Bonus Episode : Steven Eisman: After The Big Short – On Lessons for the Next Crisis, Emotion in Investing, Peacocks and Feather Dusters

We are delighted to bring you this lively bonus episode of a live conversation with the legendary Steven Eisman, who became famous for shorting Collateralized Debt Obligations in the run up to the 2008 financial crisis. He was featured in the film adaptation of The Big Short under the name of Mark Baum, and portrayed by Steve Carell. In September 2014, he joined Neuberger Berman in the Private Asset Management division. The group, run by partners including his parents, Elliott and Lillian Eisman, manages portfolios of stocks for wealthy clients.

If history does not repeat, but instead rhymes, I was intrigued to hear what lessons were learned in the run up to the crisis of 2008 that might be applied today. Steven and I discuss his roots and early familiarity with risk taking that grew from having two parents in the brokerage business. We explore the backdrop to the crisis of 2008 and the frailties of the financial business models as well as the, sometimes blind, faith that management had in them. His response to the abusive and risky practices of some of the lenders and financial architects was, admittedly, an emotional one – and we have a short diversion into the presence of emotion in almost all investment decisions.

Moving to today, we look at the opportunity in infrastructure investing and some of the humility that market forces have a tendency to cause. “Peacock Today, Feather Duster Tomorrow” was a famous phrase of Steven’s father and we discuss it as an essential “check” on the dangers of hubris and over-confidence.

Warm, amusing, self-deprecating and brilliant original thinker – please enjoy my conversation with Steven Eisman.