Tags: William | Ackman | Dip | Houses

Ackman: Double Dip Unlikely, So Buy Houses Now

Tuesday, 26 Jan 2010 11:16 AM

Investors should buy houses right now since there is no chance of a double-dip recession, says William Ackman, managing partner at Pershing Square Capital Management.

The global economy is rebounding, he says.

“Housing is recovering. I think the economy is stabilizing,” says Ackman, an activist investor.

With housing prices down and low interest rates, Ackman told CNBC it is an “attractive” time to buy a house.

Within the next five to 10 years, values of homes will rise, he said.

Ackman said he believes it is unlikely for a double-dip recession to occur in 2010.

Many businesses such as Kraft, Nestle and ADP are very “resilient,” even if they are affected by the recession, he said.

“I’m more bullish than most on the economy,” Ackman said.

Billionaire investor Warren Buffett prompted Pershing Square to buy shares of Kraft, Ackman said. Buffet’s Berkshire Hathaway is the largest shareholder of Kraft.

Buffett said "Kraft shouldn’t issue too many shares — that was the big risk. Once he said that, we thought the likelihood of that happening was very small and we started building our stake in the company,” Ackman said.

Kraft is paying a good price for the Cadbury deal and conducted an “excellent job,” he said.

However, the World Bank said a double-dip could occur if the private sector continues to save money, Dow Jones reported.

Governments can not rely on boosting the economy with just another stimulus, said Hans Timmer, director of the World Bank Prospects Group

“Instead of just demand stimulus, governments should focus on measures that can actually increase productivity in economies, because that is ultimately the way the world economy will grow again. This is a crisis that was so deep for so long, that inevitably it will lead to structural changes. The world will never be the same again,” he said.

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Investors should buy houses right now since there is no chance of a double-dip recession, says William Ackman, managing partner at Pershing Square Capital Management. The global economy is rebounding, he says. Housing is recovering. I think the economy is stabilizing, ...
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