Billionaire investor Carl Icahn warned on Monday that many S&P 500 companies are "way overvalued," considering soft-to-weakening economic growth in the United States as well as in emerging markets.
Reiterating his stance on equities, Icahn said on CNBC, "I've been concerned for a few years, and more and more concerned. I think it's very difficult when there (are) so many people in the middle class that really don't have the income that they counted on, pension funds are way underfunded ... in a market, economy that has inflation."
Icahn, chairman of Icahn Enterprises, said he is cautious about the U.S. stock market on a long-term basis, but on short-term period, it's "anybody's guess."
In the interview, Icahn reaffirmed his comments and said interest rates have to rise. He said in this market environment a person has to be a smart investor.
"You have some companies where there are unique qualities that aren't apparent ... that are in front of you and you buy," he said. "But sometimes that takes years and years and years."
Icahn said he runs a large portfolio and that there are a few gems in the market.
Icahn cited Herbalife Ltd., American International Group Inc. and Cheniere Energy Inc. as "uniquely undervalued." He added that it takes "years and years and years" to reap huge profits from activism and that serious investors need to be "extremely patient."
About Herbalife, Icahn declined to comment on Bill Ackman, who has been on the opposite side of the bet on the stock, and added that he stood by his major investment: Herbalife is "undervalued, a good model and gives jobs to a lot of people," Icahn said.
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