Image by: Insider Monkey
By Michael Sterling
American businessman and investor Carl Icahn is having one hell of a year. Being named by Forbes as one of the 40 Highest-Earning hedge fund managers, his $20 billion net worth has been seeded through a unique and obvious business philosophy: to make money.
Icahn is a man who isn’t only good at making money, but sees it more as a “fun thing to do” rather than a part of his job description. Whether it’s his controversial advice to Apple or his acquisition of 61 million shared in Talisman Energy, his tactics are both original and intuitive. But the real question is how does he do it?
Never Forget Where You Came From
Growing up in a middle-class family in the Far Rockaway section of Queens, New York, arguing was all he knew. In fact, it was this talent which got him a seat on the New York Stock Exchange in the late-sixties where he began his finance career at trading options. After his hostile takeover of TWA in 1985, it was clear that the strategy of arguing could get him exactly where he needed to be.
“A number of CEOs have offered to host my retirement party, but I’m just a competitive guy that grew up in Queens. I can’t see myself spending the rest of my life in Florida playing golf,” Icahn said to Time Magazine.
It’s clear that our childhood environment shapes who we are as adults. Those who keep it without being affected by society’s chisel on how to get things done, you subconsciously become an original.
Keep Your Competitors Close & Your Friends Closer
In a May 2007 Fortune Magazine article, investor and longtime friend Wilbur Ross referred to Icahn as “the most competitive person I know… he’s especially good at terrorizing people and wearing down their defenses.” Many corporate executives have concurred, and have experienced the wrath of Carl Icahn. He’s a shark, and his method is what every young entrepreneur should strive for.
By targeting a company he thinks is poorly run and/or whose stock price is trading below value, he sees an opportunity. When everyone else is selling, he starts buying. As soon as he accumulates enough of an ownership position, he eventually lobbies for a position on the company’s board of directors. His first move? To fire the CEO.
This was prevalent in 2006, when he tried to oust CEO Richard Parsons and divide Time Warner into separate parts. Though it didn’t work, some experts believe that it went all according to plan. Parsons agreed to do a $20 billion buyback of the stock. The stock went up 30%, which helped shareholders, and Icahn Partners made $250 million.
Reputation Is Everything On Wall Street
“I make money. Nothing wrong with that. That’s what I want to do. That’s what I’m here to do. That’s what I enjoy,” Icahn said on NPR.
Wall street professionals have said that Icahn is successful because he’s intimidating and relentless. Not just that, but it’s because of these attributes, he’s viewed as a surefire moneymaker which is why investment managers typically start to buy up the company’s stock. Little do they know, whether Icahn’s successful or not, he’s nearly always left with healthy stock price gains.
The “Icahn Life” has been a catchphrase on Wall Street for sometime now to describe the upward bounce in a company’s stock price that happens whenever Icahn starts buying the stock of a company he believes is poorly managed. It’s this effort which ultimately benefits the shareholder.
Activists Are Likable
Icahn has shown that whenever you are “for the people,” you’re truly “for the money.” Above the rest, he has realized that if you use your voice to benefit the shareholders, they will always be on your side.
Icahn has been a positive force in shareholder activist, seeking to correct the abuses of greedy and/or incompetent corporate management. Amidst the corrupt, Icahn sticks out – at least to the general public – and the general public decide what company is successful or not.
Go Against The Current
“When most investors, including the pros, all agree on something, they’re usually wrong,” Icahn once said.
What most people fail to see is that everyone, and I mean everyone, has an intention behind deals. It would be foolish to make a deal without reaping some sort of benefit. Business isn’t like a row boat whereby everyone works at equal rhythms. Everyone has a different stake and task behind all decisions. When it all becomes unison, there is room to question.
Going against the current in business is what makes every professional succeed. No fish has escaped its school without taking the path less traveled. Icahn has proven that this is surefire way to get yourself noticed.