Tips from Carl Icahn on Investing, Markets and Life

Quotes From Icahn: How The Self-Made American Business Star Succeeded


American business Star Carl Icahn went from working as an entry level stock-broker at Dreyfus and Co in New York to growing one of the largest fortunes in the USA. In his youngest days of his life, Icahn grew up in a humble family in Queens, New York and developed his character at a tough high school. When it came to finances, he was told by his father to “figure it out”. From struggling to pay his college boarding fees, Icahn has since achieved massive self-led success: in addition to growing billionaires of dollars in the markets and founding Icahn Enterprises, he has also been appointed as Special Advisor to President Donald Trump!

In a wide-ranging interview with Skybridge Capital we learn of some of the successes of this self-made billionaire:

Throughout Icahn’s life and career, he has inspired many with his words of wisdom. Here are a few tips and words of wisdom from the inspirational billionaire:

On His Life

“My parents never thought I’d amount to too much”

How wrong they were! In 2016, the billionaire Icahn ranked #65 on Forbes’ list of Powerful People. However, you might not think it, but Icahn grew up without much money. The rough school environment at Far Rockaway High School in Queens New York where Icahn went to school, taught him to develop a thick skin, and even Icahn’s father encouraged him to fend for himself. Without much money in the family, paying for college was a big deal for the young boy and his parents. Icahn’s father offered to pay tuition at Princeton but when Icahn asked his father how he was going to pay for room and board at Princeton, his father responded: “you’re a smart kid, you’ll figure it out”. And figure it out he did! Now, at age 80, Carl Icahn is one of the richest men in America, with a staggering net worth of $16.8 billion. He is the founder and majority shareholder of Icahn Enterprises, a diversified holding company based in NYC.

On Investing

“You can’t really say I’m worried about next month or even next week; you worry about the system and what’s going on”

In the video, Icahn talks about his opinions on the 2008 financial crisis and with this, touches on one of the keys of his investing strategy. Despite all the market turmoil in the past several years, Icahn, like many investors, holds a long-term approach: he is well known to hold a value-investing strategy, which he himself defines as “buying something when no one wants it”. Don’t forget: one man’s trash is another man’s treasure! Value-investing means targeting a company that is trading below its current value, with stock prices that reflect poor price-to-earnings (P/E) ratios or book values that exceed market valuation. Carl Icahn says, “I look at companies as businesses, while Wall Street analysts look for quarterly earnings performance. I buy assets and potential productivity. Wall Street buys earnings, so they miss a lot of things that I see in certain situations.” Keep your eyes peeled and you will have the potential to grow your wealth, just like Icahn.

Icahn is often described as a “shareholder activist”. This means that he uses his shareholder rights to try and bring about change at a company and there is no denying his success with this strategy. In fact, he has become so well known for uncovering hidden value to shareholders, that increases in stock value due to Icahn’s involvement is known as an “Icahn lift”. Add that to your dictionary, Webster!

A recent example of the ‘lift’ in action is Icahn’s influence with Netflix stock prices back in 2012. Icahn accumulated over 10% of the company when it was near its 52-week low and after he disclosed his stake in the company, the “Icahn lift” sent the stock soaring 14%.

On Markets:

“There are good companies, good CEOs, as there are good regulations. But there are some that are completely absurd in companies just as in the government.”

In December of 2016, newly elected President Donald Trump announced that he would name Carl Icahn as advisor on regulatory overhaul. Icahn is a long-time friend to Trump and we all expect to see many changes to regulatory policies over the coming weeks. In a recent interview with CNBC, Icahn speaks of some of the changes he hopes to make and what the role might involve, including tackling the controversial animal of the Dodd/Frank regulation. One thing we know for certain is, that as Trump continues to make modifications, disruption and change will be the key factors for 2017. In other words: hold on to your hats, it’s going to be a bumpy ride!

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