Bill Ackman Reveals First Investment Book He Read Was The Same One That Influenced Warren Buffett: 'It Was Kind Of The Inspiration For My Career…'

The founder of Pershing Square Capital Management, Bill Ackman, has revealed that the book “The Intelligent Investor” by Benjamin Graham was the catalyst for his investment career. Interestingly, the same book played a pivotal role in Berkshire Hathaway CEO Warren Buffett’s life.

What Happened: In a discussion with tech YouTuber Lex Fridman, which was posted earlier this week, Ackman disclosed that the first investment book he read was “Intelligent Investor.” 

He said the book, penned after the Great Depression and World War II, was targeted at the common man. It stressed the significance of distinguishing between price and value, a lesson that Ackman has applied throughout his career.

See Also: Bill Ackman Gains Over $600M On Handful Of Stock Bets, Enters Top-Earning Hedge Fund Managers

He said, "It's for the average man, and basically he says that you have to understand the difference between price and value. Price is what you pay, value is what you get."

He further expounded on Graham’s perception of the stock market as a “voting machine” in the short term, mirroring speculative interests and supply-demand dynamics. However, in the long term, the market behaves as a “weighing machine,” offering a more precise valuation of a company.

"And so if you can define what something's worth, then you can really take advantage of the market because it's really here to help you. And that's kind of the message of the book," Ackman said. 

Why It Matters: Ackman’s investment philosophy is deeply rooted in the principles he learned from “Intelligent Investor.” He looks for “non-disruptively businesses” that will be more valuable and profitable in a decade, even if the stock market shuts down. 

Previously, Buffett also said that his perspective on investing shifted after he delved into his mentor and professor’s book, prompting him to transition from purchasing stocks to acquiring companies. Since then, his investment approach has been characterized by a long-term outlook spanning 10 to 20 years.

Later in the conversation, Ackman was also asked about the factors that signal a company’s potential for growing into “something that’s going to make a lot of money.” 

In response, he said, "What we look for are these non-disruptively businesses — a business where you can close your eyes, stock market shuts for a decade, and you know that 10 years from now it’s going to be a more valuable, more profitable company.” 

The interview also touched upon Ackman's positive stance on Google, ChatGPT-parent OpenAI, Donald Trump, Elon Musk's X, formerly Twitter, and free speech. 

Read Next: Bill Ackman Breaks Wall Street Barriers, Launches Pershing Square Fund For Retail Investors

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Photo by Center for Jewish History, NYC via Wikimedia Commons