Carl Icahn, the billionaire investor who last week bought a 13.5 percent stake in SandRidge Energy, said the market’s rise to record highs shows signs of euphoria, when investors think they can do no wrong.
“I really think even though earnings are going to be very good ... I just think this thing has gotten into a euphoric state," Icahn said on CNBC. "It's run away and there might be a big correction but I can't say it's insane."
The Dow Jones industrial average had its best day of the year on Thursday, rising more than 1 percent to surpass 24,000 for the first time. Investors bid up shares on optimism that Congress would approve tax cuts.
The Standard & Poor's 500 index has risen 18 percent this year, while the Nasdaq has climbed 27 percent on the strength of technology companies like Apple and Google.
President Donald Trump took credit for the market gains, saying in a message on Twitter that had the Democrats won the presidential election the market would be down 50 percent. Icahn was an adviser to Trump on regulation until stepping down in August amid criticism for a conflict of interest.
Icahn said Trump’s pro-business agenda would boost economic growth. Trump, a political outsider who never held a public office, ran on a platform of creating jobs, boosting wages and spending $1 trillion to rebuild roads, bridges and airports.
"I really thought Trump was really going to change the landscape, and he certainly has gone far to do that," Icahn said.
Icahn also said that the electronic currency bitcoin looks like it’s in a bubble. On Thursday, the currency fell as much as 20 percent from a record high of more than $11,000 the day before. The wild swings aren’t unusual for the cryptocurrency, which is thinly traded and highly speculative.
"It's sort of amazing to me," Icahn said. "If you read history books about all these bubbles, like in Mississippi — where John Law went around selling all this land in Mississippi that was sort of worthless and the French were going crazy giving him all this money. And then one night it all blew up ... to me, this is what this is."
Icahn has made his fortune in buying stakes in companies and pushing for changes that unlock value for shareholders, such as cutting jobs and making managers work more efficiently. He is currently embroiled in a dispute with SandRidge Energy and its plan to acquire Bonanza Creek Energy.
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