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Note: In Confidence Game, Bloomberg reporter Christine Richard shows how the famed activist seemed crazy but made $1 billion.
By Amanda Cantrell
Confidence Game: How a Hedge Fund Manager Called Wall Street's Bluff
By Christine S. Richard
John Wiley & Sons, Inc.
$27.95
Bill Ackman's short position in the Municipal Bond Insurance Association may go down in history as one of the great Cassandra trades of the credit crisis. Like Cassandrawho, according to Greek mythology, made dire predictions that were always accurate but universally ignoredAckman's warnings went unheeded for years.
Unlike Cassandra, he eventually got closurebut not without enduring years of scrutiny, regulatory investigations and performance losses.
Ackman, the founder of activist hedge fund Pershing Square Capital Management, released a negative research report on MBIA in 2002 at his first hedge fund firm, Gotham Partners. He soon learned that attacking a triple-A-rated companyespecially one that could threaten the stability of the entire financial system if its rating were downgradedwould be costly. Far...