Carl Icahn warns investors that wild stock rallies always eventually 'hit a wall and go into a major painful correction'

January 4, 2021

Reuters

  • Billionaire fund manager Carl Icahn told CNBC’s Scott Wapner that he’s “pretty well hedged right now.” 
  • “In my day I’ve seen a lot of wild rallies with a lot of mispriced stocks, but there is one thing they all have in common,” Icahn said. “Eventually they hit a wall and go into a major painful correction. Nobody can predict whether it will happen, but when it does happen, look out below.” 
  • The Icahn Enterprises chairman added: “Another thing they have in common is it’s always said, ‘it’s different this time’. But it never turns out to be the truth.”
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Billionaire fund manager Carl Icahn reminded investors that stock market euphoria can’t last forever. In an interview with CNBC’s Scott Wapner, he said all rallies eventually end in crashes.

“In my day I’ve seen a lot of wild rallies with a lot of mispriced stocks, but there is one thing they all have in common,” Icahn said. “Eventually they hit a wall and go into a major painful correction. Nobody can predict whether it will happen, but when it does happen, look out below.” 

The Icahn Enterprises chairman added: “Another thing they have in common is it’s always said, it’s different this time. But it never turns out to be the truth.” 

Icahn did not disclose his positioning in detail but said he is “pretty well hedged right now.” 

Icahn spoke with Scott Wapner on Monday afternoon. On Sunday it was reported that Icahn sold $600 million of his position in nutritional supplement company Herbalife.

“The time for activism has passed as the Company has grown, and I don’t typically invest billions of dollars in companies where our role as activist is not needed,” Icahn said in an Herbalife statement. 

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