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Famed 'Big Short' investor Steve Eisman explains why he's betting big on major US banks (TREX, KBE)

Steve Eisman
  • Steve Eisman, senior portfolio manager at Neuberger Berman, sees opportunity in the large bank stocks following the coronavirus pandemic and associated market sell-off.
  • "I actually think long-term, the best cyclical play out there are the very large banks," Eisman said on CNBC's Fast Money.
  • Eisman, who was played by Steve Carell in "The Big Short" movie about the financial crisis, also revealed a new short position.
  • Visit Business Insider's homepage for more stories.

Famed investor Steve Eisman, a senior portfolio manager at Neuberger Berman who profited off of the 2008 housing crisis by shorting subprime mortgage loans, now sees opportunity in large US banks.
In an appearance on CNBC's Fast Money on Thursday evening, Eisman said, "I actually think long-term, the best cyclical play out there are the very large banks."
Eisman said that because of the regulations placed on banks after the 2008 crisis, they are now well capitalized to weather the coronavirus pandemic and "are fine." Eisman didn't specify which bank stocks he owned.
Year-to-date, US bank stocks as measured by the SPDR S&P Bank ETF, ticker KBE, are down 42%.
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Eisman didn't have the same feeling for European and Canadian banks, and even said "some" might make good short positions. "The Canadian banks, I think, have not had a credit cycle in literally 30 years. They are not prepared for it and they're going to have real problems," Eisman said.
Separate from his take on Banks, Eisman also revealed that he was short Trex, a company that makes home decking products. "A not-insignificant percentage of their customers buy their products by taking out loans. I think it's going to be much harder for those customers to take out any loans to buy something that costs $15,000 to $20,000," Eisman said.
Shares of Trex were down nearly 3% in Friday morning trading.
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