With the broad market making new all time highs, almost on a daily basis, one issue far from its all time high is Icahn Enterprises LP (NASDAQ: IEP).  Since catapulting to 149.77 on December 9th, the issue has declined  to 113 and shows no sign of reversing course.

All of this taking place with many of Uncle Carl’s top holdings trading at 52 week, multi-year, or all time highs.  For example, his well publicized purchases of Apple (NASDAQ: AAPL), Herbalife (NYSE: HLF) and Netflix (NASDAQ: NFLX) have made incredible moves, aided by Tweets revealing his investments in these issues.

Since the IEP share price is not following his stable of investments, there must be another reason for the precipitous decline in its price over the last 13 trading sessions.  That reason – the “Icahn herd” is getting taken to the cleaners.  Investors looking to emulate his performance simply piled into the issue with reckless abandon.

Obviously, these uninformed investors paid little or no attention to IEP’s Net Asset Value (NAV) which was approximately $75 as of November 30th.  Simply stated, the “herd” was paying up to double the NAV to “rub elbows” with the biggest star on Wall Street. 

Of course, IEP should be afforded some sort of premium because of Icahn’s stellar performance, but paying double the NAV for any issue seems a bit ridiculous. 

Keep in mind, IEP is still up 250% for the year, far outdistancing the broad market, so any further pullbacks for the issue can be construed as healthy.  However, the herd that joined the party a little bit too late is significantly under water here. 

Perhaps once the weak hands are finally forced out, which may be near the major support level of 110, IEP may resume its rally.  However, this journey north, if it indeed does take place, may be greeted with many more sellers than on its first occasion.  The reason for this being that buyers that got burned the first time, will be utilizing any rallies to exit the issue.

It is a dangerous game chasing stocks because when the momentum swings the other direction it can get ugly in a hurry.   With the 7% pullback in Twitter (NYSE:TWTR) today, you wonder if the trading herd is caught again?