Ackman's 4-Hour Wachovia Bet

A story about how Bill Ackman made a massive investment decision during the 2008 financial crisis that doubled his money in a week.

"During the '08 crisis, when banks were failing and Bear Stearns had collapsed, Wachovia was on the brink. I spent 4 hours looking at the business of Wachovia and came to a decision that the panic was overblown and that Wachovia would be saved. Wells Fargo, which ended up buying Wachovia, was far healthier than the market believed in that moment of panic.

I bought 178 million shares at $3.15 a share, spending $560 million after just 4 hours of thinking. My estimate was that it would be worth more than double that. The next week, Wachovia was bought at about $7 a share, so I basically doubled $500 million in a week.

It was a moment when everybody else was running out screaming, but I stayed calm, looked at the situation, and assessed the risk-return differently. When there's trouble, there's opportunity."