1/Today in "talk your book Tuesday" Ill share a special situation trade I have on. "Oh why not your macro stuff?" well 1-I have shared a bit of that lately and 2-I charge money for that and 3-macro is a flexible mandate so in the end it is the best risk/reward trades I can find

2/PSH-Pershing Square Holdings
PSH is a closed end fund traded on the Euronext and LSE.
PSH is run by that one guy who got in a fight with Uncle Carl that one time in a top 5 moment in CNBC history.
PSH is basically a "permanent capital" version of Ackmans hedge fund

3/Because it is a CEF-closed end fund, it can trade at a premium or a discount to its NAV-net asset value. So you can value the holdings of the fund and they can be above or below the price of the exchange traded CEF.

4/it will probably come as no surprise to you that PSH is currently trading below its NAV right now. I mean people do sometimes buy a CEF at a premium but those people are not smart.

Anyways here is a chart of PSH and the PSH NAV

5/here is a chart of the -29.75% discount. Yes, the discount has grown a lot the last 5ish years. But 1-Ackman & Co are trying to narrow the disc and 2-it looks like since the March bottom it has turned/changed trend.

6/they have a website with annual reports, updates, pricing, and other good info. If you are interested in this you should actually read some docs. Yeah you all claim to read all your holdings 10k's and stuff but most of you dont. Do it this time. https://pershingsquareholdings.com/company-reports/financial-statements/

7/Ackman is no WarrenB, or WarrenG for that matter, but he is a legit good investor who is back at new highs and is worth reading. So go do it. For real you will like it.

8/PSH is doing several things to narrow its discount. They have been doing a massive buyback program. So far they have bought back a little over 19% of shares outstanding.

9/PSH is very close to being included in the FTSE 100. This would go a long ways to closing the valuations gap. There are hard set rules and they almost qualify and are working to ensure inclusion. Some might call this a catalyst. idk what you call it though.

10/whatever else Ackman is, he is a really good consumer analyst. Consequently would it surprise you to see that the bulk of the holdings are made up of great consumer names? SBUX, LOW, CMG, HLT, etc. Not a bad book to own at a -30% discount.

Oh and PSTH....

11/before we look at PSTH also worth noting is that PSH pays out a dividend. It is not going to make you rich but they pay a dividend so that people have an incentive to buy the stock and narrow the discount. Not earth shattering but a good faith showing.

12/read the reports. Ackman & Co really want to narrow the discount gap because they own a fton of this thing. If Bill decided tomorrow to retire he could liquidate the port and cash out earning 30% in an instant on his PSH. lol no for real.

13/but what about PSTH? PSTH is the Ackman SPAC. Yeah I know SPACs are supposedly all trash or whatever BUT 1-they are not all trash and 2-Ackman really doesnt want his SPAC to be trash. REALLY REALLY REALLY doesnt want this to be the case.

14/because you wont go read the annual report, not enough people ever do this, here are screen shots for the bulk of the PSTH discussion.

He is not taking the ridiculous promote of other SPACs. He is not trying hard to screw investors. Weird but most SPACs try hard at screwing.

15/so PSH owns a bunch of warrants in PSTH. Could end up owning like 5.95% of the company. The warrants kick in 20% above the IPO price. It IPO'd at $20 so the warrants are itm at $24.

Guess what security is above $24 right now? If you said PSTH you are correct.

16/so go read the stuff and do your modeling and DD. But the case is mostly simple. A 30% discount with one of the great investors of our era. Multiple potential catalysts to unlock this 30% discount. You can go to cocktail parties with your mask on and say you have $ with Ackman

17/I hope you like this installment of Talk Your Book Tuesday. I would have put this out a few hours ago but I took a nap and it went from the 1hr I thought it would be into being a 4hr nap that I guess I needed. I feel great now btw.

Trade so hard,
xoxo

18/P.S. here is the music video to accompany this thread. How WarrenB has never made his own version of the WarrenG song for the shareholder meeting is beyond me. But in this biz Ackman is as gangster as WarrenB so the song is fitting to all of it

19/gangster? you are asking. Yes. Did you see him come on TV and cry to help out his book? Would you have done this? No, you would not have. Also because Im now posting WarrenG songs here is a top 10 song ever.

20/I will stop. Have a great night.

xoxo