Bill Ackman on Everything You Need To Know About Investing & Finance In 1 Hour ~ market folly

Tuesday, December 11, 2012

Bill Ackman on Everything You Need To Know About Investing & Finance In 1 Hour

Pershing Square Capital Management CEO Bill Ackman did a video for Floating University and The Big Think entitled "Everything You Need to Know About Finance and Investing In Under an Hour."

On Finance / Business

The first segment of the video is ideal for beginners and students as it combines concepts from introductory accounting, finance and business classes.  He covers topics such as:

- How business works
- How to raise capital
- How to monetize your business investment
- Dynamics of investing in debt versus equity
- Assessment of risk
- Valuation

On Investing

The second part of the video delves into investing, noting that "the most valuable asset in investing is time."  He highlights the keys to successful investing:

1. Invest in public companies
2. Understand how the company makes money
3. Invest at a reasonable price
4. Invest in a company that could last forever
5. Find a company with limited debt
6. Look for high barriers to entry
7. Invest in a company immune to extrinsic factors
8. Invest in a company with low reinvestment costs
9. Avoid businesses with controlling shareholders

Ackman summarizes things by saying, "Find a business that you understand, has a record of success, makes an attractive profit, and can grow over time."  He says the best investments don't require a lot of reinvestment capital and generate a healthy cashflow to pay out in dividends to shareholders

He also addresses other investing concepts such as compound interest, psychology of investing, and how to withstand volatility

Other takeaways: Ackman said that, "(The) key here is not just shooting for the fences, but avoiding losses."  It's also worth highlighting that Ackman said he became interested in investing when he was 22 as he read The Intelligent Investor by Benjamin Graham.

Embedded below is Bill Ackman's video for Floating University:

We've also posted up a ton of other educational investment info (scroll through the list). 

For more advanced topics, head to more from this hedge fund manager via Bill Ackman's recommended reading list.

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