Bill Ackman on Lessons from a Lifetime of Investing: AI Disruption Risk, the Netflix Round Trip, Howard Hughes as a Modern Berkshire Hathaway, and Building a Brain Institute After His Daughter's Hemorrhage

Bill Ackman sat down with Shane Parrish on The Knowledge Project for a wide-ranging conversation that opens somewhere no investing interview usually goes: his daughter Lucy’s near-fatal brain hemorrhage, and the brain rehab institute he and Neri Oxman are now building in response. From there it moves through how AI changes the risk of disruption, why a venture bubble will end in a public blowup, how Pershing Square goes from an idea to a billion-dollar position, the Netflix sell and rebuy, the plan to turn Howard Hughes into a modern day Berkshire Hathaway, a watch company he bought on a whim, and what success means to him at 60.

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Ackman describes Lucy’s arteriovenous malformation rupture, the 19 hours before she reached surgery, her recovery, and the Ackman Oxman Institute, a brain rehab, recovery and longevity center on a 3.4-acre Manhattan site meant to fix what hospitals, insurers and surgeon incentives get wrong. He calls AI the most transformational technology of his lifetime, says it massively raises disruption risk (even Buffett missed the internet), sees bubble-like venture valuations that will end in a high-profile blowup, and tells founders to raise now but guard their runway. He explains Pershing Square’s research library and two-person deep dive process, why AI is only a research tool for them, why the best trades (CDS before COVID, shorting AAA credit before 2008) could never come from a model, the stone-tablet checklist born from the 2015 to 2016 losses, and why he quit short selling after Herbalife. He walks through the Netflix round trip as a lesson in dispersion of outcomes, the history of Howard Hughes from the General Growth restructuring, and the plan to use its real estate cash to build Vantage into a Buffett-style insurer with permanent capital. He also covers Brookfield as an AI winner, sports teams as art, index funds for ordinary savers, the end of Pershing’s activist era, CEO recruiting, buying Bremont, and his definition of a significant life.

Thoughts

The most useful part of the Lucy section is not the emotion, it is the diagnosis of the system. Ackman frames brain injury care as an incentive problem: neurosurgeons get paid for surgeries, not for recoveries, insurers cover roughly six weeks of rehab, and the typical patient, if they are operated on at all, goes to a nursing home and dies months later of pneumonia. That is an investor’s read of a broken market, and the institute is his activist response to it. The interesting bet is that AI changes the unit economics of recovery. A $500-an-hour speech therapist is only available for as long as insurance pays, but an AI speech therapist is available for the years in which patients keep improving. If that works, the thing Ackman could do for Lucy because he is “financially unconstrained” becomes something closer to a default.

His AI argument for investors is sharper than the usual hype or doom. The value of a business is the cash it generates over its life, and Pershing only buys things it would happily own if the market closed for ten years. AI attacks exactly that assumption, because the question is no longer “is this moat wide” but “does this moat still exist in five years.” He admits everyone, himself included, is “guaranteed to look foolish” on at least one name. Then he makes the more subtle point: if everyone has the same models, AI output is not an edge. Pershing’s best trades (CDS before the pandemic, shorting AAA credit before the financial crisis, buying a bankrupt company’s stock) were bets against the consensus, and a system trained on everything that already happened is structurally bad at those. The human job shrinks to the part that matters most.

The Netflix story is the cleanest lesson in the conversation, and it is about how to be wrong well. Ackman bought, got told by management they would never do an advertising tier, and then three weeks later watched a “shell shocked” management team announce one. He sold, not because the business was bad but because the dispersion of outcomes had widened past what a high-certainty portfolio should hold. He put the money into Alphabet, took the tax loss, and felt no need to “make it back the same way.” Netflix then executed brilliantly, the stock got expensive, then it halved again, and he rebought. That is the right way to think about a broken thesis: the question is never whether you were right about the company, it is whether the range of outcomes still fits your mandate at today’s price.

The Howard Hughes plan is the part most people will skip, and it is probably the most important long-term idea in the interview. He is explicitly copying the Berkshire template: a slowly liquidating legacy business (textiles for Buffett, land and condos for Howard Hughes) whose cash funds an insurer, whose float sits in Treasuries while equity capital goes into common stocks managed by an excellent stock picker. The Munger line Ackman quotes, that Berkshire “was almost never forced to make decisions by circumstances,” is the real thesis. Pershing has spent years redesigning itself around permanent capital, and he blames his biggest mistake on being distracted by fundraising. Wall Street still sees a real estate company it hates, which is exactly the kind of mispricing Ackman likes to own.

The end of the interview quietly explains why the old Bill Ackman is gone. He has not made an activist investment since 2016, and he says plainly that he does not expect to run another proxy contest because “you don’t run a proxy contest against someone with three million Twitter followers.” Reputation and audience have replaced the 5% stake and the public fight. CEOs now write thank-you letters when Pershing buys in. That power is also what makes his definition of success believable: “the greatest beneficent impact on the largest number of people.” Coming at the end of a conversation that started with his daughter in intensive care, the institute reads less like philanthropy and more like the capstone of a career spent learning how to fix things other people had given up on.

Key Takeaways

Lucy Ackman suffered a ruptured arteriovenous malformation (AVM), a direct artery-to-vein connection in the brain that burst and caused a massive hemorrhage while she was alone in her apartment.
About 19 hours passed before she reached surgery. Surgeons usually do not operate after about five hours because they assume brain death, so she was extremely close to dying.
Her cognition, personality and sense of humor came back. Walking is returning, speech is coming back one sound at a time, and her vision is showing some progress.
Ackman and Neri Oxman are building the Ackman Oxman Institute (AOI) on a 3.4-acre site at 65th Street and 11th Avenue, focused on brain rehab, recovery and longevity.
The institute will lean on brain computer interfaces, AI interpretation of brain data, and emerging tools like camera-to-visual-cortex bionic vision, which Elon Musk told Ackman could beat natural vision within five years.
Ackman says many neurologists and neurosurgeons are “nihilists” who do not believe major recoveries are possible, and that they are wrong.
The care gap is structural: surgeons are paid for surgeries, not recovery, rehab is often “embarrassingly inadequate,” and insurers may cover only about six weeks.
AI speech therapy could extend recovery care for years at a fraction of the cost of a $500-an-hour human therapist.
Hospital nutrition is a neglected lever. The institute plans to serve genuinely good food because nutrition is central to recovery.
Lucy’s Oura ring showed a sharp pulse spike and drop around 9 a.m. Combined with fall detection, wearables could flag events like this far sooner.
Ackman believes something good comes from every bad thing, a view learned from several near-death experiences in business that each left him stronger.
He ran two Pershing Square IPOs over Zoom from Lucy’s hospital room, alternating 45-minute meetings with 15 minutes at her bedside.
Tennis almost every morning is his main form of meditation because it forces total focus on the ball.
Pershing Square’s investment team has been the same for about nine years, which builds a culture where he never questions what the team tells him.
Ackman now generates a minority of the portfolio’s ideas. No one is paid on individual stocks, and he owns about 45% of the management company with the team owning roughly 35%.
He criticizes typical closed-end fund boards, where the same handful of directors can sit on dozens of boards, and says Pershing hires and pays real directors.
A bubble is FOMO pulling more and more money into the same trade until overvaluation, and they tend to cluster around technological transitions.
AI is the most transformational technology of his lifetime, and private venture shows bubble-like behavior, such as a company going from a $400 million to a $1 billion valuation in two weeks.
He expects a high-profile blowup that resets the market. Founders should raise now, treat every dollar as their own, and keep years of runway.
Public investing bets on the business, since a bad CEO can be replaced. Venture bets on the founder, since the original idea often fails. Coupang began as a Groupon clone and became the Amazon of South Korea.
AI massively increases disruption risk, and even Warren Buffett failed to see internet disruption like Wikipedia killing World Book.
AI will cut costs for big legacy spenders (Cognition rewriting bank COBOL in days), but whether they keep that margin depends on pricing power.
Pershing keeps a library of great companies it has researched but found too expensive, then buys on shocks like COVID or the “SaaS apocalypse,” which let it buy Microsoft cheaply.
The process: two analysts do the deep dive (filings, transcripts, expert networks, former employees, competitors), build a model, and present to the full team, with Ackman and CIO Ryan Israel doing independent work.
Pershing uses AI only as a research tool, not for models, because if everyone has the same AI it is hard to be differentiated.
Their best trades (CDS before COVID, bets on rising rates, shorting AAA credit before 2008) came from contrarian macro views expressed asymmetrically, not from models.
After big losses in 2015 and 2016, Pershing wrote its principles on a stone tablet: simple, predictable, free-cash-flow-generative, large-cap companies, great management, and an aversion to short selling.
Short selling is “asymmetry in reverse.” The Herbalife short failed because of market dynamics, including Carl Icahn taking the other side, and the hedge fund industry trying to squeeze Pershing.
He has become more outspoken because his audience gives him influence, and he believes a lot of evil goes unchecked if no one says the emperor has no clothes.
AI has been invaluable for vetting medical decisions for his daughter, and he thinks every doctor should check their work against an AI.
Brookfield is an AI winner because of data centers, power and infrastructure financing. Sports teams are valued more like art than cash-generating businesses, and he will not buy one.
Pershing no longer needs public activism. CEOs send welcome letters, and Ackman believes activism that helps short-term holders at long-term cost is a form of greenmail.
For ordinary savers: real investing takes real time, otherwise buy index funds, start young, let compounding work, and do not hold cash because the market looks expensive.
Netflix: bought after a subscriber miss, sold when management reversed on advertising and the dispersion of outcomes widened, rebought after the stock halved again.
Howard Hughes was created from the General Growth Properties restructuring to hold the non-mall assets the market hated, and it is now 47% owned by Pershing.
Its master planned communities, like The Woodlands, work like Sim City. Selling land and condos generates cash, which will now fund the Vantage insurance business.
The plan is to move Howard Hughes from roughly 70% real estate to 70% or 75% insurance by capital over about five years, without issuing much stock.
Berkshire’s keys: control, permanent capital, no dividends, retained earnings, a great stock picker, talented operators, and no dilution.
Ackman blames his biggest investment mistake on being distracted by fundraising, which is why Pershing moved to permanent capital vehicles.
He found Bremont by chance, wrote the founders a note offering to partner, later took control during a board fight, and backed CEO Davide Cerrato.
The best CEO hire is usually someone who has done it before, like Brian Niccol at Chipotle, vetted through 360-degree expert network references.
Success for Ackman is a significant life, measured as the greatest beneficent impact on the largest number of people.

Detailed Summary

Lucy’s Brain Hemorrhage and 19 Hours of Pressure

Ackman explains that Lucy, an otherwise healthy young woman living alone in Williamsburg, had an undiagnosed arteriovenous malformation. Blood flowed straight from an artery into a vein without slowing through capillaries, and eventually a vein burst. Blood filled a confined space, the pressure had nowhere to go but down onto the midbrain, and she lay on her floor from roughly 9 a.m. until family noticed she had not picked up her luggage for a trip to Abu Dhabi. His oldest daughter found her barely breathing. Emergency responders did not know what was wrong, and she waited on a gurney at Elmhurst Hospital until a CT scan revealed the bleed. Surgeons removed about 40% of her skull to relieve the pressure, and she was moved to Mount Sinai.

Ackman gave the doctors what he calls a “dare to be great” speech, offering unlimited resources and the newest technologies. He learned weeks later that surgeons rarely operate after five hours because they assume brain death. Lucy has since regained her cognition and personality, is relearning to walk and speak, and has shown progress with her vision. Her mother has been there every day, her friends visit daily, and the family bought an apartment in their building and designed it as a recovery space.

The Ackman Oxman Institute

An early idea to redevelop Mount Sinai’s Fifth Avenue campus would have taken a decade, so when a vacant biotech building came up at 65th Street and 11th Avenue, Ackman closed on it within 60 days and contracted for the rest of the 3.4-acre site. The goal is the world’s best brain rehab, recovery and longevity institute, drawing on brain computer interfaces, AI interpretation of neural data, and future tools like bionic vision. He wants what he learns for Lucy to be available to everyone, and argues that his real estate background, his wife’s architecture practice and his network make him unusually well positioned to build it.

He is blunt about why the field has stalled: insurance economics, surgeons paid per procedure, weak hospital rehab programs, and families who cannot provide care at home. A Mass General rehab leader told him the typical patient ends up in a nursing home and dies of pneumonia within months. Technology, especially AI therapy, and better nutrition are two of the levers he plans to pull, with the aim of making the institute self-sustaining.

Running Pershing Square While Life Happens

Ackman says Pershing Square has evolved from a one-man idea shop into a team that has been together about nine years with essentially no turnover, in an industry where top people jump for nine-figure bonuses. That continuity creates trust and candor. He now generates a minority of the ideas, Ben Hakim runs much of the business side, and compensation is tied to overall performance rather than individual stocks. The public vehicles have independent, properly paid boards, which he contrasts with closed-end fund boards where the same directors sit on dozens of funds. His exercise habit, mostly tennis, is his meditation, and he admits he should return to formal meditation.

Bubbles, Venture FOMO and Advice for Founders

Ackman defines a bubble as FOMO driving more money into a trade until it is overvalued and bursts, often around big technological shifts. AI is the most transformational technology of his lifetime, and venture shows clear bubble behavior: preempted rounds, valuations jumping from $400 million to $1 billion in two weeks, a Series A at a $5 billion pre-money valuation. He points to Buffett, whose stock hit lows during the dot-com bubble while he refused to join in. He recalls a Barron’s piece listing how many months of cash each internet company had left, published about a week before the crash, and predicts a similar high-profile blowup. Founders who spend carefully and hold years of runway will survive. Those who need to raise in three months will not.

Public Markets Versus Venture

In public markets Pershing buys super durable growth companies: dominant, profitable, strong balance sheets, pricing power. The CEO matters, but a bad one can be replaced. In venture the founder is nearly everything, because the original idea often does not survive. His best venture investment was Coupang, where he disliked Bom Kim’s plan to build the Groupon of South Korea but liked Kim and his case for Korea. Kim ended up building the Amazon of South Korea.

How AI Changes the Investment Profession

Investing means estimating a business’s cash flows 10, 20 and 30 years out, and AI has dramatically increased the risk of disruption to those estimates. Buffett missed the internet, and Ackman expects everyone to be wrong about at least one AI casualty. He sees big winners too: Cognition can modernize a bank’s legacy COBOL in days, lowering costs for heavy tech spenders, though whether they keep that margin depends on pricing power. The pace of improvement, updates that matter arriving in days rather than years, is the fastest he has seen. He is not scared, but he says moats need far more scrutiny.

Pershing’s Investment Process and Checklist

Pershing builds a library of great companies it has researched but found too expensive to earn its target of 20% or more a year, then waits for events like COVID or the SaaS sell-off, which let it buy Microsoft at an attractive price. Two analysts do the deep work, from SEC filings and conference calls to expert networks, former employees and competitors. They build a model and present to the team, while Ackman and CIO Ryan Israel do their own independent work. AI is used only as a research tool. The firm’s best returns came from contrarian, asymmetric macro bets like credit default swaps before the pandemic and bets on rising rates, which no model would have suggested. After losses in 2015 and 2016, Pershing wrote down its principles as a checklist, including an aversion to short selling.

Short Selling, Herbalife and Speaking Out

Ackman never liked shorting because losses are unlimited and gains are capped. Most of the MBIA profit came from credit default swaps, not the stock short. The Herbalife short looked like a sure thing, a pyramid scheme harming vulnerable people, but Carl Icahn bought in, the company attacked its critics, and other hedge funds tried to squeeze Pershing. He says it did lasting reputational damage. On his newer public voice, he notes his high school yearbook named him “most verbose,” says his following now lets him move narratives and even policy, and adds that a lot of evil goes unchecked when no one says the emperor has no clothes.

Brookfield, Sports Teams, Activism and Index Funds

Ackman calls Brookfield a clear AI winner because of its skill at building and financing data centers and power. He is a Josh Kushner fan and sees the human value of live sports, but says teams are priced like art rather than businesses, and he will not buy one. Pershing no longer needs public activism: with a long-term track record, CEOs now welcome them, and he calls short-term activism that hurts long-term holders a form of greenmail that index-fund owners will reject. For people investing from a paycheck, index funds are the answer unless you commit real time to research. Start young, let compounding work, and do not hold cash waiting for a cheaper market. He still sees restricted stock and options as useful for retention and alignment at mature companies.

The Netflix Sell and Rebuy

Pershing bought Netflix after a subscriber miss crushed the stock, shared its thesis with management, and heard that an advertising tier would never happen. A few weeks later management missed again and announced an ad model. With the thesis broken and the range of outcomes much wider, Pershing sold, took the tax loss, and bought Alphabet. Netflix then executed superbly, won the streaming wars and became a much stronger cash generator, but the stock was too expensive. When it was cut in half again, Pershing bought back a business that had proven itself at a price that made sense.

Howard Hughes: From Leftover Assets to a Modern Berkshire Hathaway

Pershing bought 25% of General Growth Properties during the financial crisis, pushed it into Chapter 11, and ran a restructuring that preserved shareholder value. To make General Growth look like Simon Property Group, it spun the land, development and master planned communities into Howard Hughes, a collection of assets the market did not want. Over time the portfolio narrowed to master planned communities such as The Woodlands near Houston, a small city of about 150,000 people that Ackman compares to Sim City. The company sells residential land to builders, develops commercial land, and sells condos in Hawaii, but the stock has always traded well below asset value.

Pershing now owns 47% and is copying Buffett’s playbook. The real estate business slowly liquidates itself and throws off cash, which will go into Vantage, a specialty property and casualty insurer and reinsurer run by what Ackman calls the best management team in insurance. Float will sit in short-term Treasuries, and equity capital will be managed by Pershing in common stocks, with the aim of earning 20% or more by combining profitable underwriting with strong investment returns. Ackman lists Berkshire’s keys as control, permanent capital, retained earnings, stock-picking skill, talented operators and no dilution. He recalls Charlie Munger telling him the most underrated part of Berkshire’s success was never being forced to make decisions by circumstances, and says Pershing has designed its permanent capital vehicles around exactly that. Fundraising was a distraction behind his worst mistake, and he says compounding near historic rates would put Pershing at a trillion dollars in 20 years.

Bremont and Recruiting CEOs

Ackman bought a Bremont watch from a salesman in Dallas, forgot about it, rediscovered it when a friend warned him not to wear recognizable luxury watches in London, then walked past a Bremont store in Mayfair and bought eight. He wrote the founding English brothers offering to partner, bought a minority stake, and later took effective control during a board dispute over CEO Davide Cerrato’s changes. He now chairs the board. The Supernova, with a fully luminous dial, is headed to the moon. On CEO recruiting, he says the lowest-risk choice is someone who has done it before, like Brian Niccol at Chipotle, vetted through expert-network references, and that he can judge passion, capability, energy and character in about an hour.

Misconceptions, the End of Activism and a Significant Life

People who meet Ackman often say he is nicer than his media image. He calls himself someone trying to get to the truth, not a hostile person, and says the Herbalife short hurt his reputation. Pershing has not made an activist investment since 2016, and he doubts it will ever need another proxy contest, since any company would give it a board seat if asked. Having turned 60 in May, he thinks about the 20 to 25 healthy years ahead, hopes AI and better habits extend that, and mentions a grandmother who lived to almost 106. Success for Pershing investors is a life-changing return. Success for him is a significant life, the greatest beneficent impact on the largest number of people, and he believes the institute will be one of the biggest ways he achieves it.

Notable Quotes

“Neurosurgeons are highly compensated but they get paid for doing surgeries. They don’t get paid for the recovery of the patient over time.”
Bill Ackman, on why brain injury care has stalled

“My advice to founders is treat every dollar as if it’s your own money and spend it really carefully.”
Bill Ackman, on the venture bubble

“I weight the person more than the idea because often the original idea is not the idea that turns out to be the success.”
Bill Ackman, on venture investing and Coupang

“All of us are guaranteed to look foolish with one business or another that we didn’t anticipate the risk of disruption because of AI.”
Bill Ackman, on how AI changes the investor’s job

“In a world where everyone has the same access to AI, it’s hard to be differentiated.”
Bill Ackman, on why Pershing Square uses AI only for research

“You can lose infinity and your amount you can make is finite.”
Bill Ackman, on why he stopped short selling

“We were almost never forced to make decisions by circumstances so we always had options.”
Charlie Munger, as recalled by Ackman, on Berkshire’s most underrated advantage

“I don’t think you run a proxy contest against someone with, you know, three million Twitter followers. I think it ends badly for management.”
Bill Ackman, on why Pershing’s activist era is over

“I want to have the greatest beneficent impact on the largest number of people.”
Bill Ackman, answering the closing question on success

Watch the full conversation between Bill Ackman and Shane Parrish here.

Bill Ackman on Lessons from a Lifetime of Investing: AI Disruption Risk, the Netflix Round Trip, Howard Hughes as a Modern Berkshire Hathaway, and Building a Brain Institute After His Daughter’s Hemorrhage