Billionaire investor Carl Icahn warned of the possibility of a significant decline in stocks at some point, telling CNBC’s Scott Wapner that “wild highs” in the market always end dramatically.
Wapner reported Icahn’s warning in the “Interval Report” during a turbulent day for the stock market.
“In my day, I saw a lot of wild highs with a lot of badly rated stocks, but there is one thing they all have in common. Eventually, they hit a wall and undergo a painful correction. No one can predict when it will happen, but when it does happen, look down, “said Icahn. “Another thing they have in common is that it is always said, it is different this time. But it never ends up being the truth.”
The investor declined to go into details of his positions, but told Wapner that he was well protected.
Icahn’s warning statement came at a time when the US stock market fell sharply on the first day of trading in the new year. The top three Were indices fell more than 3% around midday, with the Dow dropping up to 700 points.
The difficult start to 2021 follows an excellent year for the markets, which saw the S&P 500 rise 16% and certain technology stocks have taken dramatic leaps, even with the Covid-19 pandemic driving the world economy.
The rapid increase and expanding stock prices have made some Wall Street strategists cautious about the short-term market path. Morgan Stanley strategist Mike Wilson said in a note to customers on Monday that the market was “ripe for a downturn”.
Icahn made his name as an activist investor. On Monday morning, Herbalife announced that it was buying back $ 600 million in Icahn shares and that the activist’s representatives would leave the board. Icahn said in a statement that the time for activism at Herbalife, in which he invested more than eight years ago, has passed, but he planned to remain a minor shareholder.