Matt Levine, Columnist

Bill Ackman Can Tweet His New Fund

Also insurers buy mortgages, Deutsche Bank prefers larger fees and an LLM learns Excel.

July 16, 2024 at 6:21 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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If you are a US equity fund manager, your job is to buy stocks listed in the US. Which stocks should you buy? Well, stocks you think will go up, good companies, companies with good managers and good businesses, that sort of thing.

Here’s a stock called SPY. It was up 24% last year; it had a rough 2022, but it was up double digits each of the three previous years and has a long track record of pretty good returns. Should you buy it? Probably not, no. SPY is the SPDR S&P 500 ETF Trust, an exchange-traded fund that owns the stocks in the S&P 500 stock index. Your job, as a fund manager, is to pick good stocks, not to just buy someone else’s index fund.