Billionaire hedge fund manager Bill Ackman isn't a household name like Warren Buffett, but he's done very well for himself through his Pershing Square Capital Management Fund. Thanks to savvy investments in large-cap companies, his net worth more than doubled in 2024, from $4.3 billion to an estimated $9.2 billion.
Unlike Buffett, Ackman keeps only a small number of positions in his hedge fund. It currently holds stocks in just 10 companies! In fact, more than 62% of Pershing Square's entire $15 billion portfolio consists of just four stocks.
Clearly it's worked out for Ackman. Should you copy him and try this approach, too?
Image source: Getty Images.
What Ackman's fund owns
Ackman's biggest holdings right now are:
- Brookfield Corp. (BN 1.70%), 18.2% of portfolio
- Uber Technologies (UBER 0.92%), 15.9% of portfolio
- Amazon (AMZN +3.20%), 14.3% of portfolio
- Alphabet (GOOG +4.94%)(GOOGL +4.79%), 13.8% of portfolio
NYSE: BN
Key Data Points
Put together, that's 62.8% of his portfolio, which is heavily tilted toward big tech. His fifth-largest position is Meta Platforms (META +2.27%) at 11.4% of the portfolio. That may not be the right strategy, especially for a novice investor.
Image source: Getty Images.
Should you be playing the odds like Ackman?
Beginner investors will want to have more diversification in their portfolio than Bill Ackman does to maximize their chances of picking an outperformer. If you're a long-term investor, an outsized portion of your overall gains are going to come from a handful of big winners in your portfolio. That's why we recommend holding at least 25 stocks.
But if you've been investing for a long time, four stocks might eventually make up the bulk of your portfolio's value by virtue of being your biggest winners. At that point, you should probably check in on those companies to see if you think they still have growth potential. If not, you may want to reallocate some of those funds to tomorrow's winners.
