Legendary Wall Street trader Carl Icahn’s long-standing bet against equities markets has continued to cost him. His investment fund is heading towards its fourth annual loss in the last six years as the stock market soars.
Icahn’s investment fund lost 7.3% in the third quarter of this year and is down 15.6% in the first nine months of 2019, according to an Icahn Enterprises report that was filed with the Securities & Exchange Commission on Tuesday.
On an investor call held on Tuesday, an Icahn Enterprises executive, Keith Cozza, said the investment fund’s “negative performance in Q3 was driven by net losses in our short equity index positions and certain core long equity positions.”
Icahn’s long-held stake in Herbalife, now his investment fund’s second-biggest position, has hurt Icahn’s trading performance this year. The stock is down 24% in 2019. But the core issue for Icahn has been his persistent bearishness on the stock market.
For years, Icahn has been skeptical of this era’s bull market in stocks. He has hedged his portfolio with short positions against equity indexes. That bearishness helped fuel three straight years of annual losses, including down years of 20% and 18% in 2016 and 2015.
Last year, as the U.S. stock market tumbled in the fall, Icahn’s investment fund finally benefited from its short positions and finished 2018 up 7.9% while many other traders were losing money. But the stock market has come roaring back in 2019.
Nevertheless, Icahn is sticking to his short positions. Icahn Enterprises said on Tuesday that Icahn’s investment fund continues to be defensively positioned with a net short exposure of 16%.
At 83, Icahn still relishes trading financial markets. But the billionaire trader is still heading for a life change. After a lifetime in New York, Icahn is moving to Miami and has even started thinking about succession issues and the idea of handing things over to his son, Brett. For now, however, Icahn remains very much in charge of his investment operation.