SPDR S&P 500 ETF (ETF: SPY), (DJIA) – Bill Ackman is starting to get optimistic


Less than a month after a polarizing CNBC interview, hedge fund billionaire Bill Ackman is starting to think differently about the short-term future of the market and the coronavirus pandemic (COVID-19).

“I’m starting to get optimistic,” Ackman said in a series of tweets Sunday afternoon. “The cases seem to peak in New York. Almost the whole country is stopped. Hydroxychloriquin and antibiotics seem to help. There is growing evidence that the asymptomatic infection rate may be up to 50 times higher than expected.

“If this is true, the severity and mortality rate could be much lower than expected, and we could be closer to collective immunity than expected. “

Ackman cited the fact that healthcare facilities nationwide are doing everything they can to control the spread of the coronavirus: “We could imagine a world in the coming months where everyone is tested and everything except the compromised immune system returns to a more socially distant but more normal life environment, “he said in another tweet.

See also: Bill Ackman bet on the market plunge, transformed $ 27 million into $ 2.6 billion

Change of heart

On March 18, the founder of Pershing Square Capital told CNBC that at the rate that the coronavirus is spreading, the American economy will enter a “period of depression”.

In February, Ackman’s Pershing Square funds purchased credit default swaps (CDS) on various high-quality, high-yield credit default swap indexes. Pershing Square completed Ackman’s wagering against the market on March 23 and generated $ 2.6 billion compared to premiums paid and commissions totaling $ 27 million.

The S&P 500 started the second quarter on a low note last week as investors still don’t know how long the economic downturn will last. Futures were trading slightly higher at the time of publication on Sunday evening.

“Massive stimulus packages are being injected around the world to fill the economy and help us get through the crisis,” Ackman said in another tweet on Sunday. “Most businesses, banks and consumers have entered the reasonably well-capitalized crisis. The rates are extremely low. There is no real estate or commercial overhang.

“While it is difficult to be positive when we know that tens of thousands more will die and many more will become seriously ill, I have no choice but to be more optimistic about the intermediate future based on the data and facts I have seen recently. I hope I’m right. ‘

See also: 2008 Playbook suggests the current period is calm before the stock storm

Image source: CNBC appearance

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