Bill Ackman advises investors to stop worrying about the Iran war and to buy these two stocks

Why did Bill Ackman’s tweet coincide with the end of the quarter and trigger a surge in stock prices?

Bill Ackman, founder of Pershing Square Capital Management. Photo taken in November 2016. Image source: Bryan Bedder—Getty Images

Billionaire investor Bill Ackman posted on X platform last Sunday night, urging investors not to worry about the Iran war anymore, and recommending buying shares of Fannie Mae and Freddie Mac. On Monday, the stocks of these government-sponsored enterprises, which aim to support the mortgage market, soared significantly.

Ackman wrote: “Some of the world’s highest-quality companies are currently trading at extremely low prices. Ignore the mainstream media. This is one of the most asymmetric wars in history, which will ultimately have positive outcomes for the U.S. and globally, and we may see a substantial ‘peace dividend’.”

He then added almost casually: “Fannie Mae and Freddie Mac are ridiculously undervalued—this is the most typical asymmetric opportunity. Their stock prices could increase tenfold, and that target is within reach.”

Ackman’s tweet clearly became the sole catalyst: during Monday’s trading, Fannie Mae’s stock surged by as much as 41%, and Freddie Mac’s rose by up to 34%. This was the largest single-day increase for these stocks since May last year, when Trump proposed privatizing these two agencies.

Ackman’s statement evidently sparked strong reactions. CNN’s “Fear & Greed Index” shows that investors are currently in a state of “extreme fear.” The Iran war, now in its sixth week, continues to impact the markets: driven by tensions in the Strait of Hormuz, oil prices have soared. Iran’s semi-official Fars News Agency reported that local authorities might implement toll systems and impose a blockade on Israel; meanwhile, U.S. stocks experienced sell-offs last week and on Monday. However, for investors watching their portfolios shrink, Ackman’s message is clear: don’t panic.

Many investors seem to have unwavering confidence in his optimism. But Ackman is not a neutral observer. In fact, he is the biggest beneficiary of this trade. His firm, Pershing Square Capital Management, is the largest common stockholder of Fannie Mae and Freddie Mac, holding over 210 million shares combined. Over the past decade, he has been heavily invested in these two companies and actively pushed for their privatization.

The timing of his call also raises questions: Monday was the last trading day of the first quarter of 2026, which is particularly critical for hedge funds. The closing prices on this last trading day of the quarter will directly impact the performance reports disclosed to investors. The largest holdings saw a roughly 40% surge on this day, which can be considered “quite a coincidence.”

Ackman has previously engaged in similar operations. On December 30, 2024, the penultimate trading day of the fourth quarter, he posted a detailed investment thesis calling government-sponsored enterprises (GSEs) as his best investment strategy for 2025. The post received 4.9 million views and prompted similar sharp rises in related stocks.

However, the valuation gap Ackman pointed out is indeed eye-catching. Last year, Fannie Mae reported a net profit of $14.4 billion, and Freddie Mac $10.7 billion. Before Monday’s price increase, the combined market value of these two companies was only about $10 billion, meaning their annual profits exceeded their market cap by more than twice.

Michael Burry, the investor famous for “The Big Short,” also expressed support for Ackman, replying to his post: “I must emphasize, such a situation is extremely rare in the current market environment.” Burry further discussed the U.S. housing market in another post, stating that Fannie Mae and Freddie Mac have been under government conservatorship for a long time, which is a major reason for the housing supply shortage. He also attributed the issues to artificially suppressed interest rates and the $6 to $7 trillion in large-scale cash stimulus injected by the U.S. government during the COVID-19 pandemic.

Burry wrote: “The problem is caused by the government, and current policies still hinder the free market from solving the problem on its own, including allowing profit-driven companies to operate under government-backed, zero-risk financing.”

The bullish logic around these two GSEs has been clear: the market bets that the Trump administration will privatize Fannie Mae and Freddie Mac through IPO, possibly by the end of this year. Since the government took over these companies in 2008, this expectation has repeatedly appeared but has never materialized. In September 2025, when privatization was most anticipated, driven by Ackman and his supporters, Fannie Mae’s stock briefly hit a high of about $15.30. But even after Monday’s rally, both stocks are still down nearly 60% from that peak. At the November ResiDay housing conference, White House housing chief Bill Pulte said a decision on IPO would be made by the end of Q4 2025 or early 2026, but it has yet to happen.

Critics also argue that rushing privatization could introduce new risks. For example, UCLA economist Wesley Yin pointed out that this process could raise borrowing costs and recreate conditions that led to the “Great Recession,” allowing profit-seeking companies to access government-backed, zero-risk financing. He questioned whether the government would really risk repeating past mistakes.

In a post last December, Ackman also acknowledged the uncertainty with more cautious legal language, writing: “The ultimate outcome remains highly uncertain, and if you choose to invest, you should limit your position to an amount you can afford to lose.”

But by last Sunday night, such warnings had disappeared. Ackman wrote: “Ignore the naysayers.” (Fortune China)

Translator: Liu Jinlong

Proofreader: Wang Hao

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