Steve Eisman At Oxford Union

Steve Eisman At Oxford Union

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Steve Eisman | Wall Street Debate | Opposition (4/8)Play Quizzes 4

Published on Apr 3, 2018

Is First Gen An Overlooked Power Play That Deserves A Re-Rating?

environmental 1651092002The post was originally published here. Highlights: Resolving gas supply issues ensures longevity A pioneer in renewable energy should be future proof Undemanding valuation could lead to re-rating Q1 2022 hedge fund letters, conferences and more

Now the reason why they made more money every single year was that the firms made more money every single year but their firms made more money every single year because the leverage of the firms was going up every single year. And really what was happening was they mistook leveraged for genius. And the problem that emerged was that if you had gone to any of the executives of these firms and I did and said to them listen the entire paradigm of your career is wrong. The response would have been Listen kid I made 50 million dollars last year. What did you make. It's very hard to tell someone who thinks he's God that he's wrong. Subprime mortgages you know people today not even remember really what a subprime mortgage was all about. It was a mortgage that had a two or three year teaser rate and there was Reise price upward for the next 27 or 28 years. And most mortgages originated between 2002 and August of 2007 had a teaser rate of 3 percent and a go to rate of 9 percent 3 percent 9 percent. The industry and Wall Street underwrote the loans to the teaser rate which is a fancy term that means that the underwriters knew that the consumer could only afford to pay the 3 percent for the 2 to 3 years he or she could not afford to pay the 9 percent. Now why would anyone write a loan a 30 year loan where the customer can only afford to pay the teaser rate for the first two to three years. And here's the second great lesson of the financial crisis. Incentives trump ethics. Almost every time. The reason why this happened was that the the consumer would take out a loan and would pay three to four points upfront for the privilege of getting the loan.

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Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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