- The video is a conversation with Bill Ackman, a legendary activist investor.
- Ackman discusses the key lesson he took away from the book "Intelligent Investor" by Benjamin Graham, which is understanding the difference between price and value in the stock market.
- He emphasizes the importance of value investing and finding businesses with a high degree of certainty about their future cash flows.
- Ackman gives an example of Universal Music Group as a non-disruptible business with a high degree of persistence, despite changes in the music industry.
- He also discusses the risks and transformations in the music industry, but believes in the company's ability to adapt and succeed.

- The speaker discusses the potential of having a Neuralink chip in the brain for accessing music
- They believe that AI will not be the primary creator of music, but rather a tool to make artists better
- The speaker also talks about their investment process, focusing on companies with long-term growth potential and strong barriers to entry
- They emphasize the importance of understanding a company's moat in the current disruptive business environment

- The speaker discusses the importance of finding businesses that are hard to disrupt as an investor
- They emphasize the success of investing in the restaurant business, particularly Chipotle, due to its simple business model and high-quality ingredients
- The discussion shifts to the moat of successful restaurants and the difficulty of replicating their systems and relationships with suppliers
- There is a brief mention of a preference for meat patties from fast-food restaurants for health reasons
- The conversation then transitions to a discussion about Alphabet (Google's parent company) and the potential for AI to impact its dominance in the online advertising and search market
- The speaker believes that Google's AI capabilities are underestimated and that the company is undervalued, with potential for growth and efficiency in its operations.

- AI has the potential to disrupt businesses and investing
- Understanding the incentives and track record of management is important for investing
- Warren Buffett's approach to investing, including long-term view and emotional detachment, is influential
- Financial security and understanding the businesses you invest in are key for withstanding market volatility
- Emotional resilience in investing can be developed over time through experience and learning from others' mistakes

- The speaker discusses the value of learning from historical mistakes in investing, particularly in relation to Warren Buffett's career.
- He advises against borrowing money to invest and emphasizes the importance of long-term thinking and financial security for everyday investors.
- The speaker recommends investing in a small number of companies that the investor understands well, rather than diversifying across a large number of companies or investing in mutual funds.
- He explains activist investing as a strategy of investing in struggling companies and working to improve their value, often by taking a more active role in the company's management.

- Bill Ackman discusses the early days of his activism in companies, using media attention and shareholder support to influence management teams
- He describes taking a board seat on a company, General Growth, and helping to improve its operations and financial restructuring
- Ackman believes that activist investors can restore the balance of power between shareholders and company management, leading to better performance in the stock market
- He also explains his decision to invest in General Growth during the financial crisis, seeing potential value in the company's assets despite its massive debt
- Ackman emphasizes the importance of long-term thinking and the role of activist investors in guiding companies towards sustainable growth
- He also highlights the skepticism towards short-term activist investors and the influence of long-term oriented ownership groups like index funds

- The speaker discusses how they made a successful investment in a bankrupt company by buying 25% of the company's stock in the open market.
- They were able to convince the board to restructure the company for the benefit of shareholders.
- The company emerged from bankruptcy and the shareholders kept the majority of their investment.
- The speaker learned about distressed investing and the legal aspects through reading and working with experienced lawyers.
- They also discussed the process of getting on the board of a company and running a proxy contest to become a director.

- Bill Ackman discusses key lessons from "Intelligent Investor" by Benjamin Graham, emphasizing the difference between price and value in the stock market.
- He highlights the importance of value investing and finding businesses with certainty about future cash flows, using Universal Music Group as an example.
- Ackman discusses the potential impact of AI on music creation and the importance of understanding a company's moat in a disruptive business environment.
- The conversation shifts to investing in successful restaurants and the potential for AI to disrupt businesses.
- Ackman shares insights on activist investing, including his early activism in General Growth during the financial crisis.
- He emphasizes the importance of long-term thinking, financial security, and learning from historical mistakes in investing.

- Boards of underperforming companies often do not want to admit their underperformance
- Shareholder activism has led to boards taking their responsibilities more seriously
- Shareholder activism can involve mudslinging and other aggressive tactics
- The speaker was involved in a dramatic battle for the board of Canadian Pacific
- The battle involved finding high-profile directors willing to step into the fight
- The speaker's approach to activism has been criticized for being too aggressive

- The speaker discusses their successful investment track record, with a few major losses, including a $4 billion loss in Valiant Pharmaceuticals
- They also talk about the importance of governance and board structure in companies, especially in venture-backed and private companies
- The speaker also shares personal struggles during the Valiant loss, including marital issues and lawsuits

- Bill Ackman faced financial and personal turmoil, including a messy divorce and a hostile takeover of his company by an activist investor
- He borrowed $300 million to prevent the takeover and protect his company
- He focused on his core investment principles and reconnected with his girlfriend, Neri Oxman, during this difficult time
- Ackman found solace in meditation, exercise, and making progress every day
- He ultimately overcame the challenges and appreciates the recovery process, likening it to the American story of resilience and success

- Bill Ackman discusses the risks of short selling in the stock market
- He shares his experience shorting the company Herbalife, which he believed to be a fraudulent pyramid scheme
- Ackman also recounts a legal battle with legendary investor Carl Icahn over a schmuck insurance agreement, ultimately winning and receiving $4.5 million plus interest

- Bill Ackman discusses his experience with investor Carl Icahn and their conflict over Herbalife
- Ackman believes Icahn's actions were personal and driven by financial gain
- Ackman lost money on Herbalife due to Icahn's actions
- Ackman's philanthropic work in Israel and support for Palestinian rights is also discussed

- The speaker discusses the indoctrination of hatred towards Jews and Israel in Palestinian education
- He emphasizes the importance of peace and prosperity for the Palestinian people
- He criticizes the lack of action by university presidents in response to protests calling for the genocide of Jewish people
- He highlights his efforts to address the situation at Harvard and his disappointment with the lack of response from university leadership
- He also criticizes the evasiveness and disrespect of university presidents during their testimony before Congress

- Shareholder activism has led to boards taking their responsibilities more seriously
- The speaker was involved in a dramatic battle for the board of Canadian Pacific
- The speaker's approach to activism has been criticized for being too aggressive
- Bill Ackman faced financial and personal turmoil, including a messy divorce and a hostile takeover of his company by an activist investor
- Ackman found solace in meditation, exercise, and making progress every day
- Bill Ackman discusses the risks of short selling in the stock market
- Ackman also recounts a legal battle with legendary investor Carl Icahn over a schmuck insurance agreement
- The speaker discusses the indoctrination of hatred towards Jews and Israel in Palestinian education
- He emphasizes the importance of peace and prosperity for the Palestinian people
- He criticizes the lack of action by university presidents in response to protests calling for the genocide of Jewish people

- The speaker criticizes the responses of university leaders to questions about free speech and genocide.
- They highlight the hypocrisy of universities claiming to support free speech while restricting certain viewpoints.
- The speaker also discusses their efforts to push for leadership changes at Harvard and the lack of action to address issues on campus.
- They argue that there is a deeper problem with the governance and culture of Harvard.

- The speaker discusses the lack of balance in the governance system of US corporations and Harvard University
- The speaker highlights the difficulty of challenging the DEI ideology on college campuses and the lack of diversity of viewpoints among faculty
- The speaker expresses concern about the impact of the DEI ideology on universities and the suppression of different perspectives
- The speaker has faced backlash for speaking out against the DEI ideology and other issues
- The speaker believes that universities are at risk due to the limitations on exposure to diverse ideas and viewpoints

- The speaker discusses the withdrawal of a statement by some university members
- They express concern about the lack of diverse viewpoints in elite institutions
- The discussion then shifts to the issue of plagiarism and the resignation of the president of Harvard
- The speaker also mentions the importance of selecting a diverse leader for the university

- Pressure for a more diverse candidate at Harvard due to disappointment in lack of racial diversity in the past
- Lack of due diligence in hiring President Gay
- Criticism of Harvard's board for not making their own decision in choosing a president
- Discussion of the importance and shortcomings of Harvard as an institution
- Personal admiration for Neri Oxman and her involvement in plagiarism allegations
- Response to plagiarism allegations against Neri Oxman and the decision to resign

- Neri Oxman's thesis was accused of plagiarism, leading to a viral article calling her a celebrity academic committing academic fraud
- Further investigation found instances of inadvertent plagiarism, such as copying definitions from Wikipedia and software manuals
- MIT's handbook distinguishes between inadvertent plagiarism and academic fraud, stating that honest errors are not considered plagiarism
- Business Insider published the article without fact-checking and accused Neri of academic fraud, leading to a potential lawsuit from Bill Ackman
- Neri and Bill maintain that Neri did not commit academic fraud, and the situation has sparked a conversation about the broken state of journalism

- Bill Ackman is conducting an investigation into Business Insider for defamation of his wife, Neri Oxman.
- He is considering legal action if Business Insider does not make corrections to their story.
- Business Insider's story accused Oxman of academic fraud, causing significant damage to her reputation.
- Ackman believes the media has the power to destroy people's reputations and is using his platform to fight back against false accusations.

- Criticism of university leaders' response to free speech and genocide questions
- Hypocrisy of universities claiming to support free speech while restricting certain viewpoints
- Efforts to push for leadership changes at Harvard and lack of action to address campus issues
- Deeper problem with governance and culture of Harvard
- Lack of balance in governance system of US corporations and Harvard University
- Difficulty of challenging DEI ideology on college campuses and lack of diversity of viewpoints among faculty
- Concern about impact of DEI ideology on universities and suppression of different perspectives
- Backlash for speaking out against DEI ideology and other issues
- Universities at risk due to limitations on exposure to diverse ideas and viewpoints
- Withdrawal of statement by some university members
- Lack of diverse viewpoints in elite institutions
- Issue of plagiarism and resignation of Harvard president
- Importance of selecting a diverse leader for the university
- Pressure for more diverse candidate at Harvard
- Lack of due diligence in hiring President Gay
- Criticism of Harvard's board for not making their own decision in choosing a president
- Importance and shortcomings of Harvard as an institution
- Admiration for Neri Oxman and her involvement in plagiarism allegations
- Response to plagiarism allegations against Neri Oxman and decision to resign
- Accusations of plagiarism against Neri Oxman and potential lawsuit from Bill Ackman
- MIT's distinction between inadvertent plagiarism and academic fraud
- Business Insider's article accusing Oxman of academic fraud and potential lawsuit from Bill Ackman
- Investigation into Business Insider for defamation of Neri Oxman
- Ackman's fight against false accusations and media's power to destroy reputations.

- The speaker discusses the power of media and the importance of platforms like Twitter for hearing multiple sides of an issue
- They express support for Trump's economic policies but criticize his lack of civility and handling of the January 6th riot
- The speaker advocates for a more appealing and less divisive presidential candidate in the future

- The speaker criticizes the party system and the lack of good candidates
- He supports Dean Phillips for the 2024 US presidential race
- He believes Biden should step aside due to his age and lack of leadership
- He discusses the future of the financial world and the role of technology in improving the world

- The speaker believes that AI will bring productivity and positive advancements
- They express optimism for the future of their business and investments
- They are excited about a company working to create products that benefit the environment
- They predict the end of the war in the Middle East and hope for positive changes in universities
- The conversation ends with a quote about the importance of money in a wise person's life

The speaker discusses the power of media and the importance of platforms like Twitter for hearing multiple sides of an issue. They support Trump's economic policies but criticize his lack of civility and handling of the January 6th riot. The speaker advocates for a more appealing and less divisive presidential candidate in the future, criticizes the party system, and supports Dean Phillips for the 2024 US presidential race. They believe Biden should step aside due to his age and lack of leadership. The speaker also discusses the future of the financial world, the role of technology, and expresses optimism for their business and investments. They predict the end of the war in the Middle East and hope for positive changes in universities. The conversation ends with a quote about the importance of money in a wise person's life."""

Bill Ackman is an investor who has led some of the biggest and controversial financial trades in history. He is founder and CEO of Pershing Square Capital Management. Please support this podcast by checking out our sponsors:
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TRANSCRIPT:
https://lexfridman.com/bill-ackman-transcript

EPISODE LINKS:
Bill's X: https://twitter.com/BillAckman
Pershing Square Holdings: https://pershingsquareholdings.com/
Pershing Square Foundation: https://pershingsquarefoundation.org
Neri Oxman conversation: https://www.youtube.com/watch?v=XbPHojL_61U
Books mentioned:
The Intelligent Investor: https://amzn.to/3ONnaZy
America's Cultural Revolution: https://amzn.to/3SDz1dY

PODCAST INFO:
Podcast website: https://lexfridman.com/podcast
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Full episodes playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOdP_8GztsuKi9nrraNbKKp4
Clips playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOeciFP3CBCIEElOJeitOr41

OUTLINE:
0:00 - Introduction
0:47 - Investing basics
5:39 - Investing in music
14:00 - Process of researching companies
18:39 - Investing in restaurants
24:08 - Investing in Google
29:50 - AI
35:05 - Warren Buffet
37:14 - Psychology of investing
46:45 - Activist investing
56:33 - General Growth Properties
1:12:49 - Canadian Pacific Railway
1:20:13 - OpenAI
1:24:24 - Biggest loss and lowest point
1:39:13 - Herbalife and Carl Icahn
1:56:03 - Oct 7
2:02:34 - College campus protests
2:21:01 - DEI in universities
2:41:52 - Neri Oxman
3:07:22 - X and free speech
3:11:46 - Trump
3:19:22 - Dean Phillips
3:26:28 - Future

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The only person who can cause you more harm than a thief with a dagger is a journalist with a pen.

The following is a conversation with Bill Ackman, a legendary activist investor who has been part of some of the biggest and at times controversial trades in history.

Also, he is fearlessly vocal on X, FKA Twitter, and uses the platform to fight for ideas he believes in.

For example, he was a central figure in the resignation of the president of Harvard University, Claude Dean Gay, the saga of which we discuss in this episode.

To support it, please check out our sponsors in the description.

And now, dear friends, here's Bill Ackman.

In your lecture on the basics of finance and investing, you mentioned a book, Intelligent Investor by Benjamin Graham as being formative in your life.

What key lesson do you take away from that book that informs your own investing?

Actually, it was the first investment book I read and as such, it was the inspiration for my career and a lot of my life.

Bear in mind, this is after the Great Depression, people lost confidence investing in markets, World War II, and then he writes this book, it's for like the average man.

And basically he says that you have to understand the difference between price and value, right?

Price is what you pay, value is what you get.

And he said the stock market is here to serve you, right?

And it's a bit like the neighbor that comes by every day and makes you an offer for your house.

Makes you a great offer, you can take it.

And the key is to figure out what something's worth and you have to kind of weigh it.

He talked about the difference between...

He said the stock market in the short term is a voting machine.

It represents speculative interests, supply and demand of people in the short term.

But in the long term, the stock market's a weighing machine.

It's going to tell you what something's worth.

And so if you can divine what something's worth, then you can really take advantage of the market because it's really here to help you.

And that's kind of the message of the book.

In that same way, there's a kind of difference between speculation and investing.

Speculation is just a bit like buying, trading crypto, right?

Maybe in the long run there's intrinsic value.

Many investors in a bubble going into the crash were really just pure speculators.

They didn't know what things were worth, they just knew they were going up.

Investing is doing your homework, digging down, understanding a business, understanding the competitive dynamics of an industry, understanding what management's going to do, understanding what price you're going to pay.

You know, the value of anything, I would say, other than love, let's say, is the present value of the cash you can take out of it over its life.

Now some people think about love that way, but it's not the right way to think about love.

But it's, yeah, so Investing is about basically building a model of what this business is gonna produce over its lifetime.

Even like philosophically, value of anything really, but we can just talk about the things that are on the stock market.

The value of a security is the present value of the cash you can take out of it over its life.

So if you think about a bond, a bond pays a 5% coupon interest rate, you get that let's say every year or twice a year, split in half.

If it's a US government bond, you know you're going to get it.

And a business, a profitable 1, is like a bond in that it generates these coupons or these earnings or cash flow every year.

The difference with a stock and a bond is that The bond, it's a contract.

You know what you're gonna get as long as they don't go bankrupt and default.

With a stock, you have to make predictions about the business.

How many widgets are you gonna sell this year?

How much of the money that they generate do they need to reinvest in the business to keep the business going.

But, you know, what we do is we try to find businesses where with a very high degree of confidence, we know what those cash flows are going to be for a very long time.

And there are very few businesses that you can have a really high degree of certainty about.

As a result, you know, many investments are speculations because it's really very difficult to predict the future.

So we, what we do for a living, what I do for a living, is find those rare companies that you can kind of predict what they're going to look like over a very long period of time.

So what are the factors that indicate that a company is something, is going to be something that's going to make a lot of money, it's gonna have a lot of value, and it's going to be reliable over a long period of time?

And what is your process of figuring out whether a company is or isn't that?

So every consumer has a view on different brands and different companies.

And what we look for are sort of these non-disruptible businesses, A business where you can kind of close your eyes, stock market shuts for a decade, and you know that 10 years from now, it's going to be a more valuable, more profitable company.

So we own a business called Universal Music Group.

It's in the business of helping artists become global artists, sort of the recorded music business.

And it's in the business of owning rights to sort of the music publishing rights of songwriters.

Music is a many thousand year old part of the human experience.

And I think it will be you know thousands of years from now and so that's a pretty good backdrop to invest in a company and the company basically owns a third of the global recorded music that's you know the most dominant sort of market share in the business.

They're the best at taking an artist who's 18 years old, who's got a great voice and has started to get a presence on YouTube and Instagram and helping that artist become a superstar.

And that's a unique talent, and the result is the best artists in the world wanna come work for them.

But they also have this incredible library of, you know, the Beatles, the Rolling Stones, U2, et cetera.

So, and then if you think about, what music has become used to be about records and CDs and, you know, 8 track tapes for those of whom, and it was about a new format and that's how they drive sales.

And it's become a business, which is like the podcast business about streaming.

And you can, streaming is a lot more predictable than selling records, right?

You can sort of say, okay, how many people have smartphones?

How many people are going to have smartphones next year?

There's a kind of global penetration over time of smartphones.

You pay, call it 10, 11 bucks a month for a subscription or less for a family plan.

And you can kind of build a model of what the world looks like and predict the growth of the streaming business, predict what kind of market share Universal is going to have over time.

And you can't get to a precise view of value, you can get to an approximation.

And the key is to buy at a price that represents a big discount to that approximation.

Ben Graham was about what he called, he invented this concept of margin of safety, right?

You want to buy a company at a price that if you're wrong about what you think it's worth and it turns out to be worth 30% less, you paid a deep enough discount to your estimate that you're still okay.

It's about investing, A big part of investing is not losing money.

If you can avoid losing money and then have a few great hits, you can do very, very well over time.

Well, music is interesting because yes, music's been around for a very long time, but the way to make money from music has been evolving.

Like you mentioned streaming, there's a big transition initiated by I guess Napster, then created Spotify, of how you make money on music with Apple and with all of this.

And the question is how well are companies like UMG able to adjust to such transformations?

1, I could ask you about the future, which is artificial intelligence being able to generate music, for example.

There have been a lot of amazing advancements with, So do you have to also think about that?

Like when you close your eyes, all the things you think about, are you imagining the possible ways that the the future is completely different from the present and how well this company will be able to like surf the wave of that?

Sure, And they've had to surf a lot of waves.

And actually the music business peaked the last time in like the late 90s or 2000 timeframe.

And then really innovation, Napster, digitization of music almost killed the industry.

And Universal really led an effort to save the industry and actually made an early deal with Spotify that enabled, you know, the industry to really recover.

And so by virtue of their market position and their credibility and their willingness to kind of adopt new technologies, they've kept their position.

Now, they of course had this huge advantage because I think the Beatles are forever.

So they had a nice base of assets that were important and I think will forever be.

There are all kinds of risks in every business.

This is 1 that I think has a very high degree of persistence.

And I can't envision a world where, beyond streaming, in a sense.

Now you may have a Neuralink chip in your head, that instead of a phone, but the music can come in a digitized you know kind of format you're gonna want to have an infinite library that you can walk around in your pocket or in your brain it's not going to matter that much at the form factor you know the device changes It's not really that important whether it's Spotify or Apple or Amazon that are the so-called DSPs or the providers.

I think the values really kind of reside in the content owners and that's really the artists and the label.

And I actually think AI is not going to be the primary creator of music.

I think we're going to actually face the reality that it's not that music has been around for thousands of years, but musicians and music has been around.

Like we actually care to know who's the musician that created it.

Just like we wanna know who's the artist, human artist that created a piece of art.

And I think If you think about it, there's lots of other technologies and computers that have been used to generate music over time.

But no 1 falls in love with a computer-generated track, right?

And Taylor Swift, incredible music, but it's also about the artist and her story and her physical presence and you know, the The live experience.

I don't think you're gonna sit there And someone's gonna put computer up on stage and and then and it's gonna play and people are gonna get excited around it So I think AI is really going to be a tool to make artists better artists.

And, you know, I think like a synthesizer, right, really created the opportunity for, you know, 1 man to have an orchestra.

Maybe a bit of a threat to a percussionist, but maybe not, maybe it drove even more demand for the live experience.

Unless that computer has human-like sentience, which I believe is a real possibility, but then it's really from a business perspective no different than a human.

If it has an identity, that's basically fame and influence, and there'd be a robot Taylor Swift, and it doesn't really matter.

It's a copywritable asset, I would think.

The world is not gonna ask your permission to become what it's becoming, so.

Presumably there'd be a capital system and there'd be some laws under which I believe AI systems will have rights that are akin to human rights.

And we're gonna have to contend with what that means.

Well, there's sort of name and likeness rights.

Now, can a name be attributed to a Tesla robot?

Okay, so there's more potential artists for us to represent at university.

Another example could be just, you know, the restaurant industry, right?

If you can look at businesses like a McDonald's, right?

It's a, whatever the company's like a 1950 vintage business and here we are, it's, you know, 75 years later and you can kind of predict what it's going to look like over time.

And the menu is going to adjust over time to consumer tastes and, but I think the hamburger and fries is probably forever.

The Beatles, the Rolling Stones, the hamburger and fries are forever.

I was eating at Chipotle last night as I was preparing these notes.

And yeah, it is 1 of my favorite places to eat.

You said it is a place that you eat, you obviously also invest in it.

I like the burrito, but I generally try to order the bowl, cut the carb apart.

And I'm more of a steak guy, just putting that on the record.

What's the actual process you go through?

Like literally, like the process of figuring out what the value of a company is.

So Chipotle, what attracted us initially is the stock price dropped by about 50%.

Healthy, sustainable, fresh food made in front of your eyes.

And, you know, great, Steve Ells, the founder, did an amazing job.

But ultimately, the company's lacking some of the systems and had a food safety issue.

Consumers got sick, almost killed the rent.

But the reality of the fast food quick service industry is almost every fast food company has had a food safety issue over time, and the vast majority have survived.

And we said, look, such a great concept, but their approach was far from ideal.

But we start with usually reading the SEC filing.

So companies file a 10K or an annual report, they file these quarterly reports called 10Qs.

They have a proxy statement which describes kind of the governance, the board structure.

Conference call transcripts are publicly available.

It's kind of very helpful to go back 5 years and kind of learn the story.

You know, here's how management describes their business.

Here's what they say they're going to do.

And then you can follow along to see what they do.

It's like a historical record of, you know, of how competent and truthful they are.

And then of course, looking at competitors and thinking about what could dislodge this company.

And then we'll talk to, if it's an industry we don't know well, we know the restaurant industry really well, music industry, we'll talk to people in the industry.

We'll try to understand, you know, the difference between publishing and recorded music.

You know, I read a book about the music industry or a couple of books about the industry.

So it's a bit like a big research project.

And these so-called expert networks now, and you can get pretty much anyone on the phone and they'll talk to you about an aspect of the industry that you don't understand and wanna learn more about.

Try to get a sense, you know, public filings of companies generally give you a lot of information, but not everything you wanna know.

And you can learn more by talking to experts about some of the industry dynamics, the personalities.

If a CEO were to do a podcast or a YouTube interview, you get a sense of the people.

So in the case of Chipotle, for example, by the way, I could talk about Chipotle all day.

Don't make promises you can't keep, Bill.

He's not gonna spend 1 dollar that he doesn't think is the company's best interest.

All right, all I want is free Chipotle, Come on now.

Oh, and so you look at a company like Chipotle and then you see there's a difficult moment in its history, like you said, that there was a food safety issue and then you say, okay, well, I see a path where we can fix this and therefore, even though the price is low, we can get it to where the price goes up to its value.

So the kind of business we're looking for is sort of the kind of business everyone should be looking for, right?

A great business, it's got a long-term trajectory of growth out into the force, even beyond the foreseeable distance.

Those are the kind of businesses you want to own.

You want businesses that generate a lot of cash.

You want businesses you can easily understand.

You want businesses with these sort of huge barriers to entry where it's difficult for others to compete.

You want companies that don't have to constantly raise capital.

And these are some of the great business of the world, but people have figured out that those are the great businesses.

So the problem is those companies tend to have very high stock prices and the value is generally built into the price you have to pay for the business.

So we can't earn the kind of returns we want to earn for investors by paying a really high price.

You can buy the best business in the world and if you overpay, you're not going to earn particularly attractive returns.

So We get involved in cases where a great business has made a big mistake or you've a company that's lost its way, but it's recoverable.

We buy from shareholders who are disappointed, who've lost confidence, selling at a low price relative to what it's worth, if fixed, and then we try to be helpful in fixing the company.

You said that barriers to entry, you said a lot of really interesting qualities of companies very quickly in a sequence of statements that took like less than 10 seconds to say, but some of them were fascinating, all of them were fascinating.

How do you know if there's a type of moat protecting the competitors from stepping up to the plate.

The most difficult analysis to do as an investor is that.

It's kind of figuring out how wide is the moat, how much at risk is the business to disruption.

And we're in, I would say, a period, the greatest period of disruptability in history, right?

Technology, you know, a couple of 19 year olds can, you know, leave whatever university or maybe they didn't even go in the first place.

They can raise, you know, millions of dollars.

They can get access to infinite bandwidth storage.

They can contract with engineers in low-cost markets around the world.

They can build a virtual company and they can disrupt businesses that seem super established over time.

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Bill Ackman: Investing, Financial Battles, Harvard, DEI, X & Free Speech | Lex Fridman Podcast #413