Billionaire investor Carl Icahn warned of the opportunity of a major decline for shares in some unspecified time in the future, telling CNBC’s Scott Wapner that “wild rallies” out there at all times meet a dramatic finish.
Wapner reported Icahn’s warning on “Halftime Report” throughout a turbulent day for the inventory market.
“In my day I’ve seen a whole lot of wild rallies with a whole lot of mispriced shares, however there’s one factor all of them have in frequent. Finally they hit a wall and go into a serious painful correction. No person can predict when it is going to occur, however when that does occur, look out beneath,” Icahn mentioned. “One other factor they’ve in frequent is it is at all times mentioned, it is completely different this time. Nevertheless it by no means seems to be the reality.”
The investor declined to enter the specifics of his positions, however did inform Wapner that he was effectively hedged.
Icahn’s cautionary assertion got here because the U.S. stock market fell sharply on the first trading day of the new year. The three main have been indexes have been all down greater than 3% close to noon, with the Dow falling as a lot as 700 factors.
The tough begin to 2021 follows a banner 12 months for the markets, which noticed the S&P 500 rise 16% and sure tech shares see dramatic jumps even because the Covid-19 pandemic upended the world financial system.
The fast rise and ballooning valuations for shares have made some Wall Avenue strategists cautious of the market’s path within the close to time period. Morgan Stanley strategist Mike Wilson mentioned in a be aware to shoppers on Monday that the market was “ripe for a drawdown.”
Icahn has made his identify as an activist investor. On Monday morning, Herbalife introduced that it was shopping for again $600 million price of shares from Icahn and that the activist’s representatives would exit the board. Icahn mentioned in an announcement that the time for activism at Herbalife, which he invested in additional than eight years in the past, had handed however he deliberate to stay a shareholder at a smaller stage.