Investor Steve Eisman, who took short positions against the housing market leading up to the 2008 crisis, is sounding the alarm over an event that could trigger a collapse in the stock market.
In a new video on his own YouTube channel, Eisman says that he continues to be long-term bullish on the US stock market, noting that the US economy is in the best position to witness growth and innovation in decades.
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But Eisman cautions that escalating geopolitical tensions could obliterate the US economy’s growth potential, sparking a big stock market sell-off.
“We’ve been in a bull market pretty much for the last 10 years with some fits and starts. And so buy the dip has become almost a religion. It’s a religion that right now I largely subscribe to because I am of the view… that the US economy is more dynamic than it’s ever been in my lifetime. So long term, I am very bullish.
However, the one thing that I worry about is the potential trade war. And here, it’s in no one’s interest for there to be a trade war. But just like in World War I, it was in no one’s interest for there to be a World War I. But because of the reciprocal treaties that countries had, they fell into it.
I think it’s still possible that there’s a trade war. I don’t know how to handicap it. That is really the only risk in the market.
As long as there’s no trade war, I’d buy every single dip. If there is a trade war, however, you would see a very big correction.”
As of Friday’s close, the S&P 500 is trading at a new all-time high of 6,173 points.
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