Steve Eisman, of “The Big Short” fame, said investors should ignore a war between the US and Iran as it could be positive for the market in the long term.
In fact, the investor was asked by CNBC’s Joe Kernen on CNBC’s “Squawk Box” Monday if he would change anything because of the dispute, and he said, “I would never trade.”
“Long term, I think this is a very, very positive thing,” Eisman said. “People are reacting to what’s going on, and obviously oil prices are going up. But hopefully in a couple of months, prices will go back to where they were.”
Stock markets were thrown into turmoil on Monday after the United States attacked Iran in a joint attack with Israel over the weekend that killed the country’s supreme leader Ayatollah Khamenei, an assault that sparked Tehran’s retaliatory strikes.
Historically, geopolitical conflicts rarely have a lasting impact on stock prices. According to Barclays’ trading desk, data dating back to 1980 shows that the S&P 500 index was, on average, unchanged the day after such an event. Research shows that stock prices tend to recover within a month after a dispute begins.
But a sharp rise in oil prices and the possibility of war spreading across the region could put pressure on stock markets for a longer period of time this time. Stocks were already near record highs before the crash, but concerns about the overall impact of artificial intelligence on the economy had begun to slow the bull market.
Expressing his views on the conflict, the host of the podcast “The Real Iceman Playbook” and a former Neuberger Berman money manager said he supports President Donald Trump’s actions against the regime he called a “death cult.”
But he also acknowledged that the war could last longer than expected.
“This takes time,” he said.
