”The cardinal rule is to have enough capital at the end of the day.”

Capital preservation is of utmost importance. This is what every successful investor and trader will say. First, seek to protect your capital- before even thinking about profits. No capital=no investment=no profit.


”I look at companies as businesses, while Wall Street analysts look for quarterly earnings performance. I buy assets and potential productivity. Wall Street buys earnings, so they miss a lot of things that I see in certain situations.”

This is similar to what Warren Buffet and other successful investors do. They look at investing as buying a business.

 
”With some exceptions, the wrong people are running U.S. companies. It's been that way for years, and it hasn't gotten much better.”

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”Too often it's not the most creative guys or the smartest. Instead, it's the ones who are best at playing politics and soft-soaping their bosses. Boards don't like tough, abrasive guys.”

Company managements will not always take shareholders’ interests first. This is the agency dilemma, but activist investors like Icahn at times get to replace unproductive managements.


”We're not about liquidating companies, but if you do that, why is that terrible? We're not blowing up the factories. The person who buys it should be able to make the asset more productive.”

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"This conglomerate concept doesn't work, there is no synergy - just a bunch of people spending a large amount of money that should be spent on running different companies well."

At times, it is better to sell a part of the company and invest the cash elsewhere. The bigger doesn’t automatically mean better. Often, mergers destroy shareholder value.

 
"Mutual funds are becoming more attuned. If you have the capital to hold out, you will win in the end."


Mutual funds, run by competent managers, offer a great alternative to investors who are too busy to seek investments themselves or lack investment skills.


In summary:
 

  • The first step to success is preserving your capital
  • Look at investing as if it were your own business- because it is
  • Company management will not always act in your favor
  • Bigger company doesn’t always mean better company
  • Consider mutual funds as an alternative


Related articles on this site:

What Carl Icahn Has to Say about Investing


Carl Icahn is a well-known investor. He likes to get actively involved in the companies in which he acquires stakes- whether the managers of these companies like it or not. 

Find out here how this trader made millions in the market. All verified track record!

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Icahn is known for a variety of tactics, including hostile takeovers