Fear of a stock market crash is a common occurrence as the aging bull market rages on. There will always be naysayers and skeptics who attempt to capitalize on the next market downturn, but very few are successful. Steve Eisman, a portfolio manager for Neuberger Berman, doesn’t think a crash will be coming anytime soon.
Steve Eisman may not be a common household name. However, many will recognize him as the character Mark Baum portrayed by film star Steve Carell in “The Big Short.” He was also a key character in Michael Lewis’ book, which the movie was based on.
Although he is known for shorting the market, Eisman’s opinion has turned bullish on the financial sector. He said the “industry is so well-capitalized today that I don’t see any problems emerging for a very long time … I sleep very well. I just don’t see any systemic risk on the horizon” during an interview with CNBC on Friday.
He also added the financial sector has a “clean” balance sheet and is under heavier regulations. It was a lack of regulation and a heavily leveraged balance sheet that allowed the investor to achieve massive returns a decade ago.
Eisman is one of a small group of investors who capitalized on the financial crisis of 2008 by shorting subprime mortgage securities. He was working for a division of Morgan Stanley (NYSE: MS) known as Frontpoint Partners LLC, and was managing over $1 billion for the fund by 2010. He left the firm the following year due to allegations a co-manager of his was trading insider information.
Specifically, the expert has pointed out Citigroup, Inc. (NYSE: C) as a bank he is particularly confident in. He believes this bank has one of the best executive teams, and more potential upside when compared to other banks. Last year, Eisman announced on CNBC he was investing in “a whole bunch of banks and investment banks.”
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Article By: Frank Marino-Moore
