Steve Eastman saw the crisis in the US housing market before most people. He now believes that a wave of interest rate hikes by the Federal Reserve could dampen appetite for stocks and lead to lower prices, especially for growth-oriented stocks.
“I think the days when you beat the market by simply investing in technology are over, and we’re moving towards a new paradigm,” says Eismann, who is currently a senior portfolio manager at Neuberger Berman, to CNBC Monday.
– The model that’s been around for the last 10 years is that interest rates were zero, and people were paid to take risks. So they invested in technology stocks and hyper-growth stocks, which means high earnings growth, no dividends — and they didn’t care about valuation. He continues: I think the days of investing in companies that have no profits and have multiples of 200 times are over.
Be selective
Interest rates on short-term US government bonds have risen to their highest levels since the financial crisis, and interest rates on short-term US government bonds have exceeded 5% for the first time since 2007.
– I’m not saying you should stop buying technology. I think you have to be selective when you talk about companies that have significant earnings growth and negative earnings, Eiseman continues to tell the channel.
The director claims to CNBC that the US economy is facing a recession, but won’t say anything about how deep it will be.
Eiseman previously ran a hedge fund at Front Point Partners, shorting “subprime” US mortgages before the 2008 financial crisis, as described by Michael Lewis in “The Big Short” — the book that laid the foundation for his subsequent Academy Award nomination. Movie of the same name.
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