Lawrence McDonald, founder of Bear Traps Report, called Warren Buffett the “GOAT” of asset management on Sunday while noting the legendary investor put “very little capital to work” during the 2020 Covid market drawdown compared to 2022’s market stress.
What Happened: “No one calls Warren out on that. He’s the GOAT -- asset management is so difficult,” McDonald wrote on X, responding to claims that Pershing Square Capital Management‘s Bill Ackman suggested Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK) would be better managed after Buffett’s departure.
Ackman quickly refuted these claims, stating, “I said no such thing,” and directed readers to his original post explaining comments made during a recent podcast that were “twisted” by media.
In his clarification, Ackman called Buffett “an extremely important hero” and “unofficial mentor,” explaining his views on Buffett’s cash holdings: “Warren sort of has this price discipline where if it trades for more than 10 times operating income, no matter how good the business, he won’t buy it and that’s worked really well for him for 60, 70 years.”
Ackman also addressed why Pershing Square sold Berkshire during COVID, noting they redeployed capital to companies trading at deeper discounts, including Hilton Worldwide Holdings Inc. (NYSE:HLT) and Lowe’s Companies Inc. (NYSE:LOW).
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Why It Matters: Regarding succession, Ackman expressed confidence in Berkshire’s future under Greg Abel, Buffett’s heir apparent, suggesting Abel’s operational background might create value through improved efficiency at Berkshire-owned companies like Burlington Northern Railroad.
“The next generation of leadership will be a little more disciplined about making sure the right people run the companies,” Ackman wrote while emphasizing this wasn’t a criticism of Buffett, who he praised for loyalty to company leaders.
The exchange highlighted Berkshire’s 250% return since 2015, compared to Pershing Square’s reported 100% during the same period, underscoring Buffett’s continued market outperformance at age 94.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
