NEW YORK: Carl Icahn isn’t forecasting a dramatic stock market drop quite yet but the billionaire investor is still bracing for a market sell-off in the next three to five years, he told Reuters on Monday.

“I am still concerned that one day you’ll see a break like you had a few weeks ago,” Icahn said at the Reuters Global Invest­ment Outlook Summit in New York, “but it won’t come back.”

With the Stand­ard & Poor’s 500 index now up more than 10 per cent for the year and trading at 2,041, many investors have put Octob­er’s short-lived slide behind them, saying low interest rates and a growing mergers and acquisitions boom will continue to fuel the bull market.

But Icahn is more concerned and is predicting a downturn. “It’s really a question of when that is going to happen, in my opinion. It could be three years, it could be three months, it could be three days. But I really do believe there will be a major correction in the next three to five years, at least.”

Even as many investors see blue skies ahead, Icahn is taking precautions. “We short S&Ps against a very large portfolio. We have the benefit of not having to worry that much about hedge fund partners,” he said.

Icahn added he still owns the stocks he loves including Apple Inc but there are some companies trading at multiples around 18 to 19 times earnings and “are mediocre companies.”

A year ago in an interview with Reuters, Icahn helped push the market lower with his comments and he took pains this year to be careful on adding a vague timeline, noting that there are many variables he can’t handicap.

Published in Dawn, November 19th , 2014