Dan Niles Saw The Banking Collapse Coming, Predicted Big Firm Would Get 'Nailed': Now He's Placing Bets On Tech

Zinger Key Points
  • Dan Niles was short a basket of 50 financial names ahead of the SIVB collapse.
  • "It just happened a lot quicker than we anticipated," Niles says.

Satori Fund founder and portfolio manager Dan Niles shorted several banks ahead of the collapse. Now he's looking to squeeze profits out of a pair of tech names.

What To Know: Among several other names, Satori was short SVB Financial Group SIVB before a bank run sparked a liquidity crisis that ultimately led to its downfall. 

"We were fortunate in that we had a basket of about 50 financial shorts on before that went under. It was in the basket ... we were expecting an issue in terms of a big firm getting nailed," Niles said Thursday morning on CNBC's "Squawk Box."

About a month ago, Niles appeared on CNBC and touched on problems in the financial system, noting that he was worried about a "systematic risk" that could cause a Lehman Brothers-like moment. 

"It just happened a lot quicker than we anticipated. We were thinking more in the back half of the year," he said. 

Niles warned that he doesn't think the banking system is in the clear yet. He indicated the FDIC needs to expand insurance or things could get "a whole lot worse." However, he expects the FDIC to do just that. 

See Also: US Officials Reportedly Looking At Ways To Expand FDIC Cover To All Deposits — Elon Musk Says 'Absolutely Required'

Niles believes that earnings will be what really puts downward pressure on the markets next, but he's still maintaining a mixture of longs and shorts. 

Meta Platforms Inc META is one of the names he's currently long, he said, highlighting its strong combination of offensive and defensive characteristics.

"They're doing very well with their TikTok competitive product. They've laid off 24% of their workforce around the process of that over three separate cuts and it's got just above a market multiple right now," Niles said.

Another name is DraftKings Inc DKNG, although he acknowledged that the sports-betting play is a riskier move. He suggested adding some short positions to help balance out the riskier position.

Niles didn't go into specifics on his shorts, but he noted advertising technology names often get hit in recessions. 

"Anything related to enterprise spending that has a high financials exposure — so there's names in the networking space, some of the giants there as well — you gotta be careful," he said. 

Related Link: Top 5 Tech Stocks You'll Regret Missing This Quarter

Photo: iQoncept via Shutterstock

Market News and Data brought to you by Benzinga APIs
Posted In: Long IdeasNewsTechTrading Ideasbank collapseCNBCDan NilesFDICLehman BrothersSatori fundSilicon Valley Bank
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!