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An Old Interview with Carl Icahn – Notes

“I’m just a guy looking to make money”

“I think I was great at making money, somehow I’m not too good at much else”

-went to Princeton University from Far Rockaway High School
-mother a school teacher wanted Carl to be a doctor, so he went to medical school
-quit medical school because he was hypochondriac couldn’t handle having sick people around him
-joined the Army. Won $10,000 from Army buddies playing poker. Quit after 6 months
-joined Dreyfus in 1961, started investing the $10,000
-made money buying convertible bonds on margin. Jack Dreyfus told him you’re going to lose it all
-1962 market cleaned him out, lost everything. Had to sell his car to eat. Making $100 a week at Dreyfus
-Decided “no more trading the market” “there is nobody who can tell you what the market’s going to do” “in long run there’s no question that we’re going to see a big drop, a big blowup”
-Learned options “always a workaholic” “really am obsessive in nature” “back then no computers” wrote options newsletter pricing options. Made $500,000 a year for a few years
-Bought a seat on the exchange and learned arbitrage. Buy convertible bond and short the stock on 90% margin. Made tremendous amount of money for 7-8 years
-What I do today is same kind of arbitrage. “What I do is buy stocks out there that are cheaper than what the underlying values of the assets” “You have to know what you’re doing; you have to do some analysis”
-Reason you have disconnect is management. “management is screwing up the company”
-CEO of most companies are the social guys, not the smartest or brightest, but likeable and reliable. “He makes very few waves.. just moves up (the ladder)” One skill “he’s a good survivor”
-CEO doesn’t want anyone under him who is smarter than him, why should he feel threatened? So he puts a likeable person little dumber than him under him, who becomes the next CEO
-I buy stock in these companies and I threaten them, hopefully they do something to narrow the value gap

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