Trade Like an Activist Hedge Fund Manager

Bill Ackman of Pershing Square Capital Management has been right some many times this year it's scary.

He predicted the demise of the monoline bond-insurers, such as MBIA(MBI Quote) and Ambac(ABK Quote), well before the credit crunch really hit the economy. Ackman began shorting shares of MBIA north of $60 and Ambac north of $75; MBI now trades at $6 and Ambac at 76 cents.

Ackman also owned 25% of Longs Drugs(LDG Quote) back in mid-September. Within three weeks of Pershing Square's, purchase, Longs was bought out for a nice 30% premium.

So when Pershing Square, an $8 billion-plus activist hedge fund that has had returns of 40% or more over the past two years, filed its latest equity holdings, we paid close attention. ...