Bill Ackman Shorting 30-Year Treasuries for Big Yields

Bill Ackman, a well-known hedge fund manager, is taking a bold bet by shorting 30-year treasuries in search of big yields.

He believes that the current yield on 30-year treasuries is too high to ignore, and that the market will eventually correct itself, allowing him to profit from the short position.

Bill Ackman's US Treasury Bet was a bold move that paid off. He shorted 30-year Treasury bonds in August, a move that netted his fund a profit of about $200 million.

Ackman used options to make the bet, which cost him $100 million in premiums to maintain. He predicted that the Treasury yield, which moves in the opposite direction of prices, could rise to 5.5%.

His tweets triggered a recovery in Treasury prices, after an earlier sell-off had pushed yields to 16-year highs. The yield on the 30-year Treasuries was around 4.16% when he announced his bet against them.

Ackman has become known for making hedges to protect the portfolio that end up becoming lucrative, as seen in his $2.6 billion windfall in 2020.

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Bill Ackman shorted 30-year Treasury bonds in August, a move that netted his fund a profit of about $200 million.

The yield on the 30-year Treasuries was around 4.16% when he announced his bet against them, but he predicted it could rise to 5.5%.

Ackman made the bet using options, which cost him some $100 million in premiums to maintain his position.

He made about $300 million from his moves in the market, meaning Pershing Square's $13 billion flagship fund is in for a $200 million windfall.

The Federal Reserve would need to keep interest rates higher for longer to keep long-term Treasury yields higher for longer periods of time, which is unlikely if the US economy heads closer to a recession.

Ackman's tweets triggered a recovery in Treasury prices after an earlier sell-off had pushed yields to 16-year highs.

The US economy has avoided a downturn, and even the Fed has said it's no longer predicting the economy will slip into a recession by the end of the year.

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Bill Ackman said he covered his short bet on US Treasuries.

The billionaire investor noted there is too much risk in the world to remain short bonds at current long-term rates.

Yields on 30-year Treasuries fell about 5 basis points to 5.03% Monday, after earlier surging as much as 10 basis points to about 5.18%, the highest since 2007.

Ackman was bearish 30-year Treasuries via options in early August, both as a hedge for his equity investments and as a standalone wager.

The economy is slowing faster than recent data suggests, according to Ackman.

He wouldn't be shocked to see 30-year rates well through the 5% level, as he said in late September.

Ackman's view is that you're not being paid enough to enter into a 30-year contract with the U.S. government at a fixed price.

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Bill Ackman, a well-known hedge fund manager, has a clear investment strategy that he follows when taking a short position. He focuses on companies with high short interest and a history of poor performance.

Ackman's strategy involves identifying companies with strong fundamentals but a flawed business model. He uses this approach to determine which companies are most likely to experience a decline in stock price.

Ackman's investment strategy is not just about picking stocks, but also about understanding the underlying business and its potential for growth. He has a deep understanding of the companies he invests in, which helps him make informed decisions.

Ackman's approach to short selling is to identify companies with a high short interest ratio, which indicates that many investors are betting against the stock.

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Bill Ackman's investment decisions have been a subject of interest for many. He has a reputation for taking bold bets, as seen in his $1 billion short bet against Herbalife.

Ackman's investment strategy is centered around activist investing, where he takes a significant stake in a company and pushes for changes from the inside. He has been successful in this approach, as evident in his 2010 investment in Canadian Pacific Railway, where he made a 62% return.

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Ackman has also made headlines for his short positions, including his 2012 short bet against J.C. Penney, which lost him $440 million. His investment decisions are often guided by a deep understanding of the companies he invests in, as he has a team of analysts and researchers who help him identify potential opportunities.

Ackman's investment decisions are not without controversy, however. His short bet against Herbalife, which he believed was a pyramid scheme, led to a heated battle with the company's CEO. Despite the controversy, Ackman remains committed to his investment strategy, which has yielded significant returns for his fund.

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