Icahn Says all of His Major Gains Have Come from Long-term Positions

In addition to Stanley Druckenmiller, Andrew Ross Sorkin interviewed legendary activist investor Carl Icahn at the Dealbook conference this week.

Sorkin asked Icahn whether activist investors contributed to managerial short-termism. The conventional wisdom is that investors like Icahn take major positions in certain companies, enjoy a jump in the share price from the surrounding publicity, and then sell off those shares after management has been forced to take actions not in the long-term interest of the firm.

Icahn replied that description simply wasn’t accurate. Far from reaping profits from short-term positions, Icahn said all of his major gains have come from positions held for 7-10 years or even longer. Mentioning specific companies he has held, Icahn described how he has interacted with managers at various companies in which he has been a shareholder. Shareholdings he continues to maintain include the following (with years held):

    ACF (31 years)
    American Railcar Industries (23 years)
    Federal Mogul (14 years)
    PFC Metals (17 years)
    Viskase (14 years)
    XO Communications (14 years)
    Vector Group (13 years)
    American Casino (11 years)
    National Energy (11 years)
    WestPoint Home (11 years)

The link to the interview is here.

For an explanation of how and why Carl Icahn became an activist investor, read The Icahn Manifesto by Tobias Carlisle in the Fall 2014 issue of the JACF (Volume 26 Number 4). For a broad discussion of corporate capital allocation issues, see Capital Deployment Roundtable: A Discussion of Corporate Investment and Payout Policy with Paul Clancy, Michael Mauboussin, John Briscoe, Scott Ostfeld, Paul Hilal, Greg Milano, John McCormack and Don Chew in the same issue.

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