Tuesday, December 7, 2010

Mr. Carl Icahn Lecture

Mr. Carl Icahn made his fortune buying undervalued companies that were poorly managed. One can feel pretty pessimistic listening to his lecture in Mr. Robert Shiller’s class at Yale. He stresses that America cannot compete because many companies are undermanaged. He also believes there is no accountability or corporate democracy in America. Interestingly, he admits he is not a manager, but instead puts managers in place who change the structure of the companies he invests in.

Some other topics he discusses are that America is overleveraged, it is very questionable Americans will be able to pay back their debts, and the housing crisis is a mess. In addition, he still believes making a career on Wall Street is a good choice.

Some of his positive influences in life are Aristotle’s Nicomachean Ethics and Rudyard Kipling’s poem IF. He mentioned that he reads IF from time to time. Mr. Icahn also suggests to the students to not be overconfident in their abilities when times are going well, and to not get too down when things are not going well. In addition, he suggests that by working hard and having faith in your abilities is a good way to be in life.

When asked about poor corporate governance in America Mr. Icahn mentioned that Canada and England have better models. He also felt that poison pills and staggered boards are some examples of how companies protect themselves and entrench their managements.

I really did not learn very much from his lecture, perhaps because I am familiar with his past. I am, however, interested in reading Aristotle and will turn to that at some point in the near future.

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