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What Gordon Gekko Could Teach Bill Ackman

By Chris Hill and Tim Hanson – Jul 24, 2014 at 8:53PM

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Why it's never good to overpromise and under deliver.

On Thursday's Market Foolery, host Chris Hill and Motley Fool Funds analyst Tim Hanson shake out the emotional conviction of Ackman's attack on Herbalife (HLF 1.22%).

Bill Ackman is clearly against Herbalife. In December, Ackman announced he staked $1 billion on an Herbalife short, and on Tuesday, Ackman presented a three-and-a-half hour presentation that was supposed to be "the most important presentation of [his] life." On Tuesday, shares of Herbalife jumped instead of withered. Tim looks at overpromising and under delivering or under promising and over delivering. Chris remembers Gordon Gekko's maxim about investing in Wall Street: "Don't get emotional about stock." Chris thinks Ackman has become far too emotional about this company.

Tim dissects Ackman's presentation, and wonders what Ackman's lengthy speech actually explained. He also wonders if Ackman's investigation is falling toward a confirmation bias. Chris looks at conviction in businesses, and how convictions can be helpful in a company; yet he questions if Ackman's emotions have hindered him.

Chris Hill has no position in any stocks mentioned. Tim Hanson has no position in any stocks mentioned. The Motley Fool has the following options: long January 2016 $57 calls on Herbalife. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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