Perhaps it’s time to shift our focus away from macro and trying to predict the next black swan event and focus on investing in the themes and companies best positioned for the new normal of higher inflation, rates, and the cost of capital.
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But largely, our work suggests that brands with strong balance sheets, free cash flow generation, and large untapped market opportunities will exceed lowered expectations and their stocks will turn in much better years versus 2022. We expect volatility to stay elevated because there are still some outstanding items needing more clarity. While the world is still waiting for the next shoe to drop in macro, high quality companies continue to perform well, adapt to the changing environment, and their stocks have had nice recoveries thus far in 2023. Macro can only carry us so far before the company fundamentals and their long-term opportunities again take the wheel. In the investment business, great opportunities are presented when markets struggle and fall. While it’s quite natural to feel nervous driving a car after a car wreck, often the only thing holding us back is our fear of yesterday’s boogie man. In my conversations with advisors and analyzing money flow data, there appears to be lingering apprehension for risk-taking initiatives. Very difficult years tend to create investor PTSD, which often holds them back from uncovering opportunities. The difficulties of navigating markets in 2022 are well chronicled. Investors are still focused on macro versus company micro fundamentals.
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But now their battle of Wall Street titans appears to be back in full force.Uncertainty & 2022 macro PTSD is still high across markets.Įvery portfolio deserves an allocation to the smartest investors & their strategies.Īlternative asset managers are embedded with a coiled spring of future earnings The two claimed they had made up in 2014, sharing a stage at a conference broadcast by CNBC.Īckman had previously had taken a soft shot at Icahn over the Hindenburg report, saying there was a “karmic quality” to it. Sensing weakness, Icahn took a long position in Herbalife’s stockĪnd helped deal Ackman significant losses on his bet over time. The litigation between them went on for years.īut their animosity for one another hit a crescendo in 2013, when Bill Ackman publicly waged a $1 billion short-selling campaign against Herbalife. The bad blood between Icahn and Ackman goes back to a business dispute the two had over a 2003 deal involving Hallwood Realty.
“Transparency is not the friend of $IEP having caused a more than 50% decline in the shares, which has caused Icahn to post more shares, now more than 65% of his holdings,” he said in the tweet. Icahn’s problem now is that his system has been outed by the short seller, Ackman wrote. “The yield is generated by returning capital to outside shareholders, which is in turn funded by the company selling stock to investors,” said Ackman. “My understanding of 13D SEC rules is that they require disclosure of sources of financing and even copies of financing agreements, although many investors ignore these requirements.”Īckman also questioned how IEP’s large dividend yield is feasible, as it’s not supported by operating cash flows. Ackman also expressed his surprise that Icahn has not disclosed the margin-loan terms, or even said who provided them.
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