Here’s a late-summer patio game for the Wall Street set as they wind down another summer in the Hamptons.
Who will go down in history as the superior investor? Warren Buffett or Carl Icahn ? Over a first glass of Domaine Ott rosé, the heavy betting would undoubtedly be on the Oracle of Omaha.
By most accounts, Buffett is the greatest investor alive. It would almost be heresy to suggest otherwise.
Well . . . maybe not. A look at the respective records of Icahn and Buffett might sway the cognoscenti in the other direction.
Could Icahn, New York’s third-richest man, with a net worth north of $20 billion, actually be a better investor than Buffett?
He may well be, and if his investment returns continue over the next decade at the pace they have been in this millennium, Icahn’s investment machine could overtake Buffett’s, making Icahn the richest investor in the world.
How is this possible? At first blush, the wealth gap between the titans seems yawning. With a net worth of $53 billion, Buffett’s wealth is still 2 1/2 times that of Icahn.
But while the men both have enviable compounded annualized returns of more than 20 percent over the past 40 years, Icahn not only beats Buffett on that score, according to an analysis by Kiplinger, but also has been knocking it out of the ballpark in recent years.
As a result, while Buffett’s net worth is up 26 percent since 2000, Icahn’s has more than doubled, up an astounding 131 percent.
Despite a Friday setback in his attempted Dell takeover, Icahn’s new status as the jockey Wall Street wants to bet on was readily apparent last week when he tweeted that he had taken a big stake in Apple. The tweet sent the stock soaring to above the $500 level for the first time since January, adding $20 billion to its market value.
Moving the world’s most valuable stocks was once a feat reserved for Buffett. But one day later, when it was learned that the Oracle had taken a half-billion-dollar stake in Canadian energy company Suncor, investors were unimpressed.
Lately, Icahn’s investment tactics have softened a bit while still keeping his laser-like focus on compelling investments.
Meantime, Buffett has been busy with legacy enhancement and pontifications on tax policy.
Icahn-watching has become the most interesting game in town.