Bill Ackman: "Everything You Wanted To Know About Finance (Except JCP) In Under An Hour"

Tyler Durden's picture

Whether you believe he is a one-hit-wonder or an investing wunder-kind, the following 44 minute clip from the activist investor (who is early, not wrong, on JCP, right?) provides investors with some indepth insights into what it takes to finance and grow a successful business and 'how to make sound investments that will lead to a cash-comfy retirement.' Of course, there are those who can and "do" grow a business, and those who "invest"... often times with less than stellar (ahem PSIV) results.


00:00:00 introduction
00:00:57 lemonade stand
00:03:14 fixed asset and inventory
00:04:30 assumptions
00:05:54 growing
00:08:12 cashflow
00:09:13 value
00:11:16 debt and equity
00:13:11 risk
00:14:59 rising capital
00:17:42 valuation
00:23:56 compound interest
00:25:37 advice
00:30:33 barriers for entry
00:33:34 when to invest
00:35:49 withstand volatility
00:37:13 mutual funds
00:41:24 ending


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Yen Cross's picture

JCP will get picked up by some Chinese/Canadian "private equity group".  Some "EVERGREEN" natural resource textile play! ()gone bad

RopeADope's picture

Where is the section on successful crony capitalism and fraudstering? I mean seriously, what world does this guy live in?

SafelyGraze's picture

in part 2 of the series, he shows how the balance sheet works when the lemonade company borrows a billion, hides it offshore or in the shadows, reports a billion in profits, distributes 100 mill to its executives and 10 mill a year as dividends thereby boosting its stock price (which the insiders then dump) which is measured in units whose value decreases exponentially over time.

in part 3 of the series, he shows how the balance sheet works when the lemonade company pledges its assets and employees and goodwill and future earnings and non-executive pensions as collateral to a private equity company in return for tranches of same, paid to the execs as deferred compensation in the buyout.

part 4 is still in development. it involves hookers and blow and campaign contributions and a regime change in a former soviet state; plus, what happens when the trading house encourages algorithms to offer-then-withdraw 99.9% of transactions; plus, what happens when shares that don't actually exist comprise 99% of the market.

if only you had bought the stock when you were 18 years old.

campaign? or campagne? 

disabledvet's picture

That's called "an election." You have to wait to years more for that now.

bgbarrelridr's picture

I am relatively new to ZH and am learning tons, but am a little confused as to Libratarians' stance on financial market regulation. Most seem to be anti-big-bank, anti-fed, gold standard,free market proponents etc. (including myself), but i do not understand how one can be a proponent of  free market competition without some type of govment (or other) regulation to prevent crony-capitalism fraud and monopolies. Could someone please educate me on the Libertarian or Austrian POV concerning this. Thanks

Zero Govt's picture

BG,  " i do not understand how one can be a proponent of  free market competition without some type of govment (or other) regulation to prevent crony-capitalism fraud and monopolies. Could someone please educate me on the Libertarian or Austrian POV concerning this."


It is Govt and law/regulation that leads to crony capitalism, fraud and monopolies. Govt is the biggest monopoly in society and the economy, it breeds monopolies through the suppression and protection racket that is Law/Regulation

look at banking where Govt/Law/regulation has not only not prevented criminality and systemic crisis and not even prosecuted it but actually grown (rewarded) the most inept and fraudulent bankers (Big Wall Street banks have grown from 50% to 70% of US banking sector funded/bailed-out by Govt). Govt/Law/Regulation is the problem, not the solution  

Monopolies do not occur in free markets because by nature it allows competition to freely compete and take bloated monopoies to the cleaners. And in a free market the rotten, frauds and inept go to the wall 

Take a look around Europe and America, industry after industry, market after market with Jabba the Hut fat cat monopolists sitting atop them all, competition stifled and strangled from entering markets like energy, healthcare, automobiles and stock markets by red tape regulations 

the Free Market is 'free' of rules/Govt and exactly like the black market which requires no politicians, lawyers, Courts or written contracts. Black markets, bazaars and farmers markets operate massively more efficiently than stagnant Govt regulated ineptitude, just consumer and supplier, no middlemen or pontificating a-holes required. And these markets will not collapse during recessions/Depressions as regulated ones do.

They have no barriers of entry as industries like oil, telecoms, electricity, water or banking has or indeed money itself which is another utterly corrupt Govt act of monopolism 

as soon as you apply a rule/law/regulation you chip away at freedom, the freedom to enter a market without restriction. Ask what do you think a rule is? It s a meddler behind a Govt desk almost always motivated by some private vested interest (ie. corruption) telling society how to do their job. Govt 'experts' know jack-shit about anything, they are surely not God, they do not know how to do any job better than the best (private) brains in the economy

Rule/law makers act after an event (which changes nothing) and are incapable of seeing the future (so always years behind the curve). Namely worthless at fixing the past and worthless at forseeing the future (garbage all-round)

Freedom kills the stupid, the corrupt and the monopolist because the brightest brains are free to compete (beat) greedy parasites. Freedom allows brains, effort, efiiciency and productivity. Govt/monopolism suppresses societies best and rewards the most corrupt/arse-licking vested interests, One model is progressive and vibrant the other only about power (manipulation and control), they are entirely different socio-economic models with no resemblence

if Freedom was a smell-test it would be bright, vibrant, colourful, smart and fast on its feet to bring us all progress. If Govt (monopolism) faced a smell test it would be stagnant shit passing corruptly through a sewer system

Law/Regulation is not the beginning of improvement, it is the beginning of destruction of free men to freely compete. The unmployment, poverty and destruction we see all about us is caused entirely by Govt and its monopolists, the rotten fruits hanging off the Govt tree like Wall Street, Big Oil, Pharma, Healthcare, Utilities and Media etc 

Welcome to the corrupt, bloated, stagnant fat cat Zombie Economy brought to you by the most corrupt institution in history, Govt

bgbarrelridr's picture

ZG, thank you for taking the time to post such a eloquent and thoughtful response, although i was wondering if you could explain what happened in the late 1800's prior to JP Morgan, Rockefeller, Carnegie etc.buying the 1896 election. Prior to that period, assuming there was free-market capitalism (possibly incorrectly??) how were they able to achieve so much power to bully and intimidate their way to power and produce their respective monopolies. Why was there lack of competition to achieve the equilibrium that supply and demand economics instill? Was the gov helping them? History books are somewhat vague (or propagandized) on this topic; would appreciate yours or anyone else opinion.

I realize this isn't a history lesson website and is off-topic, but helping me understand can help me to educate others as to the dire reality and  hopelessness of our current gov's policies. The education of the youth of the country IMO is paramount, as i think probably 90% or more of the population are totally clueless.

I am Jobe's picture

JCP will go in the way of KMART/SEARS. Need more Trailer Trash Crowd as the economy tumbles.


LoserTrader's picture

JCP is the lemons or the lemonade?

Best part of the video is he is not even wearing yellow.

If I were an institutional investor I would give him a hundred mill, duh, he has a soothing, confident voice.   Lull me to sleep with your bland but trustworthy personality Bill Ackman.  I will dream of your intellect.

overmedicatedundersexed's picture

the only way to invest today is if you are on the inside..want to learn to make money, find a mob boss, criminals are todays market pro's, maybe yesterdays as well...I'd rather not.

LongSoupLine's picture

Ackman, just another hedge fund piece of fucking shit.

Fuck off.

WeekendTrader's picture

not just a fucking prick. ask him about golf courses.

mrks's picture

To be fair, considering the target audience of this presentation (who most likely know close to nothing about finance, economics, investment and whatnot) - I think it's actually not bad at all, as a basic introduction to get one started.

Of course there's no mention that the whole game is rigged to no end, but hey - you gotta start somewhere. After all, in theory what he says is true. It's just that in practice, you'll get fucked by a reality that has gone out of whack.

Yen Cross's picture

I wanted to mess with you initially/ Then I got the joke ;-)  I'll put together a "retail sector overlay" for you.

NotApplicable's picture

If only we lived in a theoretical world.

Yen Cross's picture

 Agree/ you missed my breakeven F/X rant after Boner f..ked my housing numbers short trade Wednesday! Then the trade reversed and I just basically broke even. I didn't even go to the casino yesterday!

  These markets are as CDad so eloquently said, "sad beyond belief"! Guys like him don't fight the system, they get even! ;-}

Mugatu's picture

This piece of shit company occupies a space right next to his General Growth position.  Seriously, does this clown ever pick a company that is not on its way down?

I am Jobe's picture

Maybe he is sucking Edward Lampert for some ideas

buzzsaw99's picture

they all have the same idea. increase personal wealth while fucking their shareholders in the ass. eddie, m. dell, zuck, hundreds, nay, thousands. criminal maggots all.

BlueCollaredOne's picture

I bought a Washington Post (I live in DC metro) Thanksgiving day to analyze all of the Black Friday deals. I admit, I wanted a new winter jacket and was trying to find a retailer who had outerwear as a loss leader.

I looked at every single flyer, and JCPenneys is the one that stood out the most. Their advertisement was binded, whereas every other pamphlet were bifolds. Their advertisement was twice as large, and twice as thick as every other one. The graphic display was impressive, but the prices weren't. The average item was less than 10% off retail. It is clear that they were the most desperate company to try and rape on Black Friday. Jcpenney will be bankrupt again soon.

In case you were wondering, the only thing I bought that weekend was a mossberg 500 spx. It was my first gun purchase, and I couldn't be happier.

JackT's picture

Do you really expect JCP to pay for that kind of advertising and still offer you deep discounts?  Entitlement much?



BlueCollaredOne's picture


Actually I expect JCP to offer me discounts without worrying about advertising. They sell an I inferior product. Unfortunately fpr you, most sheep shop while having a certain brand prejudice in their mind which will cause them to not buy the "Arizona" brand shit from JCP.

I go to JCP to try and clean up after the fucks who pass over a good product because the tag doesn't say a name that releases sweet sweet dopamine from their shriveled minds.

I really am not sure what your post was trying to accomplish, but I hope your prostrate triples it sizes in the next few weeks.

It's u fortunate that your significant other is fat, tell him to lay off the GMO wheat. If we were actually in fight club, I'd make you unsumpressitible, and then I would steal your wallet so I could find your family.

I'm drunk, so fuck you.

azzhatter's picture

i think he was using sarcasm but that was a hell of a bitch slap you gave him. well done sir

Big Slick's picture

Drunk with a Mossberg.  I think I can see tomorrow's Drudge headline.

BlueCollardOne also seems to have a hair-trigger (no pun intended) in the face of Jack T's criticism.

Yup, I definitely see tomorrow's headline

cherokeepilot's picture

Now buy and store lots of ammo.  You will find that as you accumulate more guns, that you will want more guns.  Large ones ,small ones (concelaed carry).

Pull the plug from the shotgun that restricts the number of shells that can be loaded.  I believe that from the factory, you can only load 3 shells but after removing the plug you can load 5 shells.  Can't beat the shotgun for home protection.  Above all, go to a range where you can shoot your shotgun or other guns and practice, practice until you are comfortable with your firearms.  Remember that if someone breaks into your house, they are not there in friendship.  That perp can be on you in seconds as you try to be nice and convince him to leave.  The police may only be minutes away but the perp is here and now, blow the son of a bitch away.

Global Hunter's picture

This movie is really good to show relatives.


I don't know how many times on my own I've tried to explain to them, what kind of multiplie would you pay for free cash flow on a corner store? 



WizDumb's picture

Goodwill? are you kidding me?

...pixie dust !!!

I am a Man I am Forty's picture

That's the smoke in mirrors part he glosses over real fast.

WizDumb's picture

I think my head turned 45 degrees and I began calling him a counterfeiter in my head....
bankers...guh !!!

CunnyFunt's picture

Had to turn it off when he said McDonalds was pretty good quality food.

Yen Cross's picture

 I'm still ranting Myself, for not paying closer attention to your comments!

Yen Cross's picture

South Korean WON/ The government has put a 120% foreward fx contract out from 150% percent  to cool off the Bernanke PUT.  

  South Korea is hot! I would not flow capital / the ship has sailed)  I'm long Samsung( last November) and ready to sell...

  The North Sea brent trade looks good.  Has backed off 10% plus, and Iran? Thanks for asking/

Essential Nexus's picture

Betting on inside information has a better track record than valuation investing...

dark pools of soros's picture

you could work your ass off like this..  or there's Bain Capital

Fizzywig's picture

Where is the section on "cooking the books"?

barthezz's picture

check out the L. Summers piece... hilarious ensues.



willwork4food's picture

I am going IPO with the willwork4food (c)dynamic.

Initially we will have 10 beggars out on busy intersections. We hope to fund 5 more that actually wash your windshield too.

Anyone in for $100/share each? Projections are through the roof!

sicadischit's picture

Bullshit! If the lemonade stand lost money the first year. Where did the money come from to buy a second stand. Not to mention the added inventory. I stopped watching after that

lynnybee's picture

i haven't been in a SEARS, a KMART, or a JCPENNEY since 1990.  !WHO! still shops @ these stores?  i do not know.  none of my adult children shop these stores.  how these stores remain in business is beyond me.

Pool Shark's picture



As for Sears; walk into one in California and you'll feel like you were just transported to Tijuana. The only caucasions you'll see in a Sears are the few buying Craftsman tools...


GFORCE's picture

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.