Ackman’s favorite investment is the Hong Kong dollar. Ackman commented that the Hong Kong dollar is “one of the most undervalued currencies in the world.”
Ackman is buying Hong Kong dollar call options, because they are relatively cheap. Bill Ackman stated that “It’s a small trade, but if it’s successful, it will be our most profitable.” He also says retail investors could outright buy the currency, or buy it using leverage.
“It is a safe bet for the average man on the street,” Ackman said. Ackman noted that although the currency position is a small position, “If it works, it’ll be far the most profitable,” Ackman said.
Ackman noted that he is not trying to imitate George Soros, who made a fortune by betting against the British Pound in 1990. “I’m not pushing Hong Kong to do anything.”
However, Ackman noted the bearish scenario:
“If China implodes, that’s bad for this trade,” Ackman said, adding that China’s weakness would hurt everyone.
He gave a 154-slide presentation on his thesis yesterday. Below are some highlights and the full document in Scribd:
Bill Ackman's Presentation on the Hong Kong Dollar: Linked to Win