Bill Ackman says rising speculative trading and leverage are contributing to sharp swings in stock prices, making the market feel increasingly like a casino. Speaking to CNBC’s “Squawk Box” on Tuesday, the Pershing Square Capital Management founder said stocks were sometimes trading at prices that made little sense to him, a trend he does not believe is beneficial for the broader economy or country.
Ackman likened current conditions to a period when markets had 95% leverage, warning that the combination was fueling major moves in individual stocks. He said the volatility had also created opportunities for Pershing Square to buy companies at lower prices.
The fund bought Microsoft during the “SaaSpocalypse” sell-off, Amazon after its shares fell following President Donald Trump’s tariffs, and Alphabet after its stock moved sharply following the launch of ChatGPT, Ackman said.
He also warned about the growth of one-day leveraged products, perpetual futures and sports betting, saying they could encourage investors to treat stocks as a get-rich-quick scheme. Ackman said those conditions might benefit Pershing Square over the long term but were not good for the country.
Among the companies he is particularly bullish on, Ackman named Visa and Mastercard, which he described as great businesses, and Netflix. He disclosed a position in the streaming company in August.
Sources: CNBC Markets.