Pershing Square's Ackman warns leveraged trading is distorting U.S. stock markets

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Ackman warns on leveraged trading

Highlights

Ackman warns that leverage from one-day vehicles and perpetual futures amplifies volatility, causing U.S. stock prices to behave irrationally.
Pershing Square capitalized on market dislocations by buying Microsoft during the 'SaaSpocalypse', Amazon after Trump tariffs, and Alphabet post-ChatGPT volatility.
Ackman is especially bullish on Visa, Mastercard, and Netflix, signaling large-cap opportunities amid rising systemic risk and speculative retail trading.

Ackman flags leverage-driven volatility

As reported by CNBC, Pershing Square Capital Management founder Bill Ackman says the stock market is increasingly behaving like a casino, with speculative trading and leverage pushing share prices to levels he believes often make little sense.

Ackman says he regularly feels markets are broken, arguing that extreme price moves are being amplified by one-day leveraged vehicles, perpetual futures and behavior shaped by sports betting. He says this setup may help disciplined long-term investors buy quality companies at depressed valuations, but is not healthy for the country or society.

He warns that a get-rich-quick mindset among investors could end badly, adding that the return of what he describes as casino-style markets with very high leverage is contributing to massive swings in individual stocks.

Portfolio opportunities and market implications

Those dislocations have also created openings for Pershing Square. Ackman says the hedge fund bought Microsoft during the "SaaSpocalypse" earlier this year, added Amazon after the stock fell following President Donald Trump's tariffs, and bought Alphabet after a sharp move linked to ChatGPT's launch.

Among the stocks he says he is especially bullish on are Visa and Mastercard, which he describes as among the world's greatest businesses, along with Netflix, where he disclosed a position in August. His comments point to a market environment in which volatility is reshaping entry points for major investors while also raising concerns about systemic risk and retail speculation.

Our earlier article on the S&P 500’s push toward 8,000 explained how the index’s advance has been heavily supported by AI-linked megacaps, even as higher oil prices, elevated Treasury yields, and political uncertainty raised the bar for Q3 earnings. We also highlighted weakening market breadth and growing concentration risk, with much of the benchmark’s performance hinging on a relatively small group of market leaders.

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