'The Big Short' Goes Long: Men Who Predicted Housing Bubble Prefer Asian Stocks, Gold
Hayden Buckfire 1 year ago
AsiaEquitiesGlobalMarketsTrading Ideas
Book-turned-film 'The Big Short' made stars of Wall Street traders who shorted the U.S. housing market. Now, they focus on going long in Asia.
Later adapted as a film, “The Big Short,” Michael Lewis‘ seminal book about the hedge funds that shorted the U.S. housing market before its eventual crash in 2008, shot several Wall Street pros to stardom. Among them were Porter Collins, Steve Eisman, Vincent Daniel and Danny Moses, who shorted mortgage-backed debt at FrontPoint Partners.
While the four made a killing from a short position in 2008, the Big Short alums are now focused more on going long. The traders reunited this week at an alternative investments conference in Miami, according to Bloomberg.
Collins, co-founder of Seawolf Capital LLC, said on the panel that he has continued his spirit of contrarianism by investing in Asian markets, where valuations are currently cheaper. Daniel holds similar sentiments, but his rationale is the expectation that the U.S. Dollar will weaken, which would benefit foreign assets.
Michael Burry, the founder of the hedge fund Scion Capital, was also featured prominently in the book and portrayed by Christian Bale in the film. Burry has also been bullish on China for several quarters — per his latest 13f filing, Scion Capital’s largest position is Alibaba Group Holding Ltd – ADR (NYSE:BABA).
The iShares MSCI China ETF (NASDAQ:MCHI) tracks Chinese equities, which have traded cheaper than U.S. stocks for several years.
Moses is also looking at value in the market. The frequent CNBC guest likes gold, as reflected in the SPDR Gold Trust (NYSE:GLD).
Eisman, a University of Pennsylvania alum, touted homebuilder stocks given the shortage of new homes in the U.S. and anticipated easing of Federal Reserve monetary policy.
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