Activist Investor Bill Ackman is feeling the heat these days. He has a large stake in highly scrutinized Valeant Pharmaceuticals (VRX) and may be facing billions in losses.

A confluence of factors has changed Valeant from one of the greatest momentum stocks of the last decade to one of the most hated, bidless stocks in the market.

Although, we’re all not running billion dollar hedge funds with other people’s money, there are plenty of investing lessons to be learned from this situation – especially from a smaller investor’s point of view. We absolutely have to do everything in our power to avoid owning a stock like VRX during a 60%+ drawdown from its high.

Valeant is a ‘roll-up’ OR more simply put a company that has grown via continuous acquisitions. Valeant has acquired more than 100 companies since 2010 while amassing 30 billion in debt, which is roughly the company’s current market capitalization.

 Key lessons we can learn from this situation:

Know when you’re being pitched. Friday, Bill Ackman held a 4 hour conference call. Yes, four hours. Most strong investments theses are relatively short, based on logic and understandable. What’s interesting is Bill went to incredible lengths to defend the company, often going off the main topic to place Valeant in a positive light.

He made plenty of broad aggressive statements, such as suggesting Pfizer buy Valeant Pharmaceuticals. He even went as far as comparing himself to Warren Buffett in the American Express Salad Oil Swindle of 1963. That initially comes across as a baseless comparison.

We see this all the time in the investment research industry. There are so many poor and flawed ideas in the world, but a talented presenter can frame them positively. When studying any topic it’s critical to be able to identify substance from ‘oohs and ahhs’.

Stay humble. No matter how far you go in the investing business, you have to keep your ego in check. Ackman’s fund posted a 40% return in 2014. He really trounced his competition.