Tony Robbins: How Wall Street's Activist Investor Protects Shareholders

Life Coach
When preparing to write his new financial advice book, "Money: Master the Game," Tony Robbins paid a visit to the man often known as "the activist investor": businessman Carl Icahn. Robbins explains how Icahn's investment philosophy influenced the writing of the book.
  • Transcript

TRANSCRIPT

Tony Robbins:  Well one of my favorites is Carl Icahn.  Time Magazine called him the master of the universe on the cover of Time Magazine.  And I’ll tell you when I first went to meet Carl most people know him as a pretty intense guy.  I walked in that day with my video crews you guys have here and he says I want all these guys to leave.  I said what?  He said I don’t want a video crew.  I said but you agreed to it this morning.  He said I don’t care.  I don’t want it.  I said okay, well how about if my audio team comes in.  And he said no audio team.  I said well what am I supposed to do here?  He goes bring a pen and paper.  You’ve got ten minutes.  And, you know, I scheduled my meetings for 45 minutes and to go deep they usually go three hours.  But to his credit, you know, he’s had so many people attack him that he needs to know what you’re really about.  When he saw I was sincerely about teaching what he knows to individual investors and really empowering them he became very passionate and he gave me almost three hours.  He endorsed the book.  He’s been extraordinary ever since and has actually become a friend.

So Carl is a teddy bear underneath and he really does care.  But his results are unquestioned.  As I said earlier how about a 1600 percent return if you’d invested with him over the last 13 years versus 75 percent for the S&P.  As I said since 1968 a 30 percent compounded return if you’d been with him during that time, outstripping even Warren Buffet.  But what’s interesting about him is he really believes that the challenge in stock and in business is that it’s an old boys club.  That’s his view.  And that what happens is the people that get elected are the people the most liked and the board does what’s best for the board.  And that, you know, there’s so much that isn’t really looking out for the individual investor so that’s what made him an activist and he’s very intense and he goes in and he buys enough stock to have an impact and shakes their world.  Lets them know that they’re going to be fired unless, you know, they make some significant changes.  And the results of what he’s produced though are incredible.  A lot of people say he’s just got in and out so that’s why I put in the book an actual track record.  You see he stays with most of these investments for a very long time. There’s very few that he goes in and out.  In fact a Harvard law professor, I put the study in the book shows that of over 2,000 activist interventions that have been done the vast majority of them have made the company much more profitable for almost a decade afterwards, not just for a few months or a few years.

Because what happens is management is what maximizes resources in a company.  And when management gets unhungry or comfortable or maybe supporting a certain strategy or approach you’re not going to get the most out of it just like the rest of us as human beings.  And Carl is one of those guys that comes and shakes that stuff up. And when he comes you know things are going.  The day that I go into see him he just recently had done a Tweet saying that Apple was undervalued.  And within two hours of that Tweet Apple stock went up 17 billion with a B, billion dollars in value by one Tweet.  And people said oh, he did that to manipulate the market.  He didn’t manipulate the market.  He stayed in.  He’s still in.  He kept on buying more and more of the stock even as the price went up because he thought the company’s really worth it.  And in Apple’s case he was pushing them to try and release a certain amount of money to shareholders in the form of dividends.  I think he asked for 150 billion.  And I said well did you really think you were going to get that?  He said no, but I figured if I pushed 150 billion maybe I’d get 70, 80 or 90 and I think he got 90 billion if I remember the right numbers.  The numbers are so huge it’s mind boggling.

But he’s still with them.  The day I visited with him he closed out on a stock that he put in I think it was 30 million and he made 2 billion in 18 months.  It was called Netflix.  And he shared with me, he said Tony, you know, when I took over Netflix I said do you always, you know, mess with the management?  He goes not if they’re doing a great job.  He said that’s people’s misunderstanding about me.  I look for great companies.  And if the great company is being managed well I’m just there to make sure they keep being managed well.  And he said with Netflix he said he explained to me that the chairman of Netflix and CEO of Netflix came and was sitting right where you are right now Tony.  And he said, the guy said to me look Carl, we’ve had 100 percent increase in the stock in six months.  And he said do you really need to work to change the board right now?  And Carl said, I looked at him and I said I have a simple rule.  It’s called Icahn’s rule.  Anybody that makes me a billion dollars in six months I don’t punch them in the mouth.  So Carl’s a character.  He’s amazing.  He’s brilliant but he’s out not just for himself.  He’s truly out for his investors.  And anybody that’s stayed with him has made a fortune.   He’s also if you’re watching this one of the only hedge fund guys you can get access to without hedge fund fees.  So take a look at that in the book.  I explain how you can do that. There’s no other hedge fund member I’m aware of that you can do that without having to pay their 2 and 20 if you know what that means.

Anything he moves into you probably want to take a look at because if you look at the history of where he’s invested, the day he invests and the day he got out – if you followed that pattern – he said so himself in the interview – you’ve had a giant return.  I forget the number but it’s in the 20 percent range that’s there.  But I think also he’s inspired another group of activists.  He’s looking out, getting other people to look out for investors.  Coca Cola, one of the, you know, greatest companies in our history in terms of success anyway has recently gone to – they were creating out a 24 billion dollar campaign for the executives in the company to basically give discounted stock.  It would reduce the value of the company by that much.  And Warren Buffet is, you know, the largest shareholder there and he didn’t say anything.  And Carl went a little crazy and he’s willing to say anything.  And he wrote to The Wall Street Journal.  He wrote to Warren Buffet and he published it and said how can you let this happen?

And Warren abstained the vote and said I don’t agree with it but he abstained, he didn’t vote against it.  And, you know, Carl was like that’s not right.  This is not right for investors.  So I would say listening to what this guy says – he’s not always right but he’s somebody worth looking at because when he’s looking at a company there’s likely opportunity and it’s also interesting to see some of the people now, younger people that are starting to become investors that are tackling some of these challenges like Coca Cola and really bringing attention to these things so investors can be protected and so investors can get the returns they deserve.



Directed/Produced by Jonathan Fowler, Elizabeth Rodd, and Dillon Fitton