Warren Buffet is buying another stock from Carl Icahn. No doubt both are good investors. As of today Carl Icahn’s net worth was estimated by Forbes at close to $15.4 billion dollars.
Icahn used to be called the raider. He will come into the company by purchasing large number of shares. This allows him to have controlling positions in the company. He will then force the company to change rules or break it up as a result the stock price might go up. Then he cash out.
By doing this he was able to generate over 20% a year. Icahn has 18 billion dollars to manage. So, with 20% of that it’s considerable amount of returns but the thing which often was not told was how he initially got capital to get started. Carl Icahn had a degree in philosophy in Princeton and at three years of medical school. Before he returned to wall street and became a broker for two different companies. So, I read a lot about put some calls and in those days that was really the wild west the puts and calls and you had all these option brokers if you remember and they were fleecing everybody so I was the honest broker. So to speak I come in and tell everybody put out a mid week option and I’d stay up every night calling people that write in for my report and I’d be calling them from call to California and I’ve had a big following options and I give them more than they thought. This is what he said in his one of the interview.
He made so much money for doing this that in 1968 Icahn established his own brokerage Firmicahn and called it still a brokerage company that purchases and sells securities on behalf of their clients but on the side carl started using his profits to invest in other companies. From 60 to the 80s there was a huge market growth although there’s no record of how much money the company actually made during that period but by early 1980 carl was able to fully take over an airline with 469 million dollars. He turned the company around and made a huge profit he just uncovered the secret to make money he realized that when he threatened to take over companies these firms purchased their shares at a premium price to remove the threat this is called a great black-mailing today. But, as compared to him warren buffet is different investor. He practices value investing. He buys company stock and shape that company to generate more revenue which would lead to more profit in result increasing stock price.
But, this time Warren Buffet is buying oil stock Occidental Petroleum. In fact, these two seniors have been quite active this year, especially around oil giant Occidental Petroleum.
Carl was not comfortable after Russia-Ukraine war. So, he started selling his stake in this petroleum stock at the same time Warren Buffet being optimistic is now buying stock in this oil giant.
Now, question is who is right? Buffet of lcahn. Look, last time same thing happened with Apple stock. Carl saw flawed Apple model and started selling his Apple stake and on other side Warren Buffet liked the revenue model of Apple and started buying stake in it. Warren Buffet made even bigger gains than Carl in Apple investments over the period of 5 years.
Carl is short term investor. He buys, takes small profit and exits. But, Warren Buffet is long term investor and he is seeing oil and energy prices to climb up in future. That is why he is buying Occidental Petroleum.