Karl Ikan warned that the market rally could end in a painful correction and hedging accordingly


Billionaire investor Carl Ecken warned of the possibility of significant declines for stocks at some points, telling CNBC’s Scott Wappner that “wild rallies” in the market always met a dramatic end.

Wappner reported Ecken’s warning on a “halftime report” for the stock market during a turbulent day.

“In my day I’ve seen a lot of wild rallies with lots of wrong rallies, but there’s one thing they have in common. Eventually they collide with a wall and go into a big painful correction. No one can predict that. That when it will happen. Icon said, but when it happens, see below. “Another thing they have is that it’s always said, it’s different this time. But this is not true.”

The investor refused to go into the specifics of his positions, but told Wappner that he was defending well.

ICHN’s cautious statement came as the US stock market fell sharply on the first trading day of the new year. The three major indices were down more than 3% around noon, with the Dow dropping by 700 points.

A banner year followed for the markets in early 2021, which saw a 16% rise in the S&P 500 and a dramatic surge in some tech stocks, even as the Kovid-19 epidemic affected the world economy .

Rapid growth and balloon valuations for stocks have made some Wall Street strategists wary of the market path in the near term. Morgan Stanley strategist Mike Wilson said in a note to clients on Monday that the market was “ripe for a slump”.

Icahn has made a name for itself as an active investor. On Monday morning, Herbalife announced that it was buying back $ 600 million worth of shares from Econ and worker representatives would exit the board. Ikan said in a statement that the time of activism at Herbalife, which he had invested in over eight years, had passed but he planned to remain a small-scale shareholder.

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