Is activist investor Carl Icahn ’s strategy so simple anyone, even a child, could do it?

Justin Fox, author of The Myth of the Rational Market and Executive Editor of the Harvard Busienss Review Group publications, doesn’t think there is much mystery to Carl Icahn’s investing philosophy, although few have actually generated Icahns level of success.

But regardless of track record, the approach is simple, Fox says. In fact, he thinks his four year old could do the same work.

Carl Icahns investing philosophy

The Icahn method is:

• Buy stock in a company.
• Write a letter to the company’s board demanding that it do something different from what it’s doing (buy back shares. break up, sell out to another company, throw out the CEO).
• Wait a while. If necessary, write another letter, or a few tweets. Go on TV.
• Sell stock in the company.

Fox, like Marc Andreessen, who was the subject of Icahn’s wrath at eBay Inc (NASDAQ:EBAY ) where Icahn thrashed Andreessen ’s reputation through the mud, thinks a rudimentary child, a bully on the school playground, could conduct the Icahn stock investment method.

Fox notes how Icahn has been personally generated massive wealth. In the last handful of years his personal compensation has tipped near the $2 billion mark per year.  But this wealth, which comes from generating positive returns since the 1980s, appears not to be a flash in the pan.

Breaking down Icahns success

Fox breaks down Icahn’s success into six categories which make it

• Luck: A certain amount of success due to a random walk.
• r>g: The rate of return on stocks is higher than economic growth
• Value: He buys low and sells high
• Reputation: When he enters and exits a stock, the market reacts
• Activism: The strategy itself has generated significant returns
• Simplicity: Icahn likes to keep his involvement simple.

Given this as Icahn’s core performance drivers, the question remains can a four year old mimic the performance?

While a four year old may be able to buy a stock, write a letter requesting share buybacks or corporate divestiture, wait and sell the stock at a profit, there would be one element missing. Very few people would pay attention to the four year old. They do pay attention to Icahn, and this is among the most significant aspects of his investing methodology .

To link to the full article, click here .