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Original title: Wall Street "Wolf King" Carl Icahn: the stock market storm has come

Two weeks ago, the market might have thought that Carl Icahn was a little headstrong. Because the billionaire's hedge fund maintained its preference for shorting in the second quarter, resulting in a net drop of 149% in his stock market investment ratio.

However, unlike other hedge fund managers, Icahn did not create a monthly magazine to explain his investment philosophy. So Bloomberg's Erik Shatzker interviewed him for 40 minutes. In the interview, he not only discussed in detail how Trump and the Republican presidential candidate will affect the US economy, but also shared his original views on the market outlook that is not optimistic in the future.

First, how is the current situation in the stock market caused?

Earlier this month, you and your son Brett issued a joint statement saying: you have no confidence in making a larger investment. Is this because the stock market is overvalued?

Icahn: there is no doubt that I am more careful than before. It is safe to say that there are some promising companies. But I think the S & P is about 20 times overvalued because of zero interest rates. That's what I'm talking about, zero interest rates and a lot of buybacks make it difficult to convert money into capital.

So it's like a wealthy family that rashly decides to borrow money from its mutual funds just to amuse itself. Perhaps doing so will win a good reputation. However, in the long run, it will not be far from bankruptcy. This is the current economic situation. Zero interest rates could create a lot of bubbles.

On the face of it, under the influence of zero interest rate, the market is still high. But if you think about it carefully, you will find that the dollar is now very strong, which is not conducive to the increase in international income. Almost all S & P 500 companies rely on international revenue to survive. Therefore, this situation is very disadvantageous to them.

It's time to do something. As far as I am concerned, this situation is not uncommon. When the stock market looks high, people tend to get carried away and ignore the immediate crisis. But at this point, investors should withdraw their money and stop buying. That said, I'm not sure when the crisis will happen, maybe tomorrow, next week, next month, or even next year. But this will happen sooner or later, so we must be prepared to deal with economic changes.

Almost all CEO understand this problem. They said, "maybe one day with the stroke of a pen from EPA, the regulator, we will go bankrupt or on the verge of bankruptcy." Now, wealth is being lost. Why should we invest more money? Why should we buy more machinery and equipment? As a result, it is difficult for the middle class to find satisfactory jobs in manufacturing. Now, we are not a manufacturer, but a service company. "

What factors do you think will cause the stock price to fall?

Icahn: I think I've been talking about it. One factor driving down share prices right now is that capital spending is falling. Manufacturing is very important in our society. Because sooner or later, people will realize that they can't just send Weibo Corp or send messages to each other on Twitter. It is very good for us to position ourselves as a service economy, and we are indeed a service economy. But what does that mean? Just send more messages to each other? If so, then why does everyone have to work? You might as well just sit and text each other or watch TV. This is what is happening at this moment. Now, capital expenditure is falling sharply. When there was no recession in the previous two years, capital spending fell by 4% in a quarter unheard of. Moreover, production capacity has not increased. In fact, this is the slowest period of economic growth. Both capital expenditure and productive capacity are very important in the capitalist system.

Third, how is the economic and social unrest caused?

Icahn: right now, GDP growth is stagnant for a variety of reasons. But most importantly, it is difficult for middle-class workers to find satisfactory jobs. To some extent, the unemployment figures are not accurate. For one thing, many of them have left the factory; second, the pay for their work is not satisfactory.

I think that by understanding the middle class, we can see why people are against Sanders and Trump, why Britain left the European Union, and why Italy has come to where it is today. At present, the global economy is surging underneath. People hate those who account for the "1%" of most social wealth, and they also hate that the government is indifferent to such a wide gap between the rich and the poor.

Last but not least, most investors are taking advantage of the dollar as a reserve currency, but they don't know how long it will last. Therefore, I think serious problems will break out sooner or later.

[statement] Tencent Securities has obtained the authorization of the self-media, and the reprint needs to be authorized by the original media. This article only represents the personal views of the author and has nothing to do with Tencent.

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