Steve Eisman of The Big Short said investors should ignore the US-Iran war because it could have a long-term positive impact on markets.
In fact, when the investor was asked by CNBC’s Joe Kernen on Monday’s “Squawk Box” if he would make any changes because of the conflict, he replied, “Not a single trade.”
“I think this is very, very positive in the long run,” Eisman said. “People are reacting to what’s happening, oil prices have obviously gone up. But if things go well, in two months prices will be back to where they were.”
The stock market was thrown into turmoil on Monday after the United States attacked Iran in a joint attack with Israel over the weekend, killing the country’s supreme leader, Ayatollah Ali Khamenei, an attack that sparked retaliatory attacks from Tehran.
Historically, geopolitical conflicts have had little lasting impact on stocks. According to data going back to 1980, the S&P 500 is on average flat the day after such an event, according to Barclays’ trading department. Studies show that populations typically recover within a month of the start of a conflict.
But sharply higher oil prices and the possibility of the war spreading across the region could keep the stock market under pressure for longer this time. Stocks were already near record highs ahead of the crash, but the pace of the bull market had begun to slow amid concerns about the broader impact of artificial intelligence on the economy.
“The Real Eisman Playbook” podcast host and former Neuberger Berman money manager expressed his own views on the conflict and said he supports President Donald Trump’s actions against a regime he described as a “death cult.”
However, he also acknowledged that the war could last longer than expected.
“This will take some time,” he said.
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