Introduction

> One of my main takeaways from our discussion is the importance of being vocal and standing up for what you believe in, especially in a public forum. "Using platforms like X can be a powerful way to fight for ideas and call out issues that need attention." This approach has been instrumental in some key moments, such as influencing significant changes at institutions like Harvard University.

> Another critical highlight is the incredible impact of journalism, for better or worse. "The only person who can cause you more harm than a thief with a dagger is a journalist with a pen." This underscores the power and responsibility that comes with media influence, which can shape public perception and impact lives drastically.

Investing basics

> The essence of value investing lies in understanding the crucial distinction between price and value. “Price is what you pay, value is what you get.” It’s about seeing the market as a mechanism that serves us, allowing us to sift through the noise of day-to-day fluctuations to uncover what truly matters—the sustainable cash flows a quality business generates over time.

> Identifying reliable companies means focusing on “non-disruptible businesses” that you can trust to be more valuable a decade from now, regardless of market turmoil. It’s essential to dig deep into the fundamentals, understand the competitive dynamics, and make informed predictions about the future. Investing is as much an art as it is a science, rooted in a disciplined approach to evaluating potential.

Investing in music

> Investing in Universal Music Group highlights the enduring value of music. With a rich catalog featuring legends like The Beatles and U2, and an ability to turn unknown talents into global superstars, UMG has showcased resilience and adaptability as the industry evolved from physical sales to streaming. In investing, it’s critical to buy at a price with a margin of safety - a concept from Ben Graham - ensuring one avoids loss while aiming for significant gains over time.

> On the future and AI, I believe that while AI might aid in enhancing music, it won’t replace the core appeal of human-created art. Music is not just sound; it's about the artist's story and their personal connection with the audience. AI will be more of a tool, much like the synthesizer, enhancing the creative abilities of musicians rather than replacing them. The human element of music creation holds irreplaceable value.

Process of researching companies

> One key aspect of our process is starting with thorough research, especially through SEC filings and company reports. This historical record helps us evaluate management's competence and truthfulness over time.

> We target companies with strong fundamentals - generating cash, easy to understand, with barriers to entry - but prefer to buy at a low price due to a mistake or temporary setback, aiming to help the company recover and create value for investors.

Investing in restaurants

> The challenge for investors today is assessing how "wide is the moat" of a business given the immense disruptive potential from new technologies and savvy entrepreneurs. In the restaurant industry, consistent success requires robust systems and brand strength, as exemplified by Chipotle's high-quality, sustainably sourced ingredients and effective scaling strategies, which create a strong moat that is difficult to replicate.

> Despite the criticism, fast food can align with health goals, and I personally find that eating just the patties, like those from Burger King or McDonald's, makes me feel great. It's affordable, nutrient-dense, and convenient, especially for someone like me who often travels and needs a reliable and healthy food source on the go.

Investing in Google

> Google, or Alphabet, caught my attention due to their AI capabilities. Despite initial setbacks like the Bard demonstration, I believe their AI investment and data advantage position them well for the future. The market may have overreacted, undervaluing Google relative to its potential and current earnings. Google's dominance in online advertising, combined with its efficient operation and lack of debt, make it a compelling investment opportunity.

> I find Google's potential to be underestimated, especially in terms of its AI capabilities. Despite initial setbacks, Google's vast data advantage, financial resources, and cautious approach could position them ahead of competitors like Microsoft in AI. The market may not fully appreciate Google's strengths, undervaluing the company relative to its earnings and growth potential. Google's efficiency, dominant position in online advertising, and lack of debt make it an attractive and undervalued investment choice among tech giants.

AI

> AI is an ultimate disruptor in business, making the landscape treacherous for investment. It’s like Buffett’s castle with a moat; even giants like Google can be disrupted, seen with the advent of Chat GPT. The core challenge is whether companies can leverage AI to protect and boost their profitability while adapting to rapid changes.

> For analyzing companies, management quality and incentives are crucial. By reviewing a decade’s worth of management statements and actions, one can gauge their true intentions and effectiveness. A great leader can transform a company by building a strong team and creating a culture that attracts and retains talent, exemplified by the turnaround at Chipotle under Brian Nichol.

Warren Buffet

> One key insight I shared with Lex was about the importance of a long-term view in investing, inspired by Warren Buffett. As I mentioned, “he still added at '93,” highlighting the power of duration and patience in the markets.

> Another point I emphasized was the need for an emotionally rational approach in investing, something I learned from Buffett’s teachings on temperament. Investing requires a dispassionate perspective, where one goes against the crowd and stays economically rational, especially when others are overreacting to market movements.

Psychology of investing

> Maintaining a calm investing demeanor is about financial security and deep understanding of investments: "A key success factor is you wanna have enough money in the bank... And then also doing your homework... If you know what a business is worth and you understand the management... it doesn't bother you when a stock price goes down."

> Personal qualities and experience shape how one responds to volatility: "I'm a pretty emotional person... But not in investing. I'm remarkably immune to kind of volatility... it took some time for me to develop that... just being emotional, do you want to respond to volatility?"

Activist investing

> Activist investing involves deeply engaging with companies to enhance their value. It's about moving beyond passive investing to actively influence businesses. By closely knowing the companies we invest in, we aim to make tangible improvements and drive their success.

> Through activism, we work with management to unlock value, whether by strategic recommendations or board representation. Over the years, our approach has evolved from classic activism to becoming an engaged owner. This shift has allowed for a more collaborative and democratic relationship between shareholders and company leadership.

> Having influential investors guiding company direction can beneficially balance short-term demands with long-term strategic growth. It's crucial for CEOs to have room for visionary decisions, even if they may initially impact short-term earnings. The involvement of respected major shareholders can provide crucial support for sustainable business development.

General Growth Properties

> One of the most significant moments in my career was the General Growth investment during the 2008 financial crisis. Everyone thought the company was doomed with its stock plummeting from $63 to 34 cents due to aggressive borrowing and market panic. However, by focusing on the true value of its assets versus liabilities and maneuvering through the bankruptcy code, we were able to restructure the company and turn it into one of the best investments we ever made, from 34 cents to $31 a share.

> The journey of learning the intricacies of distressed and bankruptcy investing was eye-opening. Before diving into General Growth, I educated myself by reading up on distressed investing and leveraging relationships with top-notch lawyers. This team and knowledge helped me see beyond the traditional viewpoints and understand that sometimes not being an expert allows you to approach situations with fresh, unconventional wisdom.

> Activist investing often gets a bad rap, but it can genuinely drive positive changes in companies. Getting onto the board usually means facing resistance, as people fear admitting underperformance. However, bringing diverse perspectives to the board often leads to better outcomes. Even when contested, once on the board, these interactions usually result in effective cooperation and valuable improvements, ultimately benefiting employees, shareholders, and the overall company health.

Canadian Pacific Railway

> The Canadian Pacific proxy contest was a transformative experience that underscored the importance of taking bold action in the face of mismanagement. We took a stand against what was "by far the worst run railroad in North America" and brought in Hunter Harrison, the "greatest railroader ever," only to face resistance from an honorary board made up of Canadian icons. That refusal forced our hand and led to a dramatic showdown that ultimately resulted in a 99% vote in our favor, solidifying our belief that when you challenge the status quo with a strong plan, you can drive significant change.

> Reflecting on our investment approach, I recognize the challenges of a "scorched earth" strategy that sometimes draws criticism, but the reality is that our team has a very high batting average. Despite some painful failures, the success stories—like Canadian Pacific—demonstrate that if you stay the course with us, you can achieve exceptional returns over time. Our track record is public, and while the media may focus on our setbacks, the truth is that we've delivered solid gains for our investors time and again.

OpenAI

> One key insight from the interview was about the importance of governance structures in organizations. Ackman highlighted the challenges faced by Open AI due to its nonprofit setup, stating, "It taught me for-profit solutions to problems are much better than nonprofits." He emphasized the need for boards of directors to provide shareholders with input on governance structures.

> Another key point raised by Ackman was the difference between private venture-backed boards and public company boards. He pointed out that private venture-backed boards are often dominated by venture capital investors who may prioritize their reputation over challenging management, potentially leading to suboptimal decisions. Ackman stressed the importance of having independent directors who are solely focused on the success of the company without other conflicting incentives.

Biggest loss and lowest point

> The biggest loss in my career was with Vion Pharmaceuticals, a company that didn't align with our core principles. The pharmaceutical industry is volatile and complex, and this investment led to a $4 billion loss, a moment that catalyzed further challenges.

> Facing reputation attacks following the Valiant failure, including shorts on our holdings, was a terrifying experience. Amid personal struggles like a divorce and lawsuits, borrowing money to consolidate control, refocusing on core principles, and finding love were turning points that led to our firm's best years.

> During the toughest times, from living alone in a small apartment to dealing with litigation and personal challenges, I found solace in meditation, exercise, and focusing on making incremental progress daily. The experience, though difficult, taught me the power of resilience, support from loved ones, and the value of appreciating success after overcoming adversity.

Herbalife and Carl Icahn

> Short selling is an inherently risky game, and I avoid it due to its unpredictable nature. My experience with Herbalife was a stark reminder of this, as I thought, "Okay, shorting a pyramid scheme seems like one, we'll make a bunch of money, but two, the world will be behind us because they're harming poor people."

> The Herbalife saga taught me that personal motivations can intertwine with financial decisions, exemplified by Carl Icahn's involvement, which was "kind of a brilliant opportunity for him.” It was a clash where I quickly learned that emotions and competition could drive irrational decisions.

> I have no regrets about telling Icahn "fuck you" during our conflict. Every choice, good or bad, has shaped who I am today, and I believe that “if you're happy with who you are, where you are in life, every decision you've made...got you to precisely where you are.”

Oct 7

> The recent October 7th attacks by Hamas on Israel were deeply tragic and served as a stark reminder of the barbarism that still exists in our world. My support for Israel is firm, but I also recognize the humanity of Palestinians, who deserve the same fundamental rights to peace and prosperity. The issue is not with Palestinian people, but with Hamas, whose control over Gaza has perpetuated violence and hatred.

> I firmly believe in the potential for a future where peace and prosperity can be achieved in the Middle East. This would require significant changes in governance, possibly overseen by a consortium of Gulf States, to ensure resources are used for development rather than destruction. The comparison to Dubai's transformation shows that with proper leadership, regions like Gaza could become thriving, peaceful communities.

College campus protests

> The handling of protests on campuses reveals a disturbing disconnect in leadership, particularly at Harvard, where the administration failed to condemn antisemitism. As I observed during my time on campus, many students were left feeling like, “Why is the president doing nothing? Why is the administration doing nothing?” This indifference created an unsafe environment for Jewish students.

> The hypocrisy surrounding free speech is staggering; while Harvard claims to be a free speech absolutist, it actually stifles dissenting conservative viewpoints and applies its policies inconsistently. The moment when university presidents testified, stating that calls for genocide against Jews might not violate their rules, exemplified this contradiction and left many of us baffled.

> I believe the governance structure at Harvard is fundamentally flawed, lacking accountability and responsiveness. The board is effectively self-perpetuating, making it difficult for any real change to happen. This governance failure is at the core of the issues we see today, both in how leadership is held to account and in how students are treated amidst escalating tensions on campus.

DEI in universities

> - The wake-up call was when student organizations blamed Israel for Hamas' actions without considering both perspectives, leading to a questioning of the DEI ideology on campus.

> - Ackman found Christopher Rufo's book on the origins of DEI and critical race theory eye-opening, highlighting how the movement aims to infiltrate universities, government, and corporations to reshape society.

> - Ackman received overwhelming support for speaking out against the DEI ideology, facing accusations of racism and challenges from the progressive establishment, including recent articles criticizing him.

> - Ackman sees a need for diverse viewpoints in universities' leadership and governance structures to prevent one-sided teachings, citing the importance of institutions like Harvard in shaping future generations and society.

Neri Oxman

> Neri Oxman is the most caring, warm, considerate, thoughtful person I've ever met, coupled with brilliance, creativity, and elegance. She's truly remarkable in every sense, both as a person and in her work.

> The accusations of plagiarism against Neri were incredibly damaging but unfounded. She admitted to clerical errors graciously and appropriately, which were blown out of proportion in the media. It was malicious and unjust, tarnishing her reputation as a scientist and engineer.

> Business Insider's false accusations of academic fraud against Neri were driven by malice and sensationalism, damaging her in the public eye and causing immense psychological stress. Their haste in publishing without giving adequate time to respond was unacceptable and demanded legal action.

> Upholding justice and defending Neri's integrity in the face of wrongful attacks is crucial. The fight against defamation, especially in journalism driven by clickbait incentives, requires holding the media accountable for the real harm inflicted. It is an effort worth pursuing to protect not just Neri, but also other aspiring young scientists from such damaging narratives.

X and free speech

> The power of social media platforms like X, formerly known as Twitter, is changing the way we manage and defend our reputations. In the past, misleading or harmful media articles could heavily impact one's standing with little recourse, but now, within hours, a platform enables us to respond and counteract misinformation, potentially reaching millions with our side of the story. Warren Buffet's insight has never been more relevant: a journalist with a pen can cause enormous harm, but a tool like X provides a much-needed counterbalance.

> X also plays a crucial role in fostering free speech and diverse perspectives, which is vital in today's climate of widespread misinformation and government influence over traditional media. By allowing anonymous speech and giving voice to alternative viewpoints, platforms like X help ensure that no single narrative goes unchallenged. This level of discourse is critical for truth and accountability, especially when mainstream media and government actions are often aligned. The importance of having independently owned platforms, like those managed by Elon Musk, cannot be overstated in the pursuit of a more balanced and informed public dialogue.

Trump

> Looking back at Trump's presidency, I highlighted how his business background had potential for the U.S., stating, "It's a great thing that we have a businessman as president." Despite his flaws, he made positive economic impacts, with the lowest black unemployment rate in history under his leadership, acknowledging, "he did a lot of good for the country."

> However, I also criticized Trump's leadership style, citing his lack of civility and divisiveness, adding that he contributed to the extreme divisiveness in the country, noting, "he's been a very imperfect president."

Dean Phillips

> I deeply believe that the country is in desperate need of a leader who prioritizes what's best for America over party lines. Dean Phillips embodies that ethos; he’s "an honest, smart, motivated, capable, proven guy" who isn't driven by the need for political power. His willingness to challenge the status quo, despite the backlash, shows real principle and vision.

> It's heartbreaking to see the current state of leadership under Biden. It feels embarrassing for the country to have a president who’s not only aging but also unable to effectively fulfill the demanding role. I can’t help but feel that it’s "really bad for America," and the lack of self-awareness from his inner circle only amplifies this issue, emphasizing a severe failure in leadership and succession planning.

Future

> Looking ahead, I’m genuinely optimistic about the influence of technology, especially AI, on productivity, scientific and drug discovery, and overall quality of life. AI might seem daunting with its "frightening terminator-like scenarios," but I believe its potential for good is vast. Coupled with a resilient American economy bolstered by strong venture capitalists and entrepreneurs, I see a bright future where innovation drives progress and prosperity.

> On the media and investment fronts, platforms like X, led by Elon Musk, have tremendous potential to innovate advertising and engagement. My firm, with a small but highly effective team, is poised for significant achievements, and personally, I aim to build a record comparable to Warren Buffett’s. Additionally, witnessing Neri's groundbreaking work in sustainability and product design is incredibly inspiring. Overall, while crises present challenges, they also pave the way for constructive change and progress.