Icahn’s Investing Style Earned Him 31% Annual Returns For 43 Years

This is Carl Icahn!

He’s known as the “corporate raider” of Wall Street.

He’d hijack company boards, raise stock prices, and sell at huge profits.

Here’s how his vicious and unique investing style earned him 31% annual returns for 43 years:

Most investors make money by selecting stocks with great management teams.

Because they know excellent leadership will lead the company to more profits.

After all, a company is simply a body of people providing value.

Carl Icahn had a different approach.

Instead of investing in companies with an excellent board of directors…

He picked companies with great potential, but terrible management.

Then he’d hijack management and turn things around.

His strategy was ruthless.

He’d start by investing in a company like any other investor.

Once he had a relevant amount of ownership, he’d start making suggestions.

Some of his ideas would reach a consensus among shareholders and be implemented.

Carl was smart.

So his ideas worked, driving profits and raising stock prices.

He earned the trust of key shareholders and continued to buy more stock.

This leads to more of his ideas being implemented and succeeding.

Eventually, Carl would request to join the board of directors.

Despite his success and ownership of the company, he’d commonly get rejected.

Although shareholders liked him for his great ideas and heavy investments, they commonly felt threatened by him.

Carl was aggressive.

He didn’t always earn enough trust to join the board.

Management commonly feared he was only involved to make a profit and leave.

So joining the BoD wasn’t always straightforward.

This is when Carl started using force.

He’d send a letter to shareholders asking them to vote him onto the board.

Although Carl had significant ownership, it was never enough to join the board on his own.

So he swayed investors, who collectively had enough power, to vote him in.

This worked for several reasons:

Carl invested in companies with investors who were already dissatisfied with management

He already proved to investors he had great ideas

He’d promise shareholders that stock prices would rise

Once he was voted in, he had more power to implement even more ideas.

Further improving the company and raising stock prices.

Then he’d sell his shares and profit massively.

As the years passed, Carl developed a reputation for hijacking companies.

Regular investors loved him, but management hated him.

With his reputation, further takeovers via shareholder votes became easier.

Carl didn’t always succeed in joining the board.

But he’d regularly use his brand to successfully trigger shareholder activism.

This means the decisions he wanted to implement would usually come to life.

Companies improved, stocks rose, and he sold at great profits.

Carl Icahn did the exact opposite of what Peter Lynch suggests.

“Go for a business that any idiot can run – because sooner or later, any idiot probably will run it.”

Instead, Carl would overtake idiots and run things himself.

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