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Renowned investor Steve Eisman, known for his role in “The Big Short,” recently shared his current investing outlook with the Wall Street Journal.
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Eisman refers to his investment approach as “revenge of the old school” and expresses a preference for “old economy” stocks.
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In contrast to some concerns, Eisman also stated that there is no impending housing crisis.
Bond yields are hovering near 5%
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stocks are under pressure, and
the housing market has frozen over
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Amidst the current market turmoil, Steve Eisman, noted for accurately predicting the 2008 crisis through his bet against collateralized debt obligations linked to distressed mortgages, shared his market outlook with The Wall Street Journal.
Eisman, portrayed by Steve Carell in the film “The Big Short,” is currently a managing director at Neuberger Berman. He was one of the few investors who successfully profited by anticipating the housing market bubble and its subsequent collapse.
However, Eisman dismisses concerns of an imminent housing crisis due to low home inventory, mortgage rates at 8%, and rising borrowing costs.
Instead, he has shifted his focus to the debt market, purchasing bonds for the first time in his career. His investment strategy, which he terms “revenge of the old school,” capitalizes on the government’s significant spending plans.
According to Eisman, “This is the first industrial policy in the U.S. we’ve seen in several decades. 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.”
In his view, “old economy” stocks, including those in the construction, utilities, and materials sectors, are more promising than bank stocks or hypergrowth stocks.
Eisman simplifies his approach by stating, “What does Vulcan Materials do? 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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Business Insider
