according to the people who were there.Mr. Ackman also said that despite various legislative proposals in Congress that would create new mortgage guarantors, he believed Fannie and Freddie would escape liquidation and instead be revamped, perhaps with increased capital requirements and other protections.Mr. Ackman made his comments at the annual meeting of Entrust Capital, a New York firm that invests billions of client money in hedge funds. The event was closed to the press.
- Is this somewhat of a parallel for his GSE investment ?
All the above paved the way for consensual loan modifications in lieu of piece meal liquidation of properties.
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