Bill Ackman is bullish on stocks for 2021, but has a hedge position for a 'tragic' end to 2020

Published Thu, Nov 19 202012:49 PM ESTUpdated Thu, Nov 19 20202:03 PM EST

(This story is for CNBC Pro subscribers only.) Billionaire hedge fund manager Bill Ackman, who made big money betting against the markets earlier this year, said he's optimistic about a recovery in 2021, but investors will need to get through a "tragic" year-end first. "We think the next couple of months unfortunately are going to be tragic and very difficult for the globe and for our country in particular," Ackman said on a Pershing Square quarterly earnings call Thursday. "We have basically a 9/11 every day." The U.S. is grappling with a worsening coronavirus pandemic heading into the holiday season. A record number of new cases have led to new restrictions in several states, which put pressure on stocks recently after their record-setting run. In February, Ackman initiated a large position betting on a sell-off in the markets, and the hedge fund manager came on CNBC in March warning that "hell is coming" and imploring the White House to shut down the country for a month. He made billions of dollars from the bet. Now Ackman is hopeful for an economic rebound next year on the back of the positive developments on the vaccine front, but he thinks it's "prudent" to have some protection against potential downside into the end of 2020. "We are actually pretty bullish on 2021," Ackman added. "The progress of Moderna, Pfizer and the other vaccines suggests that in relatively short order the world will be vaccinated... The second half of next year is when things will start to return to normal." "We are happy to be very much long in our equity exposure, but we do think having a decent size hedge, a very lost cost hedge is prudent." Ackman said he recently rebuilt a hedge in U.S. and European investment-grade credit. "Spreads have come all the way back to where they were when we initially put on the original hedge... Spreads are pretty much close to all-time tight levels," Ackman said. SPAC deal on track The billionaire investor also spoke about his historic special-purpose acquisition company Pershing Square Tontine Holdings , which was the largest SPAC deal ever when it debuted in July. Ackman said he's on track to announce a target company in the first quarter of 2021. The SPAC has a market cap of about $4.6 billion. The SPAC may target the so-called "Mature Unicorns," those more developed privately financed companies valued at more than $1 billion, according to a previous filing.

Bill Ackman, founder and CEO of Pershing Square Capital Management.

Adam Jeffery | CNBC

(This story is for CNBC Pro subscribers only.)

Billionaire hedge fund manager Bill Ackman, who made big money betting against the markets earlier this year, said he's optimistic about a recovery in 2021, but investors will need to get through a "tragic" year-end first.

"We think the next couple of months unfortunately are going to be tragic and very difficult for the globe and for our country in particular," Ackman said on a Pershing Square quarterly earnings call Thursday. "We have basically a 9/11 every day."