Why are irrational market dislocations occurring more frequently today than earlier in your career?
Founder & CEO at Pershing Square Capital Management
Two structural market shifts drive this heightened volatility. First, the massive growth of passive index funds has effectively shrunk active trading float, amplifying the price impact of marginal buyers and sellers. Second, the dominance of leveraged multi-manager quantitative platforms and short-term hedge funds creates violent swings whenever quarterly corporate earnings deviate slightly from consensus. These structural dynamics frequently hand patient, permanent-capital investors the chance to purchase world-class companies at deep discounts.
This answer is part of a full interview with Bill Ackman, Founder & CEO at Pershing Square Capital Management.
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