CNBC Genius Insana Says Go All In On Banks And Homebuilders

You have to own the banks.

I don’t think the world is ending…. It’s 5 billion years away when the sun flames out.

– Ron Insana on CNBC’s Mad Money, Friday July 10

Back in March 2006, longtime CNBC anchor Ron Insana decided the time was ripe to start his own hedge fund.  Having acquired first rate contacts from his years at CNBC, Insana set up a fund of funds called Legends which would invest in high profile hedge funds like Steve Cohen’s SAC Capital and James Simon’s Renaissance Technologies.  Legends would charge a 1.5% management fee and 20% of profits on top of similar fees charged by the underlying hedge funds.  

However, Insana struggled to raise capital and his fund was down 5% during the 14 months in which it was open.  In August 2008, he decided to shut down the fund (for more see “Running A Hedge Fund Is Harder Than It Looks On TV”, Andrew Ross Sorkin, The New York Times, August 19, 2008, C1).

After shutting down his fund, Insana made a big deal about how he was going to work for his best bud Steve Cohen of SAC Capital.  That didn’t seem to last long as he was back on CNBC within a year.

His latest venture is Market Movers, an investment newsletter he is writing for TheStreet.com (“Ron Insana’s Gonna Make You All Rich”, Dealbreaker, June 25).

Insana was on Mad Money on Friday, promoting his newsletter (Cramer is the Founder of TheStreet.com), and recommended making big bets on homebuilders and banks.  His argument is that the worst of the crisis happened in March and prices then represented secular, generational lows.  Cramer made a big deal about the call because he’s trying to promote Insana’s newsletter.