An investor who attained legendary status after nailing the 2008 housing market collapse is revealing his highest-conviction sectors as the S&P 500 soars to another fresh all-time high.
In a new CNBC interview, Steve Eisman says the market story today is the same as it was last year, despite calls from experts in March to shift portfolio allocations to energy and gold amid the geopolitical tensions in the Middle East.
“The story of the economy last year was AI spend, credit quality is fine, K-shaped economy. And the story this year is AI spend, credit quality is fine, K-shaped economy. We are literally back to where we were last year, the same exact narrative, unchanged. It’s as if nothing happened in between.”
With the macro backdrop firmly in place, Eisman says his portfolio has not changed, noting that he has no interest in the sectors many investors turn to for safety.
“I stick to what I own, mostly, which is tech, some financials. I don’t own any staples. I don’t really own anything energy. I own the same stuff that I owned in the past…
I like most of the Mag 7. And then I like some financials, not the alternatives, but the traditional banks. And on the industrial side, companies that are power-related, like GEV, Quanta… and Eaton as an example.”
Eisman also highlights that he doesn’t have a problem with the market right now, despite investor concerns about overvaluations as the S&P 500 soars to a new record high.
“I think what people don’t think about is 10 years ago, infotech was 18% to 20% of the S&P, and now it’s 35% of the S&P. Then if you add in Google, Meta, which are not technically in infotech, it’s really 50% of the S&P. So the market’s more expensive because tech has become a much bigger percentage of the S&P, and tech sells at higher multiples generally than everything else. So I don’t think the argument that the market is, per se, expensive is compelling.”
As of Thursday’s close, the S&P 500 is trading at 7,209.
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