Friday Wrap-Up: Inside Active Strategies and Learning from Bill Ackman

Hi everyone and welcome to Friday wrap up. I'm Nikolaj Tangin, the CEO of the Norwegian sovereign wealth fund. This week's episode was with Bill Eckmann and today Marta has handed me the microphone. This is a special episode with a guest from Inside the Fun to learn more about Active Management and Daniel Beltasar, how are you? Yeah, I'm very well. Thank you, Nikolay. Always good to be in Oslo. So Daniel is the co CIO in Active Strategies together with Pedro. Been at the fund since 2007 and started out as a portfolio manager. And just to be clear, Active Strategies, that's the part of the fund that deviates from the benchmark. So, Daniel, you admire Bill Lachman. Why is that? Well, I really admire him. And there's a very simple reason. I was invested in a stock and I lost a lot of money. I gave up and Bill came in and he doubled his money. Well, tell me what happened. Well, it's a company that I identified operates in a very good and healthy industry, very stable, very good long term prospects. What was the company? It was Air Products. The stock was cheap, so I thought there's an opportunity. It's much cheaper than the peers. And I got involved, and the stock kept underperforming. And then there was a profit warning and another profit warning and another profit warning. I kept losing money and I threw in the towel and I gave up. And then Bill decided to get involved. He got in. He engaged with the board, he made some changes to the company, and it became a very successful investment for him, and he doubled his money within a relatively short period of time. And what did you learn from it? I think I learned that every stock that's cheap is cheap for a reason, and something needs to change for that stock to perform and for that value to materialize. And I was just investing in hope for change. And Bill came in, and he made the change happen. Anything else that stood out? Yes, I think it was very interesting when you asked him what is a good company, and his response was, Good company or great company? And he explained his philosophy about investing, that he ideally identifies a great company, and there are not too many of them. And that's the kind of company that you can invest in. And the market shut for twenty years, and you don't need to worry too much, but in twenty years' time, you can be relatively certain that you generated a good return on that investment. And these are typically companies that have a strong moat around their businesses. It's well protected, and they generate very stable, very predictable cash flows in the long term. And when he said it, it reminded me a little bit Chris Horn and the way that he invests, and those two are probably one of the …