Taps Coogan – July 20th, 2023

A few months ago, we shared this interview with Steve Eisman, fund manager at Neuberger Berman and investing legend from the Subprime Crisis and 2008 Recession. In that interview from April, he more-or-less correctly advocated a ‘wait-and-see’ approach to recession fears this year, at a time when the market narrative was more bearish. Fast forward to today, and Eisman is still arguing that the market rally can continue even if it is getting a bit ‘manic.’

Steve Eisman:

“I think everybody, including me, has underestimated how much institutional investors were underinvested at the beginning of the year… As one of my partners likes to say, this is the most anticipated recession that so far has never happened and so people are chasing. It’s starting to feel a little manic but it could go on quite a bit longer because as long as the economic data is okay, I don’t see why people are going to sell their stocks.”

“I’m surprised by how much the market has gone up this year, I really am… At this point I am agnostic about (the economy). The data is still very very strong. The Fed keeps raising rates. It still hasn’t had an impact. Until it has an impact, I’ll just say we’ll keep chugging along…”

“(Speaking of his portfolio) It’s a combination of some tech, very little financials, a lot of it focusing on infrastructure because the amount of money the government is pouring into it is almost unimaginable and it’s going to last for at least ten years…”

“I don’t think (banks) are interesting and I don’t think they are important. People own J.P. Morgan because they are hiding in it and it is by far the best bank. The regionals are problematic… I don’t think earnings have bottomed… The problem is that Michael Barr, who is Vice Chair of Financial Supervision, just said that he is going to raise capital requirements for the large banks by 20%…”

Sounds about right. There is more to the interview so enjoy it above.