Santangel's Review

Commentary

Everything You Need to Know About Carl Icahn in Two Articles

In a recent interview, Liz Claman of Fox Business News succinctly summed up Carl Icahn’s recent success when she said: “you’ve had a very good year, Carl.” And he has. From pouncing on Herbalife (and in the process damaging Ackman), to fighting with Michael Dell, Icahn seems like a pig in mud these days. And  he has made a lot of money. But not for his investors.

That is because Icahn returned limited partner capital around the end of 2011. We wrote about it at the time, but Icahn seemed different after returning capital. Less inhibited. For example his responses to reporters’ questions were less guarded which led to one of my all-time favorite quotes from this article.

“You know who I can relate to? I’m nothing like Alexander the Great and I don’t want it to be misconstrued that way, but I was reading his biography and I can relate to one aspect about the guy. He could have stayed in Persia and had a nice life. Instead, he went off and fought a new fight. That’s how I can relate. I don’t like just sitting there. I enjoy the hunt much more than the “good life” after the victory.”

There were a lot of snarky comments  at the time about Icahn comparing himself to Alexander the Great especially since Charlie Sheen was blowing himself up at the same time. But I think we were just starting to see the beginning of the real Carl Icahn.

Here at Santangel’s Review, we liked seeing the “real Icahn” since he was letting his true love for investing (an essential ingredient for long term success in our humble opinion) shine through allowing us to reverse engineer his success a little bit. Around the same time, we also highlighted another quote that seems to show what makes Icahn tick:

“Icahn sold his 177-foot yacht because he got bored spending time on it; the investor has discovered that, for him, happiness means pursuing his activism actively. “What else am I going to do?” Icahn asks rhetorically. “Sit at boring dinner parties?” He says this with a wave of the hand, leaning back in his chair.”

But what we did not anticipate was how not having limited partner capital and (frankly not giving a F**K) would make him a better investor. I’ve lost track of how many battles he has fought in the last 18 months, but I’d feel comfortable making the claim that it is the largest number of fights he has had over any 18 month period during his entire career. I don’t think this is simply because he has had a great opportunity set (although Ackman did hand him one on a silver platter). I think it is the case of a kid in a candy store with no parents around and an unlimited allowance….I want to fight him, ooh let’s fight that guy, I’ll take one Michael Dell, and oh let me try to get even with that Ackman fellow….

It is pretty clear that having permanent capital can make one a better investor since it allows you to have a true long-term outlook and make bets that others can’t or won’t make, but I think Icahn is starting to make the case that the psychological benefit of not managing other people’s money can be a big advantage too. They key is to become a billionaire first….