Bill Ackman warns against ‘casino’ stock trading

Bill Ackman told CNBC on Tuesday that he fears the stock market may be broken, saying the rise in speculative trading is leading to wild price swings because of the amount of leverage in the system.

“Every day I feel like the markets are broken,” Ackman said on CNBC’s “Squawk Box.” “Stocks are trading at prices that make no sense to me. Yes, it’s good if you’re a long-term investor and you can buy at a stupid price. I don’t think it’s good for the country in general.”

“We went back to casino-style markets where there was 95% leverage,” he added. “I don’t think that in itself is good for the economy, for society, and it leads to massive movements in stocks.”

The founder of Pershing Square Capital Management said those same market disruptions gave the hedge fund the opportunity to score big deals.

Pershing bought Microsoftfor example, when it was hit during the “SaaSpocalypse” earlier this year, and Amazon when it fell following President Donald Trump’s tariffs, Ackman said. He also bought Alphabet when the stock moved “massively” after ChatGPT launched, he said.

But the billionaire investor fears that the rise of one-day leveraged vehicles, perpetual futures and sports betting could be dangerous for investors who treat the stock market as a way to get rich quick – an attitude that could have disastrous consequences.

“It’s good for us in the long run, ‘us’ being Pershing Square,” he said. “I don’t think it’s good for the country.”

Among the stocks Ackman is particularly bullish on are Visa And MasterCardwhich he called the “biggest” companies in the world, as well as streaming platform Netflix, in which he revealed a position in August.