Carl Icahn

Billionaire activist investor Carl Icahn has suffered a tough start to the year as his bets against the stock market’s rally backfired.

The investment unit of his Icahn Enterprises holding company posted a 5.8 per cent loss in the first quarter, chief executive Keith Cozza said in a conference call with investors on Thursday. That compares with a 5.3 per cent gain in the first quarter of last year.

The losses were driven by “short” positions — bets on falling prices — against stock indices, the firm said.

His performance stands in stark contrast to that of much of the hedge fund industry. On average funds were up 5.7 per cent over the first three months of the year, according to data group HFR. Many have been helped by a sharp rise in the S&P 500 index, which is now up around 16 per cent for the year.

Mr Icahn, 83, is the latest among a dwindling band of bears to suffer in the market rebound of 2019. London-based trader Russell Clark, who has been running a huge bet against stocks, has suffered a fall of more than 25 per cent in his Horseman Global fund this year, the Financial Times reported this week.

Icahn Enterprises’ Mr Cozza said the firm’s investment funds were “well positioned to withstand the market correction” and ended the first quarter with an overall net short position — where bets on falling prices outweigh bets on rising prices — of 43 per cent of assets. That compares with 24 per cent at the end of last year.

“We’re pretty cautious on overall market multiples,” Mr Cozza said on the call. “It’s been a very long bull market run here, approaching 10 years or 11 years, and these things typically don’t last for ever.”

Mr Icahn’s funds own a large position in Herbalife Nutrition, the Los Angeles-based dietary supplements group, which has dropped about one-tenth this year. The funds also have positions in gaming group Caesars Entertainment, where Mr Icahn became the top shareholder in March, and Xerox. Both stocks are up for the year.

Investment losses were the main driver of a first-quarter loss for Icahn Enterprises, which also has business operations in energy, food packaging and automotive parts sales.

laurence.fletcher@ft.com

 

Interesting he’s short. He was a massive trump bull and 30percent later his now a bear?

 

I believe Bill Ackman was long.

 

Interesting exchange.

 

if you start with 512 monkeys throwing random darts, you will have 1 monkey outperform the index 7 years in a row, and be hooray'ed as the master investor.

that's what these guys are.... and of course once they are recognized as the master investor, they will just market perform like a random dart monkey should.

the only guys who likely will keep perform after they become famous are them HFT guys... those are real high frequency edges that cannot be hit by pure luck.

 

Reminds me of the old adage ... trade what you see, not what you think.

 

Icahn is not a monkey. He has access to information and he has the ability to change the course of a company.

 

Maybe not a monkey now. But they all started as random guys. Some got lucky. Got big enough. And it doesn’t take much to figure out size can influence things.

 

Like your pro boys?

 

I'm long and strong the S&P 500 index the past 10 years.

Regular old me, beating these billionaires with no chart study and no study or practice.

Long and strong forever. Buy buy buy buy buy buy. Damn this is easy.