Investing Icon Warns of “Major Asset Bubble”

Smart Money

Billionaire investor Carl Icahn isn’t buying the Fed-fueled phony prosperity boom. “We can no longer simply depend on the Federal Reserve to keep filling the punch bowl,” Icahn wrote in a recent commentary.

“I believe that America needs to correct the economic course we are on and push back against the approaching storm clouds resulting from the many problems we face today, including a major asset bubble that continues to grow.”

Mr. Icahn may be a very opinionated investor, but he is right more often than not. Icahn is right that recent Fed-fueled stock gains aren’t translating into real wealth for most. He sees the same dire statistics that we do. Despite huge run-up in stocks since 2009, 85% of public pension funds are headed toward bankruptcy.

How is this hedge fund “Icahn” positioning himself? He sees something big coming. His focus is on tangible assets and industrial producers of basic necessities.

In October 2013, Carl Icahn disclosed that he had bought 61 million shares (a 6% stake) in Talisman Energy (TLM). The upstream oil and natural gas company has a market capitalization of $10.7 billion and a dividend yield of 2.6%.

Investors looking to follow Icahn’s lead might also consider First Trust ISE-Revere Natural Gas (FCG). It’s an exchange-traded fund. FCG’s holdings include a 4.1% weighting in Talisman Energy.