Billionaire investor Carl Icahn warned of the possibility of a significant drop in stocks at some point, and told CNBC’s Scott Wapner that “wild rallies” in the market always have a dramatic end.
Wapner reported Icahn’s warning about the “Rest Time Report” during a turbulent day for the stock market.
“In my day I’ve seen a lot of wild rallies with a lot of bad stock, but there’s one thing they all have in common. They finally hit a wall and make a major painful correction. No one can predict when it will. , but when that happens, look down, ”Icahn said. “Another thing they have in common is that it’s always said, this time it’s different. But it never turns out to be the truth.”
The investor refused to go into the specific details of his positions, but told Wapner he was well covered.
Icahn’s precautionary statement came as the U.S. stock market fell sharply on the first trading day of the new year. The three major indices fell more than 3% near noon, with the Dow up 700 points.
The rough start of 2021 follows an important year for markets, which saw the S&P 500 rise 16% and certain technology stocks experienced dramatic leaps even as the Covid-19 pandemic disrupted the global economy. .
The rapid rise and rise in stock valuations have caused some Wall Street strategists to be wary of the short-term market trajectory. Morgan Stanley strategist Mike Wilson said Monday in a note to clients that the market was “ripe for a reduction.”
Icahn has become known as an activist investor. On Monday morning, Herbalife announced that it would buy shares worth $ 600 million from Icahn and that the activist’s representatives would leave the council. Icahn said in a statement that time for activism at Herbalife, in which he invested more than eight years ago, had passed, but he planned to remain a shareholder at a lower level.