5 ms·

He may well be right. If you say it often enough, eventually you will be. 2011: >You’ve got to be myopic if you’re not at least concerned that there might be

by ddeck 10y ago

He may well be right. If you say it often enough, eventually you will be. 2011: >You’ve got to be myopic if you’re not at least concerned that there might be a major correction [1] 2013: >Activist investor Carl Icahn on Monday said there was a chance the stock market could suffer a big decline, saying valuations are rich and earnings at many companies are fueled more by low borrowing costs than management's efforts to boost results [2] 2014: >Carl Icahn says 'time to be cautious' on U.S. stocks [3] >Carl Icahn Reiterates "We Are In A Major Asset Bubble" [4] 2015: >Icahn warns of potential looming catastrophe...Icahn said he's "more hedged now than I've been in years." [4] [1] https://next.ft.com/content/c9612302-4c09-11e0-82df-00144feab49a https://next.ft.com/content/c9612302-4c09-11e0-82df-00144fea... [2] http://www.reuters.com/article/us-investment-summit-icahn-idUSBRE9AH11720131118 http://www.reuters.com/article/us-investment-summit-icahn-id... [3] http://www.reuters.com/article/us-investing-icahn-exclusive-idUSKBN0FF2DV20140710 http://www.reuters.com/article/us-investing-icahn-exclusive-... [4] http://www.zerohedge.com/news/2014-08-12/carl-icahn-reiterates-we-are-major-asset-bubble http://www.zerohedge.com/news/2014-08-12/carl-icahn-reiterat... [5] http://www.cnbc.com/2015/09/27/-of-potential-looming-catastrophe.html http://www.cnbc.com/2015/09/27/-of-potential-looming-catastr...

11thEarlOfMar 10y ago
Meanwhile, the S&P Increased 65%. (2011 ending @ ~1257)
UVB-76 10y ago
If the implication is that his statements in 2011 and 2013 were predictions that turned out to be false, I don't think these quotes are sufficient evidence. That an inevitable correction has been delayed by sustained government efforts does not make predictions of a correction any less prescient.
- greeneggs 10y ago
  It is hard to call prescient or insightful a model of the economy that doesn't take into account government actions.
- asdfologist 10y ago
  No, his remarks have an obvious tone of urgency. If after 5 years nothing has happened (and actually the opposite has), then his credibility is damaged.
  - aminorex 10y ago
    His money speaks louder and boosts his credibility more than do your misinterpretations.
    - asdfologist 10y ago
      So your argument is "he is rich therefore he is always right". That's some astute logic there, professor.
- ddeck 10y ago
  One doesn't need to be an economic historian to understand that the economy and market run in cycles. There is always an "inevitable correction" somewhere in the future, but in this endeavor, it's timing that matters. It’s probably not fair to pick on Icahn in particular, who is not really a perma-bear. There are far better examples (e.g. Marc Faber), who despite being demonstrably wrong year after year with their end of world predictions, are always welcome back on Bloomberg and CNBC explaining how the world markets are about to fall apart.
  - Retric 10y ago
    If you actually look at economy's over long time periods they really don't have a cycle. It's much closer to a random walk than you might think. After the fact we simply define periods as good or bad based on what followed them. EX: People talk about Japan as if it was going though a bad time period vs. that just being the new normal based on it's demographics.
    - aminorex 10y ago
      As someone paid to do such looking for the past decade I can assure you that both econometric and market series' are subject to periodic, as well as quasiperiodic, chaotic, and exogenous forcing functions. Everything looks like white noise when your eyes are closed.
      - Retric 10y ago
        If there where real periodic cycles you could predict if the US economy where Up or Down with above random odds for July 4th, 2050. Nobody can, because what you call periodic is something else. Another way of saying it is there where say a X year cycle to the economy it would be a very famous result. (Ignoring seasonal variation.)
      - return0 10y ago
        Even the Black-scholes models it as random motion.
      - 10y ago
partiallypro 10y ago
Yeah...the problem with your analysis is that Icahn was never really "short" the market when he said those things. He owned big momentum stocks, as a matter of fact, Apple, Netflix, etc. Now he has a massive short position in the market, his money is now where his mouth was/is. The first time in your analysis that he actually said he was hedging, the market took a nose dive of 20%. I think his advice is worth warrant, especially when you have people like Bill Gross saying similar. It's of my opinion that we are in an asset bubble, but we could have a "blow off top" before we really see what happens. Stock declines also generally occur during election years after a 2 term President, so it's a generally good bet for a correction at the very least. But, if I really knew what was going on, I'd be rich.
- coredog64 10y ago
  That last bit sounds a little "Texas Sharpshooter" to me.
  - partiallypro 10y ago
    Economic and market predictions are practically impossible to get right in timing. We can only really see us trending towards something, but that trend could last long enough to lose some serious money. That's why Buffet ignores the noise, and invests long term. I threw that last sentence out there, because, while I think I am right...I've been wrong enough to lose enough money that it genuinely hurt; I don't want anyone reading my post and affirming a bias and losing money. Even if I see eye to eye with some market experts, in the end, a single event could make the opposite occur.
- rsync 10y ago
  "It's of my opinion that we are in an asset bubble, but we could have a "blow off top" before we really see what happens. Stock declines also generally occur during election years after a 2 term President, so it's a generally good bet for a correction at the very least. But, if I really knew what was going on, I'd be rich." What's missing right now is the taxi driver sentiment ... I don't hear inexperienced investors talking about playing the market or about average folks day trading. Yet.

by ddeck 10y ago

11thEarlOfMar 10y ago

Meanwhile, the S&P Increased 65%. (2011 ending @ ~1257)

UVB-76 10y ago

If the implication is that his statements in 2011 and 2013 were predictions that turned out to be false, I don't think these quotes are sufficient evidence. That an inevitable correction has been delayed by sustained government efforts does not make predictions of a correction any less prescient.

greeneggs 10y ago
It is hard to call prescient or insightful a model of the economy that doesn't take into account government actions.
asdfologist 10y ago
No, his remarks have an obvious tone of urgency. If after 5 years nothing has happened (and actually the opposite has), then his credibility is damaged.
- aminorex 10y ago
  His money speaks louder and boosts his credibility more than do your misinterpretations.
  - asdfologist 10y ago
    So your argument is "he is rich therefore he is always right". That's some astute logic there, professor.
ddeck 10y ago
One doesn't need to be an economic historian to understand that the economy and market run in cycles. There is always an "inevitable correction" somewhere in the future, but in this endeavor, it's timing that matters. It’s probably not fair to pick on Icahn in particular, who is not really a perma-bear. There are far better examples (e.g. Marc Faber), who despite being demonstrably wrong year after year with their end of world predictions, are always welcome back on Bloomberg and CNBC explaining how the world markets are about to fall apart.
- Retric 10y ago
  If you actually look at economy's over long time periods they really don't have a cycle. It's much closer to a random walk than you might think. After the fact we simply define periods as good or bad based on what followed them. EX: People talk about Japan as if it was going though a bad time period vs. that just being the new normal based on it's demographics.
  - aminorex 10y ago
    As someone paid to do such looking for the past decade I can assure you that both econometric and market series' are subject to periodic, as well as quasiperiodic, chaotic, and exogenous forcing functions. Everything looks like white noise when your eyes are closed.
    - Retric 10y ago
      If there where real periodic cycles you could predict if the US economy where Up or Down with above random odds for July 4th, 2050. Nobody can, because what you call periodic is something else. Another way of saying it is there where say a X year cycle to the economy it would be a very famous result. (Ignoring seasonal variation.)
    - return0 10y ago
      Even the Black-scholes models it as random motion.
    - 10y ago

partiallypro 10y ago

Yeah...the problem with your analysis is that Icahn was never really "short" the market when he said those things. He owned big momentum stocks, as a matter of fact, Apple, Netflix, etc. Now he has a massive short position in the market, his money is now where his mouth was/is. The first time in your analysis that he actually said he was hedging, the market took a nose dive of 20%. I think his advice is worth warrant, especially when you have people like Bill Gross saying similar. It's of my opinion that we are in an asset bubble, but we could have a "blow off top" before we really see what happens. Stock declines also generally occur during election years after a 2 term President, so it's a generally good bet for a correction at the very least. But, if I really knew what was going on, I'd be rich.

coredog64 10y ago
That last bit sounds a little "Texas Sharpshooter" to me.
- partiallypro 10y ago
  Economic and market predictions are practically impossible to get right in timing. We can only really see us trending towards something, but that trend could last long enough to lose some serious money. That's why Buffet ignores the noise, and invests long term. I threw that last sentence out there, because, while I think I am right...I've been wrong enough to lose enough money that it genuinely hurt; I don't want anyone reading my post and affirming a bias and losing money. Even if I see eye to eye with some market experts, in the end, a single event could make the opposite occur.
rsync 10y ago
"It's of my opinion that we are in an asset bubble, but we could have a "blow off top" before we really see what happens. Stock declines also generally occur during election years after a 2 term President, so it's a generally good bet for a correction at the very least. But, if I really knew what was going on, I'd be rich." What's missing right now is the taxi driver sentiment ... I don't hear inexperienced investors talking about playing the market or about average folks day trading. Yet.