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Billionaire investor Carl Icahn has warned of the possibility of a significant drop in stocks at some point, telling CNBC’s Scott Wapner that market “wild rebounds” always end in dramatic fashion.
Wapner reported Icahn’s warning on “Halftime Report” during a turbulent day for the stock market.
“In my day, I saw a lot of wild rallies with a lot of mispriced stocks, but there is one thing they all have in common. Eventually, they hit a wall and go into a major painful fix. No one can predict when this will happen. happen, but when that happens, look below, ”Icahn said. “Another thing they have in common is that you always say, it’s different this time around. But that never turns out to be the truth.”
The investor declined to go into details of his positions, but told Wapner he was well covered.
Icahn’s warning came as the US stock market fell sharply on the first trading day of the new year. The three major indexes were all down more than 3% around noon, as the Dow Jones fell 700 points.
The difficult start to 2021 follows a record year for the markets, which saw the S&P 500 rise 16% and some tech stocks experience dramatic jumps even as the Covid-19 pandemic has rocked the global economy.
The rapid rise and skyrocketing valuations of stocks has made some Wall Street strategists wary of short-term market developments. Morgan Stanley strategist Mike Wilson said in a note to clients on Monday that the market was “ripe for a pullback.”
Icahn has made a name for himself as an activist investor. On Monday morning, Herbalife announced that it would repurchase $ 600 million in shares from Icahn and that representatives for the activist would step down from the board. Icahn said in a statement that the time of activism at Herbalife, in which he had invested more than eight years ago, has passed but that he plans to remain a shareholder at a lower level.
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