Bill Ackman Is 'Beginning To Get Optimistic'

Less than a month after a polarizing CNBC interview, hedge fund billionaire Bill Ackman is starting to feel differently about the near-term future of the market and the coronavirus (COVID-19) pandemic.

"I am beginning to get optimistic," Ackman began in a series of tweet Sunday afternoon. "Cases appear to be peaking in NY. Almost the entire country is in shutdown. Hydroxychloriquine and antibiotics appear to help. There is increasing evidence that the asymptomatic infection rate could be as much as 50X higher than expected.

"If this is true, the severity and death rate could be much lower than anticipated, and we could be closer to herd immunity than projected."

Ackman cited the fact that nationwide health institutions are doing everything they can to combat the spread of the coronavirus: "One could imagine a world in the next few months where everyone is tested and all but the immune compromised go back to a socially distanced but more normal life," he said in another tweet.

See Also: Bill Ackman Bet On Market Plummet, Turned $27M Into $2.6B

Change Of Heart

On March 18, the founder of Pershing Square Capital said on CNBC that at the rate the coronavirus is spreading, the American economy will enter a "depression-era period."

In February, Ackman's Pershing Square funds purchased credit default swaps (CDS) on various investment grade and high yield credit default swap indices. Pershing Square completed the exit from Ackman's bets against the market on March 23 and generated $2.6 billion compared with premiums paid and commissions totaling $27 million.

so are you saying that you're optimistic, placed some secret trade and you'll be on @CNBC first thing tomorrow to pump and dump?

— jason@calacanis.com (@Jason) April 5, 2020

The S&P 500 kicked off the second quarter on a low note last week as investors remain uncertain about how long the economic shutdown will last. Futures were trading modestly higher at time of publication Sunday night.

"Massive stimulus is being injected globally to backfill the economy and bridge us through the crisis," Ackman said in another tweet on Sunday. "Most corporations, banks and consumers entered the crisis reasonably well capitalized. Rates are extremely low. There is no housing or commercial real estate overhang.

"While it is hard to be positive when we know that tens of thousands more will die and many more will get severely sick, I have no choice but to be more optimistic about the intermediate future based on the data and facts I have seen recently. I hope I am right.'

See Also: 2008 Playbook Suggests Current Period Is Calm Before The Storm For Stocks

One of the biggest economic risks is rebooting small businesses once this is over. The Administration and the Congress appear committed to supporting small businesses. We will have to do more to solve this problem.

— Bill Ackman (@BillAckman) April 5, 2020

Image source: CNBC appearance