One of the most successful investors – Carl Icahn
Tue Jan 27, 2009 | | Posted in Finances Inspire
When Carl Icahn starts buying the stock of a company he believes is poorly managed, typically its stock price bounces back upwards. Wall Street has a catch phrase for that: The “Icahn Lift.”
Time Magazine interviewed Icahn on the occasion of his 71st birthday in February 2007.
When he was asked about retirement, he answered, “Well, a number of CEOs have offered to host my retirement party. But I’m just a competitive guy that grew up in Queens. I can’t see myself spending the rest of my life in Florida playing golf.”
It’s reported that Icahn has built a team of two dozen associates to help him find targets and mount his corporate crusades and will likely continue to pursue his investor activism.
Investment Style
Icahn’s strategy involves targeting a company he thinks is poorly run and whose stock price is trading below value.
- He typically buys when the markets are on a downtrend. When everyone else is selling, he starts buying.
- He accumulates enough of an ownership position to lobby for a position on the company’s board of directors.
- Usually his first demand is to dump the CEO and, often times, to consider breaking up the company into separate parts and selling them off.
- Wall Street professionals say that most of the time he is successful because he is intimidating and relentless.
- He is viewed as such a surefire moneymaker that investment managers typically start buying up the company’s stock, which, whether Icahn is successful or not, leaves him with healthy stock price gains.
Moral of the story
Some investors closely watch Carl Icahn’s moves and follow what he does to the point that they also start buying in the same company as Carl does.
However, having said that, becoming a successful investor takes education, patience and maybe even a little luck.
What do you think?
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Information contained herein is general in nature, and is provided for informational and educational purposes only. Past performance is no guarantee of future results. Talk to your financial adviser.
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