Hedge Fund News: Bill Ackman, Warren Buffett, Bridgewater Associates

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Ackman’s Pershing Square Holdings gains 5.8 percent in August (Reuters)
Billionaire investor William Ackman‘s portfolios climbed nearly 6 percent in August, boosted by strong gains at drug company Valeant Pharmaceuticals International Inc where changes that the hedge fund manager has helped push for appear to be instilling new confidence. Pershing Square Holdings, one of the hedge fund’s portfolios, climbed 5.8 percent last month, shrinking its loss for the year to 14.3 percent, an investor in the fund said. In March the fund had been down 25.6 percent. Valeant gained roughly 39 percent in the last month. A year ago, Valeant’s stock began cratering amid questions about the company’s business and accounting practices and its stock price is still down 87 percent in the last 52 weeks.

Bill Ackman, Pershing Square Capital Management, Herbalife

Dow Chemical’s Stock Action Works in Warren Buffett’s Favor (The Wall Street Journal)
Dow Chemical Co.’s shares are showing clear signs of tinkering, according to an analysis by a Yale University professor. The shares come within cents of an important threshold—$53.72—pretty often, but they have closed above that level so rarely that there’s less than a one-in-a-thousand chance that​it’s happening randomly, according to the analysis. If the stock closes above $53.72 enough times, Dow has the option to buy back $3 billion worth of preferred shares from Warren Buffett’s Berkshire Hathaway. The Wall Street Journal reported last week that people familiar with the matter say that executives at Dow believe someone is selling its stock short—or betting that its price will fall—to keep it from rising above $53.72.

The World’s Biggest Hedge Fund Expects A Bust In China (Business Insider)
The world’s biggest hedge fund firm thinks that China is preparing for a bust. Ray Dalio‘s Bridgewater says that China has experienced an “unsustainable buildup of credit,” which is “typical of debt boom and busts,” according to a private note to investors viewed by Business Insider. “This rapid expansion in credit looks like it has created significant vulnerabilities in the Chinese financial system at a time when the economy is still near the front end of a material loss cycle,” the note added.

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