This article comes from WeChat public account: Tencent Finance (ID: financeapp) , author: Ji Zhenyu

PSC issued a statement on its official website, announcing that it has withdrawn from the previous round of hedging operations and received an investment income of US $ 2.6 billion. The cost of this hedging transaction is (Including commission) is $ 27 million. In terms of this deal alone, Ackerman achieved close to 100 times the return on investment in less than a month.

During this round of turbulence in the US stock market, some people suffered heavy losses and blood flowed. Of course, some people have successfully used panic to follow the direction of the market and make their own profits. Hedge fund Pershing Square Capital (PSC) Founder Bill Ackerman (Bill Ackman) Is one of them.

On March 25, PSC issued a statement on its official website, announcing that it had withdrawn from the previous round of hedging operations and received an investment income of US $ 2.6 billion. The cost of this hedging transaction was (including commissions) is $ 27 million. In terms of this deal alone, Ackerman achieved close to 100 times the return on investment in less than a month.

Pershing Square Capital issued a statement announcing the end of a round of hedging operations

Akman ’s “God operation” can be said to be the result of a series of perfect combinations from the implementation and execution of strategy to the emotions affecting the market and the timing of entering and exiting. strong>, we can briefly review how he did it:

First, at the end of February, when credit spreads in the market (credit spread) were at about historical low levels, Ackerman Large purchases of investment-grade and high-interest credit spread products. Because credit spreads are at very low levels, the possibility of rising in the future is far higher than the possibility of falling.

In short, the credit spread is the difference in the yield of different bond products. When the credit status of a bond deteriorates, investors require more compensation for the return, so their yield requirements will be higher, and the credit spread With the expansion, the credit spread products that Ackerman is betting on will be profitable when the market’s credit situation becomes worse and investors are concerned about the credit situation.

Ackerman cleverly used the impact of the development of the epidemic in the United States on credit markets. At the end of February, the U.S. crown virus virus epidemic has not yet fully erupted, market sentiment is stable, investors have no fear of credit conditions, and credit spreads are at historical lows.

Then things changed. The epidemic is growing rapidly in the United States, with the number of confirmed infections and deaths rising, and the response measures in the United States escalating, from the state of emergency declaration to the announcement by more and more states”Isolation in situ” reduces personnel intensity and expands the scope of shutdown and production.

The market began to panic. The US stock market broke 4 times in 10 trading days. In less than a month, the market fell from a historic high to a bear market.

Ackerman didn’t miss the opportunity to show his face at this time. On March 18th, in an early morning, he accepted an interview with CNBC, the most powerful American financial television, for nearly half an hour.

In the interview, Ackerman on the phone showed extreme pessimism. His voice was trembling, wailing, and even crying. He shouted loudly that the current situation is “Hell is here.” Will end. ”

Under his series of extremely pessimistic remarks, the market also fell sharply “without expectations”. The day the S & P 500 index once again triggered a fuse, closing down more than 5%, the Dow fell below the 20,000-point mark. The panic in the market almost reached its peak, and Ackerman’s interview successfully brought another blow to the already overwhelmed market.

As the market panic spread, credit spreads started to soar. As of the week of March 20, the Morningstar Investment Grade Credit Spread Index surged an average of 299 basis points to 396 points, and the High Yield Bond Index rose an average of 643 basis points to 999 points.

As can be seen from the figure above, even so, the current credit spread level is still much lower than