Bill Ackman told CNBC on Tuesday he worries that the stock market is broken, saying the rise of speculative trading is leading to wild price swings thanks to the amount of leverage in the system.
"Every number of days, I feel like markets are broken," Ackman said on CNBC's "Squawk Box." "Stocks trade at prices that make no sense to me. Yes, it's good if you're a long-term investor and you can buy at a stupid price. I don't think it's good for the country generally."
"We're back to the casino-type markets when there was 95% leverage," he added. "I don't think that's inherently good for the economy, for society, and it's leading to these massive moves in stocks."
The founder of Pershing Square Capital Management said those same dislocations in the market have given the hedge fund the opportunity to snag big bargains.
Pershing bought Microsoft, for example, when it was pummeled during the "SaaSpocalypse" earlier this year, and Amazon when it fell following President Donald Trump's tariffs, Ackman said. It also bought Alphabet when the stock moved "massively" following ChatGPT's launch, he said.
But the billionaire investor worries that the rise of one-day leveraged vehicles, perpetual futures and sports betting is dangerous for investors who are treating the stock market as a get-rich-quick scheme — an attitude that could have disastrous consequences.
"It's good for us long term — 'us' being Pershing Square," he said. "I don't think it's good for the country."
Among the stocks Ackman is especially bullish on are Visa and Mastercard, which he called among the world's "greatest" businesses, as well as streaming platform Netflix, in which he disclosed a position in August.