UPDATE 1-Bill Ackman says short-term money driving market volatility

(Adds more comments from Ackman, views on politics, paragraphs
3-8)
By Edward Krudy
NEW YORK, Oct 6 (Reuters) - William Ackman, head of hedge
fund firm Pershing Square Capital Management, said on Tuesday
that financial market volatility was being driven by short-term
money without regard to long-term economic fundamentals and that
Valeant Pharmaceuticals International Inc (NYSE:VRX) VRX.TO was the most
undervalued stock among his top holdings.
"There is a huge amount of money that moves without regard
to long-term economic fundamentals," said Ackman at a Bloomberg
investor conference in New York. Ackman added that the
volatility was creating opportunities for long-term fundamental
investors looking to pick up undervalued stocks.
Ackman cited leveraged exchange traded funds, or ETFs,
high-frequency trading and other types of leveraged strategies
as factors that have contributed to market volatility. That has
compounded investors' fears and led to more selling in markets,
he said.
Pershing Square Holdings fund is nursing a 12.6 percent loss
for 2015, an investor who received Ackman's investment letter
said last week, marking a dramatic reversal of fortune for one
of last year's best performing managers.
Shares in Valeant Pharmaceuticals, one of Ackaman's largest
holdings, tumbled after Democratic lawmakers attacked "massive"
price increases of two heart drugs by the company, fueling a
rout in drugmaker shares on worries of a government and insurer
clampdown on U.S. drug prices.
Ackman said the comments had not changed his view on the
sector. However, while he believed Valeant was the most
undervalued stock in his top holding his fund had not been
adding to its position in the company.
Ackman also weighed in on politics, saying he believes
Michael Bloomberg, a three-time mayor of New York and founder of
the financial news and data company Bloomberg, would run for
president in 2016 and win.
"I would do everything in my power to get this guy elected,"
Ackman said. "I think the stock market would be up 5 percent the
day he announced and 10 percent when he wins."