Billionaire investor Carl Icahn has warned of the possibility of a significant decline in equities at some point, telling CNBC’s Scott Wapner that “wild rallies” in the market are always coming to a dramatic end.
Wapner reported Icahn’s warning about the “Break Report” during a troubled day for the stock market.
“In my day I saw a lot of wild rallies with a lot of stocks with the wrong prices, but there’s one thing they all have in common. Eventually they hit a wall and go into a major painful correction. No one it may predict when it will happen, but when it does, look below, “Icahn said. “Another thing they have in common is that it’s always said, it’s different this time. But it never turns out to be the truth.”
The investor refused to go into the specifics of his positions, but told Wapner he was well covered.
Icahn’s warning statement appeared as the US stock market fell sharply on the first trading day of the new year. The three major indices fell by more than 3% near noon, with the Dow falling by up to 700 points.
The harsh start of 2021 follows a benchmark year for markets, which saw the S&P 500 rise 16% and some technology stocks jumped dramatically even as the Covid-19 pandemic put an end to the global economy.
The rapid growth and rising stock values have caused some Wall Street strategists to worry about the market in the short term. Morgan Stanley strategist Mike Wilson said Monday in a note to customers that the market is “ready for a retreat.”
Icahn made his name as an activist investor. On Monday morning, Herbalife announced that it would buy $ 600 million worth of shares from Icahn and that the activist’s representatives would leave the board. Icahn said in a statement that the time for activism at Herbalife, which he had invested more than eight years ago, had passed, but he intended to remain a shareholder at a lower level.