Which famed investor has achieved the best returns -- activist investor and Icahn Enterprises (IEP 0.17%) founder Carl Icahn or Berkshire Hathaway (BRK.A 0.00%) (BRK.B 0.19%) CEO Warren Buffett? This is an argument that has recently surfaced after several articles revealed that since 2000, Icahn's net worth has more than doubled, up an astonishing 131%. However, Buffett's net worth has only expanded 26% over the same period.

Now, there are some issues with this comparison, the largest of which is the size of Buffett's portfolio. You see, 131% of Buffett's net worth would be more than $70 billion dollars; opportunities for that much profit are simply not available. Case in point: 400 of the S&P 500's constituents are worth less than $70 billion.

Opportunities missed
Still, Buffett's low returns in comparison to Icahn are surprising, considering the opportunities he has had available to him. Specifically, Buffett acquired Burlington Northern Santa Fe Railroad as a play on the United States' economic recovery back in 2009. However, Icahn's holding of American Railcar Industries (NASDAQ: ARII), acquired as a similar play on the U.S. economy, has proven to be highly lucrative during the past few years. It was an opportunity that Buffett himself could have easily taken.

American Railcar is a classic play on the oil boom in the U.S. The company manufactures tanker cars, which have been in demand due to the rising need for oil transportation combined with the lack of suitable pipeline infrastructure. Icahn began building his stake in American Railcar during the fourth quarter of 2011, when the company was making a loss on a trailing-12-month basis. However, the company was trading around book value.

Now, American Railcar has gotten into the highly lucrative business of railcar leasing, and Icahn is reaping the benefits. In particular, the company recently reported third-quarter results that showed a nearly 100% year-on-year rise in leasing income. What's more, leasing revenues are usually based on contracts that lock in revenue for more than five years. This means American Railcar should be able to reap the benefits for some time to come.

Different style
Having said all that, Icahn's style of investing is completely different from Buffett's. This has led the two billionaires to clash over Icahn's drive to convince Apple CEO Tim Cook to implement a larger stock buyback with the company's impressive cash pile. However, this was somewhat hypocritical of Buffett, who had previously advised Steve Jobs to undertake a buyback if he thought his stock was undervalued.

Nonetheless, while Icahn drives his own returns by "going activist," Buffett prefers to sit on the sidelines and let management do their jobs.

Icahn's activism involving Transocean (RIG -0.18%) have kicked the company back to growth. However, Icahn only got part of the changes he demanded at the beginning of this year. While the board voted to replace the CEO with an Icahn-backed nominee, demands to raise the dividend to an annualized payout of $4 per share were rejected.

Based on Transocean's solid third-quarter results, Icahn's CEO knows what he is doing. That said, the $2.24 annual dividend will cost the company approximately $800 million a year based on the 360 million shares in issue. In my humble opinion, this is an expense the company would be better off without. What's more, Transocean is already struggling with an aging drilling fleet, and this $800 million a year would be better spent acquiring new vessels. Based on the fact that Transocean's peer Rowan Companies paid approximately $600 million per ship for its new high-spec ultra-deepwater drill ships, Transocean could acquire two or three new drill ships over the next two years using the cash it is instead using it to pay the dividend.

Transocean recently compromised with Icahn by agreeing to propose, and support, hiking the dividend to $3 at its annual general meeting.

Longer-term outlook
Despite Icahn's impressive returns, you can't help but think that Buffett's returns will be better for longer. For example, if we compare the performance of Icahn Enterprises and Berkshire Hathaway since 1990, we can see that Berkshire's investors have seen the value of their holdings rise 2,245%. Meanwhile, shareholders of Icahn Enterprises have seen the value of their investment rise only 500% during the same period. While these returns prove nothing about future performance, it's the volatility of these returns that is interesting.

Indeed, if we compare the beta values of the two holding companies, we get a different picture. Beta is a measure of volatility, and in the words of Investopedia:

You can think of beta as the tendency of a security's returns to respond to swings in the market. A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market."

According to Yahoo! Finance, Icahn Enterprises has a beta of 1.7 and Berkshire has a beta of 0.2, indicating that Icahn Enterprises' is much more volatile than Berkshire. 

So this indicates that while Icahn's returns may currently be better than Buffett's, things could change quickly.

Foolish summary
Overall, comparing Carl Icahn to Warren Buffett is like comparing chalk to cheese. These investors have different styles and different objectives, and Buffett has a significantly larger pile of cash to play with. Nonetheless, you can't argue with facts, and the fact is that Warren Buffett is one of the richest men in the world. That didn't happen by chance.