Wall Street has plenty of candidates to consider who made the greatest deal of all time. For example, Jesse Livermore, who bet that the stock market would fall in 1929 and made a profit of about $100m, equivalent to $1.5 billion today, and George George Soros made a profit of $1 billion when he bet that sterling would fall against a basket of other currencies in 1992.

And, of course, John John Paulson's extraordinary bet in the years before and after the 2008 financial crisis that securities linked to subprime mortgages would collapse. According to Wall Street Journal reporter Greg Sackmann's best-selling book, the greatest Trading in History, Paulson made 20 billion dollars for himself and his hedge fund investors.

Then there is the deal Bill Ackerman made in March 2020.In three weeks, as novel coronavirus swept the world, Ackerman spent $27 million on credit default swaps (credit default swap,CDS) and made a profit of $2.6 billion. He then reinvested a large portion of the windfall in a long position that he initially wanted to protect by buying insurance. Ackerman made another $1 billion in the dramatic stock market recovery that followed.

In short, Ackerman netted $3.6 billion for him and his investors with a bet of $27 million.In absolute terms, this deal may not be comparable to the Paulson deal. "after all, $3.6 billion is not $20 billion.But Ackerman's investment earlier this year is likely to be rated as the greatest deal in history based on the internal rate of return.

The internal rate of return reflects the time value of money and is one of the most important indicators of financial performance. Before that, no one had been able to make 100 times as much money in 10 days, and at the same time large enough to make sense.

Of course, Ackerman, the 54-year-old founder of Pershing Square, INC. Capital Management, is known for making big bets on the direction of individual stocks. He is not a typical trader investor, he is more like a "buy and hold" investor, like his idol Warren Buffett (Warren Buffett).

Ackerman has made some major investment successes in the past. In less than a year, he doubled his $1.4 billion investment in Canadian Pacific Railway (Canadian Pacific Railway) and turned his $60 million investment in General growth Real Estate (General Growth Properties) into $3.5 billion.

But given Ackerman's lightning rod personality, he is better known for his failed bets. These included his $1 billion shorting of the controversial vitamin supplement maker's "giant face" after a big presentation on Herbalife Nutrition, HLF, and a $4 billion loss on his investment in Valeant International Pharmaceuticals. The period from 2015 to 2018 was disastrous for Ackerman, whose fund is losing money every year, while the S & P 500 is rising (except 2018). Many people think Ackerman is finished.

But he proved the skeptics wrong. In 2019, the s & p 500 index rose 31.5%, while Pershing square rose 58.1%. As of September 15, after deducting expenses, his assets had grown by 50 per cent and his assets under management had returned to $11 billion, although that was much less than the $20 billion he had managed.

As Barron Weekly mentioned in its recent cover story, special purpose acquisitions (SPACs) were all the rage in July.

Ackerman caught up with the best part of SPAC by raising $4 billion, the largest SPAC-driven IPO in 2020 and one of the largest IPO this year. (in a typical Ackermann style, he also tried to use SPAC to buy Airbnb and Stripe, but failed. In his view, Bloomberg is another very suitable choice for SPAC.

Although Ackerman saw opportunities in the market, he began to worry about the macro situation again. He believes that as the weather turns colder, we will face another peak of novel coronavirus epidemic. "the bad news is that you will start to see infection rates start to rise," he said. On the other hand, treatments and vaccines may be available in the next three to six months to help slow infection and mortality. "these will be a drag, but the general trend is to leave COVID-19 behind," he added.

Ackerman is more worried about the financial market turmoil related to the presidential election result, for example, if Donald Donald Trump appears to win on election night and Joe Biden wins in the mailed vote count weeks later. "this will not be an interesting period in American history, and people will feel that this election was stolen from them in one way or another," he said. "

In any case, there will be confusion and unknown. "if we have a new president, then there is uncertainty from a policy perspective," Mr Ackerman said. "if Trump is re-elected, then we are not sure what Trump's second term will be like. This will be a period of political uncertainty. Moreover, uncertainty is not a friend of the market.

Ackerman married Neri Oxman (Neri Oxman) in early 2019, and their daughter is still a toddler, and the sharp rebound that Ackerman began these days was largely due to his March trade.

It all started with a nightmare. When it comes to stocks, Ackerman likes to think of himself as an optimist except for Herbalife. But by the end of January, as he learned more and more about novel coronavirus, he became "more and more pessimistic" and the virus had begun to spread around the world.

Until then, pricing in both the stock and bond markets peaked. The Dow Jones industrial average peaked at 29551 on February 12th, and the average yield on high-yield bonds was 5 per cent, but by risk-adjusted standards, that was supposed to be twice that. Mr Ackerman said he did not think the fast-growing market would last: "my nightmare is that this virus replicates and infects very quickly. "

He is considering locking in some of the gains through the sale of a large number of shares, such as Lowe's Companies Inc (Lowe's, LOW), Chipotle Mexican BBQ (Chipotle,CMG), Agilent Technologies Ltd. (Agilent Technologies,A) and Hilton Hotels Group (Hilton Worldwide,HLT).

He has sold his stake in Starbucks Corp; Starbucks Corp has reached his valuation, and Starbucks Corp's exposure to China is worrying. He also cut his 20% position in Chipotle to 15%. But he sits on the boards of many companies where he holds a large position, with concerns about selling shares and taxes, based on the performance of the stock price. "We are very supportive of management," he said. "We are long-term investors and if we quit, it would look bad. "

Instead, Ackerman hedged his long-term exposure by buying insurance to prevent heightened fears of the virus from widening bond market spreads. Starting around February 22, he bought insurance for three different bond indices: the US investment grade bond index, the European investment grade bond index and the US high yield bond index. Since fear was far from mainstream at the time, Ackerman's cost of protection was very low. "the market for credit default swaps is so tight that spreads are less than one basis point," he said.

This is not a small operation. Ackerman plans to buy nominal protection for more than $50 billion. It took him several days to find the principal willing to provide him with 5 billion dollars of incremental insurance in the intermediary agencies of Bank of America Corporation, Citigroup Inc and Goldman Sachs Group. His broker told the market that a "non-traditional account" was buying. Pershing Square's "role setting" is a bit misleading, but the truth is that Ackerman has not bought any CDS since the 2008 financial crisis.

He says sellers of this insurance, including Bridgewater, a large hedge fund managed by Blackrock and Ray Dalio, must be thinking, "this kind of trading is just increasing. Maybe some fool who doesn't understand CDS broke into our market and went on a buying spree. (Qiaoshui and Blackrock declined to comment)

Ackerman and his partners debated the idea of selling shares, but instead of doing so, they expanded their hedging. He concluded that the risks were asymmetric: the upside potential was great, but the cost was low.

After a week of buying, Ackerman has accumulated $51 billion in nominal protection for the US investment grade bond index, $18 billion for the European investment grade bond index and $2.5 billion for the US high yield bond index. At one point, he said, he owned 26% of all investment-grade bond indices.

"imagine someone buying a 26% stake in the S & P 500," he said proudly. He promised to pay a premium of $500 million a year. But he estimates that hedging can be unhedged in up to 90 days and will cost $125 million. "We think this is a deal," he said, "rather than betting on fundamentals. He believes that investment-grade companies will not default on a large scale. Instead, he thinks the spread between Treasuries and corporate bonds will widen. In either case, it is only an assumption that investors will panic about the economic impact of the spread of the virus, and when they do so, he will benefit from it.

Just a week after Ackerman set up a hedging position, his bets began to pay off handsomely. As he had hoped, the gap between the two was widening. By March 9, his CDS portfolio was worth $1.8 billion; three days later, it was worth $2.75 billion. "I was thinking, 'Wow, unbelievable!' he said.

But the market is increasingly volatile. On March 9th, the Dow tumbled 2103 points; the next day, it rose 1167 points. Ackerman's hedging value is also fluctuating wildly. "our hedging surplus of $2.7 billion has been reduced by $800m," he said. "it is now worth $1.9 billion." Now he has a new challenge. "the problem with wearing large clothes," Ackerman said, "is that you have to take it off."

The hugely successful CDS position suddenly accounted for 40 per cent of his portfolio. Even for a fearless hedge fund manager, the volatility is too high. "it's not dangerous when we wear it," he said. But in a sense, it now accounts for 40% of the position, which has become very dangerous. Within a week, its market capitalization had reached $2.7 billion. In another week, the number may return to zero. "

In the second week of March, Ackerman said Trump was more serious about the virus. He expects Treasury Secretary Steve Steve Mnuchin and Federal Reserve Chairman Jerome Powell to take substantial action to protect capital markets. "We are not going to have a financial crisis like we did last time," Ackerman predicted.

"if the government does the right thing, am I willing to invest 40% of my portfolio in projects that could go to zero?" he asked himself. "or would I rather sell it all and buy the stock at a very low price?" three weeks later, he decided to lock in his earnings. He spent only $27 million on insurance, "and now it's up to $2.7 billion. Then we decided to quit and we sold as fast as we could. "

Easier said than done. "We have to sell CDS without affecting the market," he says. "everyone in the market knows how much insurance we have, or they think they know. This puts us in danger. "

Ackerman appeared on CNBC on March 18. At the time, Pershing Square sold half of its CDS position and reinvested $2.1 billion (part of his profits at the time, as well as $800m in cash on hand) into the stock market. Mr Ackerman said he would sell all his CDS positions on March 12, if possible. But just as it takes time to build a position, it takes seven or eight days to close the position.

His 28-minute appearance on CNBC caused an uproar. He said his intention was to send a "very optimistic message", but people did not interpret it that way. "I said, 'look, we're standing at a fork in the road. One road leads to death and destruction, and hell lies ahead. If we are indifferent to this virus, it will wreak havoc on the whole country, we will fall into a disaster that lasts for 18 months, and no company will survive. Or we can shut down the country forcefully for 30 days, but we will run out of soup in a very short time. We can reopen the economy, and everyone has to wear masks. I very much believe that the government will do the right thing, which is why I bought stocks today. "

Instead of calming people down, Ackerman's remarks scared the audience out of their wits. The Dow Jones index fell 6.5% on the day he began his speech and 10% at the end of his speech. CNBC played his most shocking remarks over and over again. Mr Ackerman is thought to be persuading the market to fall to increase the value of his CDS hedging contracts. In fact, he has pulled out of half the hedging and has been buying a lot of stocks. He said his portfolio lost money that day.

Leaving aside the fiasco of the CNBC interview, Ackerman is understandably ecstatic about the deal. He said his "timing was unassailable" and the deal closed successfully three weeks later. "We got a 26 per cent return on the [investment grade] index, but that didn't affect the market at all," he said. ". Even Dan Loeb, his occasional hedge fund rival, pays homage. "he found a very asymmetric way to hedge market risk at a very low cost," Loeb told Barron Weekly. "he seized the moment. "

Ackerman once again oversold the market. "We don't have hedging," he said. He remains bullish on the stock market and maintains a high degree of confidence in his holdings. "I think for the 10 companies we own, their share prices have risen significantly a year from now," he said.

He regretted selling a 5 per cent stake in Chipotle for $900 in March. The company's share price is now more than $1200. "the store offers amazing online service, and a large proportion of their customers turn to online takeout, and as the store reopens to allow customers to eat and pick up goods in the store, they have not lost these customers," he explained.

He insisted on owning Lowe's Companies Inc. He said it was a "huge beneficiary" of the decoration frenzy driven by the epidemic. Another position, he says, is scientific equipment maker Agilent, which has improved operating margins without layoffs or vacations. He said the company's current valuation "does not fully recognize the company's high-quality business model".

Ackerman bought and then sold Berkshire Hathaway (BRK.A). After the stock market crash in March, he has been waiting for Buffett to use his $150 billion cash reserves. But that didn't happen until the market almost fully recovered. He was still in awe of Buffett, but he decided to invest on his own. Ackerman also bought and quickly sold shares in Alphabet (GOOGL), but made a small profit. He said, "stupid".

In addition to Ackerman himself, other beneficiaries of his recent investments include teachers' pension funds in Texas and Arkansas, clients of EnTrust Global, the second-largest shareholder in Ackerman's Pershing Square, INC. Holdings. The union, which represents bakers and plumbers, also owns Ackerman's fund. As Barron Weekly writes, individual investors can invest with Ackerman.

Bill Ackerman is back in the spotlight. The investor is enjoying a turnaround that puts him back in the spotlight. There is a neglected way to share his successful investment through Pershing Square, INC. Holdings, PSH, an overseas closed-end fund for American investors.

The March deal is impossible to repeat, and the cost of insurance is already too high. Instead, "We have a lot of cash on hand," Mr. Ackerman said. He has a brand new $4 billion SPAC, and he's still looking around. He also has his own portfolio, which he sees as "ultra-high-quality companies that are reasonably isolated from what is happening in the world".

In fact, Ackerman recognises that their great success is an unfortunate consequence of the new grim reality we face: "if you have companies that are super adaptable, they will do better than when there is no crisis," he says. "the stock market represents the strength of the best, most dominant and most well-capitalized companies, while privately run, family-run mom-and-pop stores are outside the stock market, and that's what's hit hard in the United States right now. "