Bill Ackman is warning that speculative trading has pushed the stock market toward a casino atmosphere, with leverage helping produce price moves he believes often make little sense. The founder of Pershing Square Capital Management said the pattern leaves him questioning whether markets are functioning properly.
“Every number of days, I feel like markets are broken,” Ackman told CNBC’s “Squawk Box” on Tuesday. His concern centers on stocks moving to prices that appear disconnected from what he considers reasonable.
“Stocks trade at prices that make no sense to me. Yes, it’s good if you’re a long-term investor and you can buy at a stupid price. I don’t think it’s good for the country generally.”
Ackman drew his sharpest comparison by describing current trading as a return to casino style markets. He linked the massive stock moves to extensive leverage within the financial system.
“We’re back to the casino type markets when there was 95% leverage,” he said. “I don’t think that’s inherently good for the economy, for society, and it’s leading to these massive moves in stocks.”
His warning does not mean Pershing Square has avoided the disorder. Ackman said those same market dislocations have allowed the hedge fund to purchase companies at prices it viewed as major bargains.
Microsoft was one of the companies Pershing bought after its shares were pummeled during the “SaaSpocalypse” earlier this year. The decline gave the firm an opportunity to acquire a business it considered high quality at a discounted price.
Pershing also purchased Amazon after its shares fell following President Donald Trump’s tariffs. The firm took advantage of another market decline rather than retreating from the volatility Ackman criticized.
Alphabet provided another example of Pershing acting during a dramatic price movement. Ackman said the stock moved “massively” following the launch of ChatGPT, creating another opening for the hedge fund.
Those purchases reflect the two sides of the volatility Ackman described. Market swings can create attractive entry points for patient investors, even as he argues that the broader speculative environment is harmful.
Ackman is particularly troubled by the growth of leveraged vehicles designed around a single day, along with perpetual futures and sports betting. He worries that these products and activities encourage investors to view the stock market as a fast route to wealth.
That attitude, according to Ackman, could bring disastrous consequences for people caught in abrupt market moves. Heavy leverage can leave speculative traders exposed when prices shift rapidly in the wrong direction.
Ackman made a clear distinction between what benefits his investment firm and what benefits the broader public. Pershing can use sudden selloffs to buy favored companies, but he does not see the surrounding conditions as healthy.
“It’s good for us long term, us being Pershing Square,” he said. “I don’t think it’s good for the country.”
Despite his criticism of current trading behavior, Ackman remains especially bullish on several prominent companies. He identified Visa and Mastercard as businesses he views with particular confidence.
Ackman called Visa and Mastercard among the world’s “greatest” businesses. He also pointed to streaming platform Netflix, where he disclosed a position in August, as another stock he favors.
His concern remains focused on speculative behavior and the risks created when investors treat markets as a quick wealth machine. At the same time, Pershing continues using the resulting volatility to purchase companies it considers high quality at lower prices.