Matt Frankel, The Motley Fool

Thu, Jun 26, 2025, 3:22 AM4 min read

• Despite being one of the most successful hedge fund managers, Bill Ackman has a surprisingly concentrated portfolio.

• Expert investors are divided on the concept of diversification, but Ackman clearly isn’t a believer.

• It depends on how comfortable you are with certain types of investments.

• These 10 stocks could mint the next wave of millionaires ›

One of the most popular ways investors get ideas for stocks to take a closer look at is by examining what stocks billionaires own.

Hedge fund manager Bill Ackman is a unique case, because while most billionaire money managers maintain portfolios of dozens of stocks, Ackman doesn't. In fact, you can count the number of different stocks Ackman invests in on two hands.

With that in mind, here's a closer look at Ackman's stock portfolio and whether it's as important to maintain a diversified portfolio as you may have heard.

Bill Ackman manages the Pershing Square Capital Management hedge fund, which has roughly $12 billion worth of stocks in its portfolio. But it often surprises investors that the entire portfolio is invested in just 10 stocks, two of which are relatively small investments.

In fact, about half of Ackman's capital is invested in just three stocks: Uber (NYSE: UBER), Brookfield Corporation (NYSE: BN), and Howard Hughes Holdings (NYSE: HHH).

In a nutshell, Ackman is very thorough in his research and only puts money into stock in which he has a very high conviction. He will regularly release elaborate presentations to investors detailing the rationale behind each trade and has historically produced excellent long-term results. Since the fund's inception in 2004, Ackman has generated 15.9% annualized returns for his long-term investors.

Diversification can be a good thing. Of course, putting too much of your money into any single stock can result in large swings in your portfolio, and the same can be said about investing too much in any single industry.

On the other hand, it can make sense to not diversify if you know a certain industry or type of stock very well. For example, if you understand artificial intelligence deeply and are confident in your abilities to evaluate AI stocks, it can make sense to have more of your money concentrated in that area.

It can also make sense to not diversify if you don't understand certain industries well. Warren Buffett tends to avoid technology stocks, for example.

Speaking of Buffett, he has a famous quote on diversification, saying that it is "protection against ignorance," adding, "It makes little sense if you know what you're doing." Other experts use the term "deworsification" to describe overdiversifying a portfolio beyond what is necessary.