Carl Icahn to investors: “The worst is yet to come”

Wall Street icon Carl Icahn warns his fellow investors: “The worst is yet to come.”

On Wednesday, 86-year-old Icahn spoke via remote feed at MarketWatch’s Best New Ideas in Money festival about that gloomy assessment of the economy, but also spoke about opportunities for investors.

It’s not hard to see why the billionaire investor was able to offer such a dovish view: The stock market experienced its worst first half since 1970. But Icahn, whose career in finance dates back to 1961 and who has made a name for himself as an activist shareholder, had In contrast, a robust 2022: The net asset value of its Icahn Enterprises increased by 30% in the first six months of 2022.

Billionaire investor Carl Icahn talks about shaking up company boards, hedging this year’s downturn and making big bets. Will its positioning in 2023 affect your own investment planning?

Icahn said hedging strategies are key to his success. And he stressed that investors can still find stocks to buy.

“I think a lot of things are cheap and they’re getting cheaper,” he said, later pointing to companies in the oil refining and fertilizer industries – he mentioned CVR Energy CVI,
especially – as the ones to watch.

Not surprisingly, Icahn said inflation was playing a significant role in the market downturn. “Inflation is a terrible thing,” he said, noting that it led to the fall of the Roman Empire. “You can’t cure it.”

Icahn blamed federal spending for the country’s current fiscal problems. “We printed too much money and thought the party would never end. And the party’s over,” he said.

Icahn said he supports the Federal Reserve’s move on Wednesday to hike interest rates by 75 basis points in its ongoing attempt to curb inflation. But he also thought the Fed could have been more aggressive and said he would have supported a 100-point hike.

Referring to the recently passed inflation-reducing legislation and its goal to reduce carbon emissions, Icahn said he understands the need to curb carbon emissions but feels the legislation goes too far. He likened it to a sick patient being prescribed too many drugs. If you “take 100 pills at once, you’re going to die,” he said.

Still a very active shareholder, Icahn hammered in the idea that today’s companies needed better governance. “There is no responsible holding management,” he said.

Joseph Adinolfi contributed to this story.

Get insights into investing and managing your finances. Speakers include investors Josh Brown and Vivek Ramaswamy; plus topics such as ESG investments, electric vehicles, space and fintech. The Best New Ideas in Money Festival continues on Thursday. Sign up to attend in person or virtually. Carl Icahn to investors: “The worst is yet to come”

Brian Lowry

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