Billionaire hedge fund manager and shareholder activist Carl Icahn sat down for a telephone interview with Reuters’ Jennifer Ablan on Thursday, July 10th. Icahn, who turned 78 in February, touched on a number of topics in the interview, but his main message was to be cautious on U.S. equities markets in the near future.

Carl Icahn
Carl Icahn image via FBN

Carl Icahn on U.S. stock markets

Although he has profited handsomely on the stock market run up of the last couple of years, Icahn is not a perma-bull. In the interview, he warns investors that markets don’t go up forever. “In my mind, it is time to be cautious about the U.S. stock markets,” Icahn said. “While we are having a great year, I am being very selective about the companies I purchase.”

Carl Icahn on Family Dollar

Icahn has morphed from an old-fashioned corporate raider in the 1990s to a politically correct shareholder activist in the 21st century. Over the last couple of years, he has been involved in making deals and pressing for shareholder value in companies such as Dell Inc. (NASDAQ:DELL), Chesapeake Energy Corporation (NYSE:CHK), Netflix, Inc. (NASDAQ:NFLX), Apple Inc. (NASDAQ:AAPL) and eBay Inc (NASDAQ:EBAY).

Family Dollar Stores, Inc. (NYSE:FDO) is the firm currently in Icahn’s sights, and he took the opportunity in the interview to take a few shots at FDO management.

“The leadership, to say the least, is questionable at Family Dollar and it’s been that way for many years,” Icahn said. “Howard (Levine) might be a nice guy but he is far from the right leader for Family Dollar.”

Icahn also commented on the benefits of a merger between Dollar General Corp. (NYSE:DG) and Family Dollar Stores, Inc. (NYSE:FDO), “We believe Family Dollar and Dollar General should merge as they would make for perfect partners. It is obvious that Family Dollar, especially in light of its record and the looming competition on the horizon, could use a partner. However, unfortunately, the announcement of Dollar General Chief Executive Rick Dreiling’s retirement is a setback to an activist player like us that would like to accelerate this process but it doesn’t mean it is insurmountable on a long-term basis”.