Valeant Pharmaceuticals International Inc.

[specuvestor]

VBs know why I think Ackman deserve it but it's sad to see Sequoia Fund go down with it together with the "name" of value investors, though William Ruane legacy is cemented

What's unsaid is whether Sequoia is a precursor for Berkshire when Buffett and Munger is no longer around

Bill Ackman documented down his lessons learnt from the 4bil Valeant mistake in PSH AR16. His main takeaway was a misjudgement on Mgt abilities and their previous superior record was not good enough to guarantee future outperformance or guard against potential variability (regulatory laws, downward spiral of morale etc).

On a personal basis, i thought the very high level (simpler) lesson learnt would be simply to have the ability to take a loss (either admit Mr Market or the many other equally brilliant minds taking the opposite side of the trade, may be right). On hindsight, if he didnt double down via options to try to recoup losses, he would only lose about half what he finally lost.

Psychologically, it isnt easy to take losses (loss aversion or ego, whichever it may be) and so as much as for all of Bill Ackman's mental superiority, i reckon this is a good example that emotional makeup is similarly an essential ingredient for investment success.

Ackman is 'profoundly' sorry for US$4b Valeant 'mistake'
http://www.businesstimes.com.sg/consumer...nt-mistake

PSH AR16: https://assets.pershingsquareholdings.co....31.16.pdf