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(Bloomberg) -- It’s another sign, if one were needed, of the perilous state of the short-selling industry right now: At an event featuring some of the most famous names in the game, there was hardly a bearish view among them.
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Porter Collins, Steve Eisman, Vincent Daniel and Danny Moses shot to fame thanks to The Big Short, the book and movie chronicling successful trades they and others made in the financial crisis. The foursome made a killing at FrontPoint Partners betting against mortgage-backed debt before the crash.
This week, reuniting for a panel at an alternative investments conference in Miami, they made it clear they still like to go against consensus — only these days that mostly involves being long what other investors in the market avoid.
“What all of us have done during our career is try to be contrarians,” Collins, co-founder of Seawolf Capital LLC, said on the panel. As well as looking at what’s priced to perfection and what could go wrong, that also means asking “where are cheap assets, what can go right, and how do we make money off that?” he said.
Collins said he currently sees value in emerging markets — like Asian stocks, which are cheap thanks to their unpopularity. His Seawolf co-founder Daniel agrees but for different reasons; he expects the dollar to weaken, and says that will benefit developing-nation assets.
Moses, who also co-founded Seawolf before starting Moses Ventures, favors value names. In a nod to his bearish track record, he’s also long gold to protect from all manner of dangers.
Meanwhile Eisman touted homebuilder stocks, based on a conviction the Federal Reserve is on course to ease monetary policy later this year, and that the new White House will support the sector. Eisman, who was placed on leave from his role as a senior portfolio manager at Neuberger Berman following social media remarks relating to Gaza, was listed in the conference agenda as “Businessman” and “Investor.”
Industry Woes
The lack of bearish conviction at an event dubbed “The Big Short Panel” by organizers chimes with the broader malaise infecting the business of betting against securities in expectation they will drop. The short-selling universe has been rapidly shrinking in the face of the relentless US bull market, lingering regulatory threats and the rise of unpredictable retail traders.