📖Carl Icahn
Buy Below Intrinsic Value
Buy only at prices well below intrinsic value.
The cardinal rule of investing: buy only when the price is significantly below your conservative estimate of intrinsic value. This builds in protection against error.
🏠 Everyday Analogy
📖 Core Interpretation
In Buy Below Intrinsic Value, Carl Icahn focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Buying below value builds in protection against error.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Yahoo Stake and Microsoft Bid Aftermath (2009)
Icahn accumulated a major Yahoo stake before and after Microsoft’s failed 2008 bid, pushing for strategic changes and board representation over several years.
✨ Outcome：Despite volatility and leadership turmoil, holding through restructuring and Alibaba value realization produced a substantial long‑term gain.
2
Herbalife Short-Squeeze Battle (2012)
Icahn built a large long position in Herbalife opposite Bill Ackman’s high-profile short, holding through regulatory scrutiny, public battles, and price swings.
✨ Outcome：Persistence paid off as the stock rebounded, dividends and buybacks continued, and Icahn exited gradually with sizable profits.
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