Billionaire Carl Icahn is betting on Florida real estate

Billionaire Carl Icahn has announced a tender offer for the common stock of WCI Communities Inc. at $22 a share. Since last year, Icahn has been buying stock of WCI (NYSE: WCI), a Bonita Springs-based homebuilder and real estate services firm with several communities in the Tampa Bay area. He controls nearly 14.6 percent of the company's outstanding shares, according to the most recent disclosure he has filed with the Securities and Exchange Commission.

"If you look at long-term trends and don't think about short-term turmoil, that is where the risk returns can be greatly in your favor," Mr. Icahn said in an interview.

Mr. Icahn explained it this way: "My investment philosophy, generally, with exceptions, is to buy something when no one wants it. We made a fairly large investment and took control of several energy companies seven or eight years ago when they were way down. Housing is somewhat analogous."

Icahn noted the medium- and long-term factors that should help Florida real estate: aging baby boomers looking to head south to warmer temperatures.

A contrarian seeks opportunities to profit from situations when the crowd mentality leads to unreasonable valuations for assets, either on the upside or the downside. In 2009 will we be saying, "I wish I had bought in 2007 when everyone else was selling"?