In an interview to appear tonight on FOX Business Networkās (FBN) Cavuto (6PM/ET), billionaire investor Carl Icahn (Trades, Portfolio) speaks with anchor Neil Cavuto about his position in Apple and about the economy overall. Icahn discusses Apple, saying, āI absolutely have no intention of sellingā Apple stock and that, āI think Apple is one of the cheapest stocks around.ā When asked about Appleās management, Icahn says, āWe like the management there. It is a little unique for us because usually we donāt like the manager.ā Ichan goes on to speak about the Volcker Rule and says, āI think the Volcker Rule is fine. I think what they should do is go back to Glass-Steagallā¦a lot of my friends at these investment banks are going to be real mad at me for saying it, but I really think that was one of the problems in ā08.ā When asked about New York City Mayor Bill de Blasio, Icahn says, āIām not a fan of the mayor.ā
Excerpts from the interview are below.
On ending his buyback fight with Apple (AAPL, Financial):
āI'm not going anywhere. I'm not leaving. I haven't sold one share, nor do I intend to. I think Apple is one of the cheapest stocks around and I've said that - Tim Cook and I agree on that. It's very undervalued.ā
On whether Apple at $530 is still cheap:
āYes, I think, you know, sometimes you make money when you look at things and you can see it on the back of an envelope and make it simple, a no-brainer. Netflix was one. Chesapeake was one. A lot of these that we do, Apple is exactly one. It's just extremely cheap.ā
On Appleās management:
āWe like the management there. It is a little unique for us because usually we donāt like the manager, usually, but in this case we do like the management. You know why itās simple for the last five years Apple has spent over $18 billion in research and development, now where is it. Now some of it is in the products they are making they build the product up they go from iPhone 5 to iPhone 6 is coming out, but a lot of that has not been seen by the shareholders.ā
On Apple CEO Tim Cook:
āTim and I we get along pretty well. I plan to talk to him this eveningā¦I think, I mean I am hoping to speak to him this evening. We called and missed each other.ā
On whether he has any intention to sell any of his Apple shares:
āI absolutely have no intention of selling them.ā
On JPMorgan Chase (JPM, Financial) CEO Jamie Dimon being awarded a $20 million package:
āI donāt really want to get into any area, Iām not going to talk about any specific companies... I personally think banks in general, and I am good friends with a lot of bankers may hate me for this, but I think the Volcker Rule is fine. I think what they should do is go back to Glass-Steagallā¦ and a lot of my friends at these investment banks are going to be real mad at me for saying it, but I really think that was one of the problems in ā08.ā
On the possibility that New York City Mayor Bill de Blasio might raise taxes:
āIt doesnāt bother me at all.ā
On New York City Mayor Bill de Blasio:
āIām not a fan of the mayor but thatās for different reasons. We do a lot in charter schools, when you get away from bureaucracy in education, itās amazing what those charter schools have accomplished, treat āem like a business almost and we have eight charter schools. It costs me money obviously, but I think itās well spent and those kids ā the middle of the Bronx- read as well as the kids in Scarsdale on all the tests. Down the road, the city school, same thing, same environment, same block they canāt read or write. Thatās what we should have, more charter schools.ā
On whether he doesnāt trust Republicans or Democrats:
āItās not donāt trust, I think the Republicans muffed the whole election race, Iāve never seen anything muffed worse than what happened in the election where you go to the middle class guy and the Republicans go and start telling him hey we gotta pay back the deficit, we gotta take away your entitlements, we gotta worry about the rich guy cause heās good for you. Itās like in the middle ages, they would tell the peasants itās good we can hang your children, itās good for you. God wants us to do it.ā
On whether the rich should do more:
āYeah, but itās not so much they should do more. I really do believe in a meritocracy, if someone really takes risk and invests money, what the heck he should get the fruits of it. I mean I have taken a lot of risk in my life, weāve made a lot of money and by the way they keep saying I am greedy and trying to make money, all the money I have is going to the Giving Pledge and itās going back to society for the most part.ā
On whether his children know he is giving money to the Giving Pledge:
āThey always knew that, they always knew how I felt. I donāt believe in this huge inheritance because money can also be bad for kids. I have seen friends of mine giving money to their kids. My kids are going to be well off and my son has already made a great deal by buying Netflix, he and his partner bought Netflix.ā
On his legacy:
āWhat I am doing actually here and I know it sounds corny to you but I think if my legacy could be to change what goes on in corporate America, to change this reprehensible system that we have that only enriches some of these lawyers and that the poison pill is killing the little guy and Iāll tell you why, whatās gonna happen is if you have this pill and you keep invading with the pill and saying oh we donāt like these bad raiders, whatever they call them, which is nonsense because look at the record we have and look at what weāve accomplishedā¦a lot of these pension funds are beginning to understand hey we have to do something, we are underfunded and hereās what happens, we do get calls, itās coming around where some of these mutual funds, hedge funds say āyou ought to take a look at this one Carlā and we canāt come out. Itās like in the House of Cards, you could say that but we canāt so you could go do it. I am like the guy that you go to in the schoolyard, go beat up the bully, weāll stand behind you, weāll hold your books for youā¦I donāt mind beating up the bully.ā
On how he wants to be remembered:
āIf I could be remembered, as somebody who changed the rules of corporate governance to make management accountable. And if they are accountable, you will see that, companies will flourishā¦.itās like if you inherited a vineyard and the guy that runs the wine was out there playing golf all day, Iād say well why do you keep him?ā
On whether he doesnāt want the label of being a corporate raider
āI donāt know what raider meansā¦the word raider, it means that we take money from companies. We built up companies. Look I could show you company after company that weāve made a fortune for the shareholders and built them up.ā
On whether the conduct of AOL CEO Tim Armstrong would hurt investors:
āIām not going to get into that because I donāt really know the company that well and I donāt want to get into anything I donāt know wellā¦I donāt know the situation. I mean I read about it in the newspapers.. I think you donāt fix a company that is doing well. We donāt micromanage, Iām not going to get into personal situations.ā
On whether this is a market that loves goodies:
āI think that you shouldnāt be all that sanguine I mean look Iām happy when the market goes up, right now though all the numbers point out to me that at 17, 18 times earnings youāre paying a hefty price. Iām better off if it goes up but we keep everything pretty well hedged because I think, our returns by the way were 35% for five years, annualized they would have been a lot higher if I didnāt keep a big short position on it.ā
On whether he believes statements that last yearās heady advances were built on air:
āYes I do. I think that a lot of the heady advances, itās like having a patient and youāre giving a patient a new kind of medicine and nobody, including, and I think Bernanke did a great job by the way Iām not faulting Bernanke, I think he saved the country. But right now I think this whole injection of capital is like giving somebody sort of like a heroin and you donāt know what itās going to do to them. I mean itās a new medicine, think of it maybe not heroin, but itās a new medicine. Thereās so much money being pushed in and it all relates to one thing I think the credibility of the American dollar. I mean you think about it a dollar is a piece of paper, people give you food all over the world for it, people give you clothing, people give you technology for it. What happens if they start wondering how good is a dollar. And you canāt just keep printing forever you canāt do it. Obviously when interest rates are 3% or 3.5%, Iām a businessman I look for everywhere to invest. I look to borrow money. Money is a commodity and Iām buying money very cheaply when I buy at 3, 3.5, 4, or even 5%. I mean if I can make returns of 28% annualized well of course Iām going to do it, Iām going to invest but the trouble is that is a false type of investment possibly and especially when you have mediocre managements in a lot of companies taking this money and everybody says let them alone, let them alone, let those guys invest.ā
On managers who think theyāre geniuses:
āYes, a lot of them start believing it because they are the CEO they are accountable to nobody in many cases and therefore the guys on the board itās sort of a fraternity.ā
On whether he worries about macro stuff like the debt:
āI worry about it to the extent I can do something about it and what I can do about it I put on different credit spreads I mean this is something a little arcane and I worry about it for that purpose and thatās the reason Iāve done well in bad markets as well as good generally except ā08, nobody did well in ā08.ā
On whether he pays attention to Washington:
āWell I do pay a lot of attention to it but it doesnāt do me much good. You can pay attention to it but there are so many variables that are going on that anybody picking what the markets going to do next month even next year is foolish, its too many variables.ā
On the possibility that the government might shut down again:
āYouāve got a myriad of problems that could come up from left field that could shake the market up and you have to be ready for that.ā
On his opinion of the way President Obama has been shepherding the economy:
āYou know I will tell you that I will say that I think Obama could have done a lot more. I think he could have done a lot more in investing, in going in and really putting money out there. I think he stressed Obamacare too much.ā
On whether he likes the healthcare law:
āI donāt necessarily, Iām not one of those guys that hates it, I think that Obama had to do something like that. I donāt think itās that bad. Iām no expert on it but I donāt think businesses should be a medical provider. Look the CEO has enough trouble with his own business theyāre not doing so well with it, what the hell is he a medical provider for?ā
On businesses saying that Obamacare is costly:
āIād like to understand what theyāre saying; I think itās just another excuse if theyāre not having good earnings. I really think, my opinion, Iāll go back to my basic opinion which is a no brainer. Hereās a no brainer, I can make and I am no genius at managing companies, I can go into a company, almost any company that we go into and save 30% make that company turn it around which Iāve done over and over and over again and Iām not a managing genius, it tells you one simple thing, at companies, many of them are terribly run and there is no accountability. And here is why the little guy is going to get hurt I know it sounds corny as hell and Iām going to say it to you I know this sounds corny, Iām a kid from Queens, I grew up on the streets, only in this country, this great country, only in here could I have done what I have done. I could never have done it in any other stratified society and I hate to see us lose our hegemony it bothers me.ā
On what it means for us to lose our hegemony:
āWe are now the foremost country in the world but as you have seen in The Wealth of Nations, you read Paul Kennedyās book, the downfall of why these major economies fail and you see that they go for 300 years or 200 years and then something happens to the meritocracy. A country does great when you have a meritocracy like in this country; the right guy gets to the top. We donāt have that now. Right now our corporate leaders are not the right guy. They are the right guy for the fraternity house. Not every one of them but many of them. They are the guy that was the president of the fraternity, knows how to get along, and then starts believing heās a genius which heās not.ā
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