“I think the public is walking into a trap again as they did in 2007,” the activist investor told CNBC’s “Fast Money Halftime Report.” “I think it’s almost the duty of well-respected investors, like myself I hope, to warn people, to tell people, that really you are making errors.”
Icahn compared the current market situation to the prerecession days, when mortgage-backed securities were being widely sold. “It’s almost deja vu,” he said. Many companies are selling at huge multiples and reporting earnings that are “sort of fudged” due to various accounting methods, he said.
“I do think you are going to have a dramatic pullback, certain things may happen,” he said. To remedy this, Icahn would like to see the government and regulators look at the way earnings and guidance are reported by companies. (Read more from “Investor: Markets ‘Extremely Overheated,’ Especially in Junk Bonds” HERE)