When Bill Ackman sold what remained of his disastrous investment in Valeant Pharmaceuticals earlier this month, he said it was because it was taking up too much of his time and too much of his conversations with his investors.

He still had to pen more than 1,000 more words on the subject, though, in his annual letter to shareholders of his publicly-traded investment vehicle, Pershing Square Holdings, which has just published the letter in its annual report.

And among those new, and presumably final words: the hardest word of all.

While I and the rest of the Pershing Square team have suffered significant losses from this failed investment as we are collectively the largest investors in the funds, it is much more painful to lose our shareholders’ money, and for this I deeply and profoundly apologise.

Mr Ackman and his funds lost close to $4bn on Valeant, and his annual letter is almost entirely given over to “lessons” from the “huge mistake”.

What are those lessons?

  1. Just because a company’s management has generated high rates of return from acquisitions in the past does not guarantee it will do so in the future, so don’t assign any value to that ability.
  2. Some companies’ value can be dramatically affected by politics. Take that into account.
  3. Even great managements can make big mistakes.
  4. A collapsing share price can feed on itself, since it hits morale and a company’s ability to recruit talent.

The task now is to “repair the damage” from the Valeant debacle, Mr Ackman said.

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