Big Short boss Steve Eisman gets caught out by coronavirus crisis as his fund drops almost 5%
He was hailed as a prophet who predicted the financial crisis. But the investor made famous by the Hollywood film The Big Short has admitted he underestimated the impact of the coronavirus crisis.
Steve Eisman, whose character Mark Baum in the Oscar-winning film was played by Steve Carell, told investors last week that the Neuberger Berman Absolute Alpha Fund had dropped nearly 5 per cent in March as the Covid-19 crisis took hold.
‘While our portfolio outperformed major indices dramatically, we did not anticipate the severity of the pandemic quickly enough – hence, the negative performance,’ Eisman said.
Steve Eisman said his Neuberger Berman Absolute Alpha Fund dropped nearly 5% in March
He said the fund ramped up short positions – bets against share prices – in an effort to profit from the market collapse.
One of its most lucrative bets was a short position in London-listed bank Standard Chartered.
Eisman predicts a U-shaped economic recovery. He suggested a nervous public would be slow to return to restaurants, cinemas, gigs and flying and said consumer-driven areas of the economy faced a recovery that would be slow.