King Icahn, biography of a renegade capitalist by Mark Stevens
way of thinking
There is a strategy behind everything. Everything fits. Thinking this way taught me to compete in many things, not only take over but chess and arbitrage
Empiricism says knowledge is based on observation and experience, not feelings
Studying 20th century philosophy trains your mind for takeovers
Chain thinking: just like chess, in any transaction, think of every single possible move and counter move
always consider what might be the worst case scenario and then protect your downside while increasing your control
a civilization starts to decline when a large part of its population stops working
Icahn/Kingsley theory: focus the market’s attention on the disparity in values and someone will buy you out
Take over strategy potential outcome after indicating it as a take over target
acquisition of shares by original suitor
hostile challenger
white knight who will come and free up the locked up value
Prefer stocks with limited downside exposure, gravitate towards out of favor stocks that had already been discounted by the market
When analyzing a company, earnings does not always present a clear picture. Depreciation is paper losses. Cashflow presents a better picture. Key components to analyze
asset
return on equity
cashflow
capitalization
committed the mistake of just focusing on financial engineering to reduce cost, think about how to grow the business
Did not realize after fully taking over a company that the revenue side of the business is usually circumscribed to external factors not under direct management control
On negotiations
everything has to be negotiated
threaten, continuously threaten by painting a very dire picture. This helps frame the alternative which you demand as something very very reasonable
wear down your opponent
answer a question with a question
always push the deal as far as it can without blowing up
wait until a company is so stretched in need of a deal before buying on the most favorable terms
On goal setting
have no fixed goals
see all the possibilities
Princeton liberal arts eduction:
exposure to eclectic mix of human knowledge teaching a student how to think, explore and question rather than prepare them for a specific career
the best thinkers will rise to the top of their chosen careers precisely because they have not limited themselves to narrow courses of study
