You know what’s not a great feeling? Losing money. You know what’s really not a great feeling? Losing $4 billion – yup, four billion big ones – on a single investment.

“Clearly, our investment in Valeant was a huge mistake,'' said Ackman after selling his shares in 2017 – and if anything he’s understating just how bad his bet on the pharmaceutical company was. Ackman, convinced Valeant’s management team were just the tonic, clung on to his shares through PR disasters, dodgy accounting, and a stock price crash in the hope that he could turn the company around.

But he was wrong.

There were some silver linings. Bill says he now knows that companies can’t always come back from a huge stock crash, thanks to the devastating effect on morale and reputation; and he’s learned that even a talented team of suits with a strong track record can make poor decisions.

But after Herbalife and Valeant, Ackman’s record was looking pretty shaky. A 0.7% loss over 2018, while market-beating, meant that his firm had failed to turn a profit for four years in a row. Performance like that started to scare off Ackman’s investors – by the end of the year, he was managing just 30% of the cash he had been three years before.

So his career’s over, right? Does Bill really seem like the kind of guy to give up that easily? The first half of 2019 saw Ackman mount the most impressive comeback since Michael Jordan: between January and July, his fund increased in value by a whopping 45%, versus the US stock market’s comparatively middling 17%. And not a Space Jam in sight...

 When faced with a tough basket, Ackman took a step back. He realized that he’d lost focus: he was spending too much time trying to keep investors happy and stop them from leaving, instead of concentrating on actually making investment decisions.

“Little breaks over the course of the day really interfere with your ability to dig in.” – Bill Ackman

Restructuring and streamlining the company has “freed up substantial time and renewed focus”. The lesson here? When things are getting overwhelming, cut back and spend all your energy on what really matters.

Ackman’s other big change was to stop raising money for his private funds, instead concentrating on his publicly traded pot. Investors can’t take money out of this fund – when they want to cash out, they just sell their stake on to someone else – so Ackman doesn’t have to worry about withdrawals anymore.

That allows him to focus on investing for the long term: his first love. To give one example, he can act as a buyer when the market’s crashing – snapping up stocks at a discount and then waiting years for things to recover. If, like Bill and Warren Buffett, you too can afford to invest without getting rattled by short-term price swings, then you could find yourself doing nicely.

A perfect example of this is one of Ackman’s most recent stock picks: Starbucks. It’s not a particularly sexy company, and nor is it a contrarian bet – but he thinks his $1 billion stake could more than double in value over the next three years. Although the chain’s facing more competition, Ackman reckons its ultra-strong brand will see it grow fast in an increasingly bean-buzzed China.

The takeaway: Focus and patience are key when investing.