Firms tied to industrial reshoring will be winners in the emerging market paradigm, says famous portfolio manager

by Bernard Tourillon

This opinion-piece is adapted from an original story published by Bloomberg.

Steve Eisman is a portfolio manager who famously shorted subprime mortgages ahead of the global financial crisis. The story was subsequently adapted into a Hollywood movie “The Big Short.”

According to Mr. Eisman a new global investment paradigm is emerging that could further accelerate the renewable energy revolution.

As a higher-interest era is ushered in by the Federal Reserve, Eisman expects new market leaders to replace many of the big names that have dominated the investment landscape over the past decade. In particular, he points to firms tied to “the reshoring of the industrial world back to the United States” and “greenification” as likely winners.


Steve Eisman, managing director of Neuberger Berman Group LLC, listens during a Bloomberg Television interview in New York, U.S. (Credit: Bloomberg)

“Paradigms change over time,” said Eisman on the latest episode of the Odd Lots podcast. “Sometimes those paradigms change violently, and sometimes those paradigms change over time because people don’t give up their paradigms easily. And I think we’re going through a period possibly like that again.”

Previous paradigm shifts included the transition from massive conglomerates like General Electric Co. in the 1990s to tech and finance stocks of the dotcom bubble in the 2000s.

A prolonged period of low interest throughout the 2010s then shifted markets towards high-growth equities like Amazon, which remain at the top today.

The pace at which this new paradigm emerges in the next few years will largely depend on the Federal Reserve. Suppose rates stay at their current level or continue to rise, as Reserve Chair Jerome Powell has indicated in the wake of a strong jobs report. In that case, green firms tied to industrial reshoring are set to benefit massively.

“If [Powell] leaves [interest rates where they are], I think we’ll have a paradigm shift. If he cuts [them] again, we’ll go back to [where] we were, which [was] growth stocks. [But] I think he’s gonna leave them there, and then we’ll have a paradigm shift,” said Eisman.

Powell has recently made remarks that seem to confirm Eisman’s suspicions. “Inflation has moderated but remains too high [— we] still think there’s work to be done there.” “We haven’t made a decision on exactly where rates will peak.”

In response to fears of a major economic downturn caused by rate hikes, Eisman pointed to US banks’ improved fundamentals.

“Something bad could happen, you know, we could have a recession. But my feeling is we’ll have an old-fashioned run-of-the-mill recession. We’re not going to have some enormous meltdown crisis where the system is completely at risk, which is what happened in ’08.”

Evolving macroeconomic winds in the United States may cause temporary market turbulence as a new paradigm looks set to take root. Still, they offer an immeasurable opportunity for clean technologies, which will benefit from declining interest in high-growth stocks due to excessively low borrowing rates.

If the Federal Reserve continues on its path of contractionary monetary policy, North America’s cleantech firms will play a more significant part in the investment landscape — and may even bear the opportunity to reshore lucrative industries back to ESG-friendly markets.

Undoubtedly, then, this is good news for the sector.

At HPQ Silicon, we are actively driving the reshoring movement by leveraging our expertise and cutting-edge innovations in the clean technology sector. Our commitment to sustainability and providing environmentally friendly solutions aligns perfectly with the increasing demand for domestic manufacturing and green initiatives.

I am incredibly proud of the milestones we have achieved in the past few months. These accomplishments represent significant progress toward our vision of reshaping the manufacturing industry in North America.

They are a testament to the hard work and dedication of our exceptional team.

Over the last 35 years, Mr. Tourillon has held senior-level executive positions with extensive finance, accounting, marketing, administration, and business development experiences in diverse industries including banking, manufacturing, exploration, mining, and technologies companies. Since joining HPQ Silicon in 2006, he has participated in fundraising activities and financial transactions worth over $49 million.