Bill’s a real giver – not only has he pledged to donate more than half his wealth to good causes, but he’s also more than willing to share advice. He has shared top tips for investors in his speeches and writings: here’s a selection of the best.

1. Diversify your portfolio – but not too much. “For an individual investor you want to own at least 10 and probably 15 and as many as 20 different securities. Many people would consider that to be a relatively highly concentrated portfolio.” Putting all your cash in one company is risky, but you shouldn’t spread yourself too thin: if you do, it’s hard to research and understand all your portfolio companies.

2. Look for businesses with “moats”. “You want to buy a business that is going to exist forever, that has barriers to entry, where it’s going to be difficult for people to compete with you… You want a business where it’s hard for someone tomorrow to set up a new company to compete with you and put you out of business.” If you’ve managed to find a company that’s not selling a commodity, but something truly unique, then it’s much more likely to be successful: simply because it’s harder for others to compete with it and drive its prices down. Coca-Cola, a favorite of both Ackman and Buffett, is a great example of this.

3. Seek unappreciated value. “You want to invest at a reasonable price.” It’s not just about finding a good company – it also has to be valued sensibly. Ideally, you want “high-quality businesses at a price that is not reflective of the intrinsic value of the business as it is, and certainly not reflective of what the intrinsic value would be if it were run better.” Finding a company with potential that others aren’t recognizing could be a golden ticket.

4. Stay strong. “You've gotta just accept the fact that what you own can go meaningfully down in value after you buy it, that doesn't actually mean you've made an investment mistake – it's just the nature of the volatility of the stock market.” Ackman’s all about ignoring short-term stock market fluctuations, instead preferring to focus on the long run – in the end, he thinks every company gets valued fairly. As for how to stay strong: “do your own research” and you might be able to ignore the haters.

Ackman’s also given a bunch of advice for how to choose an investment manager – as one himself, he knows what to look out for. Here are his tips:

• “You want someone who has an investment strategy that makes sense to you. You want to understand what they do and how they do it.” It’s never good to not know what’s going on with your hard-earned cash – if you don’t, you can’t measure success.

• “You want someone with a reputation for integrity.” Would you lend five bucks to someone you didn’t trust? If not, why would you give them thousands to manage?

• “You want to invest in someone who has a long-term track record… who has a consistent approach.” Past performance isn’t a guarantee of future success, but it can be a helpful indicator that the manager knows what they’re doing. And a consistent approach, rather than constantly jumping to what’s in vogue, means they can improve over time and better ignore market irrationality.

• “You want someone who's investing the substantial majority of their own money alongside yours. You want someone whose interests are aligned with yours.”

Ackman’s best piece of advice, though?

"In the investing business, you need a high degree of confidence, but you also need a high degree of humbleness... humbleness comes from mistakes." – Bill Ackman

We’re pretty sure the word Bill’s looking for is “humility” – which just goes to show that even the best investors always have more to learn.

Key points:

🔹 Bill Ackman is an activist value investor who looks for cheap companies and then tries to use his influence to improve them. His main fund is publicly traded 🔹 Contrarian bets can be hugely valuable – as long as you fully assess the risks 🔹 Be wary of any investments that rely on political willpower: it’s an unpredictable world out there 🔹 Focusing on investing for the long term, without unnecessary distractions, is key 🔹 Don’t diversify too much, look for defensible businesses, and find a money manager who’s consistent and has your back