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Steve Eisman of “The Big Short” fame told the Wall Street Journal his current investing outlook.
He calls his thesis “revenge of the old school,” noting he likes “old economy” stocks.
Eisman, who was played by Steve Carell in the movie, also said there is no new housing crisis.
Bond yields are hovering near 5%, stocks are under pressure, and the housing market has frozen over.
Amid the tumult, investor Steve Eisman, known for his bet against collateralized debt obligations backed by soured mortgages ahead of the 2008 crisis, shared his market outlook with the The Wall Street Journal.
Eisman, who was depicted by Steve Carell in “The Big Short,” is now a managing director at Neuberger Berman. He was one of a handful of investors who famously profited via prescient bets that the housing market was in a bubble that was about to burst.
But now, with low home inventory, mortgage rates at 8%, and borrowing costs climbing, he said there is no housing crisis looming on the horizon.
He’s instead turned his focus to the debt market, the Journal reported, and he’s buying bonds for the first time in his career. To play the government’s big spending spree, he’s leaning into an investment thesis he calls “revenge of the old school.”
“This is the first industrial policy in the U.S. we’ve seen in several decades,” Eisman told the Journal. “The money isn’t spent yet — it’s the government, it doesn’t take a week. There has been no revenue impact at this point and I don’t think most of the spending has been embedded in any stocks.”
So-called “old economy” stocks, in his view, include names in construction, utilities, and materials.
Meanwhile, he’s not looking to buy bank stocks or hypergrowth stocks. He thinks that era of investing is over.
“What does Vulcan Materials do?” Eisman said. “It makes rocks. This isn’t the nitty-gritty technical aspects of AI. The fundamentals of these companies are not difficult to understand, and they will tend to have the wind at their backs.”
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