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“A day of reckoning is coming…”
That’s what billionaire “activist” investor Carl Icahn told CNBC viewers earlier this year. And it turns out his actions match his words…
Icahn grew more bearish over the second half of last year. Barron’s reports he was 25% “net short” of the market by December 31.
That means his $5.8 billion Icahn Enterprises (IEP) fund had 25% more short positions than long positions. (Icahn’s own money makes up about 90% of the fund.)
[Short positions gain when assets go down in value. Long positions gain when assets go up in value.]
But Icahn’s short position ballooned six-fold in the first quarter of 2016. It hit a personal record: 149% net short. Icahn even liquidated his famous multibillion-dollar “no-brainer” Apple (AAPL) position.
IEP’s CEO Keith Cozza explained Icahn’s position in a recent conference call:
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We’re much more concerned about the market going down 20% than we are it going up 20%. And so the significant weighting to the short side reflects that. |
When one of the most successful, well-connected investors in history goes record short, you take notice. And when several others follow suit—as we’ve been tracking in the Daily—you take action.
Bottom line: Make sure your portfolio is rigged for maximum defense. That means following PBRG’s risk-management protocol to the letter.
If you want to set yourself up for “Icahn-style” big gains on the short side, read Tom’s favorite shorting target in our next item…
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