Bloomberg.com recently interviewed Bill Ackman. He layed down his rules for investing.
Bill Ackman’s Rules for Investing like an activist:
1) Make a Bold call that nobody believes in
2) When all the money goes one way. Go the other way
3) Do your homework
4) You don’t have to be old to be right
The rules are pretty simple and straight forward. With the first one leading to taking the risk that you are planning, because without risk there is no real reward. Every decision has a risk associated with it, how much of that risk you are willing to take can depend on your ultimate success. If everyone is doing one thing, why should you follow? Lead the way of your own path and make the decision that you want to do, if it means straying away from the herd then be it. If everyone always did exactly the same thing as everyone else, then there would not be any changes, and nothing would evolve. But needs change and so does the mindset. The most important rule is to do your homework. And it does not refer to your school homework that you get in 6th grade science. It refers to doing your research to make sure you are making the correct decisions after properly evaluating the scenario. Make the choice after you have proved to yourself why it is the right choice. “You don’t have to be old to be right” is a quote that means, wisdom doesn’t just come from age, making the right choice can happen anytime, and if you want to do something you believe is right, go ahead and do it, don’t wait for the right time, because there is never that perfect moment, things just happen and they turn out to be perfect at that time.
Bill Ackman – Activist Investor – Photo Via Bloomberg/Screenshot
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