Dan Loeb is Aboard the Trump Trade, Says Pro-Business Administration is ‘Paradigm Shift’

Last year, Dan Loeb said the hedge fund industry had entered the ‘killing fields’ and were primed for culling — after many made wrong directional bets. This year, after seeing the Trump trade work its magic, his tune has changed dramatically.

Source: Bloomberg

“I’m not sure that — given the increase in S&P earnings that we expect due to changes in policy as well as tax reform — that it’s as overvalued as people think,” Loeb said Friday in a conference call discussing results at Third Point Reinsurance Ltd., the Bermuda-based company where he oversees investments. “We’re seeing plenty of good valuation situations.”

“The complexity is obscuring the earnings power of the company or companies that are going through a financial or operational restructuring,” he said. “We’re not really fazed by that.”

“What gives me confidence about the future is I just think we’ve had a paradigm shift with the new administration in terms of having a backdrop that is supportive of business and pro-growth,” he said. “There will also be an increase — we’re already seeing it — in corporate activity, which is something where we typically thrive.”

Listen to the full TPRE call here.

In his latest investment letter, Loeb said the Presidential election was the ‘most important paradigm shift since the financial crisis.’

“Starting the morning after the election, we took immediate steps to reorganize the portfolio around investments that we believe will benefit from Trump’s stated policy objectives.”

“In the immediate term, we believe we will see an acceleration of economic growth at home. Electing a President who is seen as pro?business (ignoring his protectionist views on global trade) has awakened animal spirits,”

“Trump’s election has accelerated the end of QE. The baton is now passing from the Fed to the Treasury, which will provide fiscal stimulus via comprehensive tax reform and infrastructure spending. We expect a significant reduction of corporate and individual taxes, the elimination of the interest rate deduction, and the removal of the deductibility of state and local income taxes from federal returns. To stimulate investment, we see an immediate deduction for capital spending and a dramatic pullback in government bureaucracy, red tape, and regulation.”

He sounds like a fan.

Third Point’s top holdings, as of the end of 2016, were BAX, DOW, HUM and STZ.

For the first time in 36 years, a President of the United States will not be attending the establishment orgy of vanity — dubbed the correspondent’s dinner.

Reagan didn’t attend in 1981 because he was recovering from an assassination attempt. Trump won’t attend because the media and the Washington establishment want him dead.

The correspondents’ dinner is an absurd gathering of cucked celebrities and media personalities, an event that, essentially, ingratiates them with the presence of the President — offering pseudo validation for their worth and importance. It is a feast of leftarded atrocities, topped off with a roast of the President.

Trump offers no quarter, only the black flag.

I will not be attending the White House Correspondents' Association Dinner this year. Please wish everyone well and have a great evening!

— Donald J. Trump (@realDonaldTrump) February 25, 2017

Those sacks of shit can stay home and roast themselves. The President has work to do.

Both Obama and Bush couldn’t give two shits about the stock market. Bush was focused on colonizing the middle east and Obama was fixated on having mentally ill transgenders urinate in the ladies restroom — standing up.

But now we have a shit-poster in chief, very vain and ideally focused on how the public perceives him. Being a man of business, he’s singularly interested in what the media has to say about him, and more importantly, the stock market.

He tweeted this out this morning.

Great optimism for future of U.S. business, AND JOBS, with the DOW having an 11th straight record close. Big tax & regulation cuts coming!

— Donald J. Trump (@realDonaldTrump) February 25, 2017

Just last week, in a CNBC interview, Sec. Mnuchin said ‘we’re in a mark to market business’ and the bullish tone and tenor of the stock market was a reflection of the administration’s progress.

“There’s a lot of confidence in the Trump administration and in the desire to invest in the U.S.,” he told CNBC in an exclusive interview Thursday. “This is a very competitive place to do business. We’ve got great companies, and you see that reflected in the markets.”

Bullish or bearish on the stock market, these are significant developments in the market narrative — evidence of the Trump administration’s intent to bid this market up throughout his term.

It has never been harder to be a bear.

Gents and Ladies,

I cordially invite you all to attend a 5 day workshop, hosted by the hardest working trader in the business — The Option Addict.

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Monday: 2017 Review – What My Past Boot Camp’s Predicted and What’s Next to Come
Tuesday: Downside Risks to 2017 – The “What If’s” and How to Properly Predict a Correction
Wednesday: Out With the Old, In With the New: 2017 Market Rotations
Thursday: A Historical Look at Market Sentiment Shifts
Friday: The Very Best Longs and Shorts for 2017

See you there.

I’ve gone through a long journey in my life long goal, barreling towards alcoholism. Truth be told, no matter how hard I try, I just can’t become an alcoholic. I don’t have it in me. Starting off as a wee lad, around the age of 14, my friends and I drank plenty of malted liquor. We used to buy a 40 ounce after school, like true degenerates, and imbibe the nectars of the ghetto until half retarded. Disgustingly, we used to share the bottle.

Then I moved onto other things, like Cisco, which we called ‘liquid crack’ in Brooklyn. It was a sweet wine with lots of sulfites in it that used to make everyone really sick.

Then I experimented with mixing things into my beer, like pina colada coolers or even fruit punch — real fag shit.

Moving into adulthood, I still drank beer, but also tequila. From 20-22, I drank bottles of that stuff — earning a reputation as someone who could truly hold his liquor. When you’re young and stupid, meaningless titles like that are appealing and coveted.

Then I went through a dry period, becoming turned off by the whole beer scene and definitely soured on the Mexican cacti genre.

In my 30s, I experimented with single malt scotch and wine — because I had a lot of money and I thought that’s what I was supposed to drink. Again. I’ve demonstrated a keen propensity for high level retard thinking over the years.

Fast forward to today, I’ve become an aficionado. I’ve become very particular about everything, from the shoes on my feet, to coffee, tea and now cocktails.

The way I figure, craft beer is a genre that is for fags, 100%. I don’t mean that in the homosexual opera way either. It’s just that, beer, for lack of a better term, is for rubes — rusticate swindlers who enjoy vomiting on their own shoes and their wives.

I’ve found that FDR had it right all along: martinis.

Now, we can go straight vodka, dry vermouth, shaken, not stirred, and have a great evening of laughter — uninterrupted by beer burps. Or, we can mix up a french martini for the ladies, which is a fruitier beverage, topped off with champagne (when done correctly, the champagne must be frapped). Or, we can go the FDR route and simply add a little olive brine to the martini, which I make extra wet with 1/2 parts of vermouth in it, and there isn’t a drink in the world that is better.

As you age and meet new people, you should carry yourselves with a modicum of sophistication — eschewing plebian beverages like crafted beer or shots of Jagermeister. That shit is for retards.

If you want to discuss martinis and the different variants, we can do that too. Personally, I prefer grey goose vodka over gin, but gin works too.

What’s your poison? Say ‘craft beer’ and I find out where you live and punch your jaw loose.

Exodus is flagging a bunch of oil stocks oversold now, most of which have track records sporting a 80%+ win rate. The overall oil and gas sector is getting punched in the scrotum today, off by more than 3%. Here is what our oscillator looks like now.

look at that shit

My go to picks into this commodity meltdown are $TECK and $CLR. The nuclear sector is bouncing today, so no panic there. Overall, the market looks just fine. We’re simply digesting recent gains and preparing the groundworks for another leg up.

Inside Exodus (join you misers), here are the oversold stocks flagging right now.

Finally, fascism! I’ve been waiting to enjoy some of the ancillary benefits of the so called fascism that the left have been screaming about. Thus far, I’ve seen zero, and I mean zero, right wing kill squads. And I’ve seen the press do nothing but lie and pervert the truth.

God willing, this is all about to change now.

Earlier this morning, the following fake news agencies were banned from the press conference.

BREAKING: White House blocks CNN, New York Times, Los Angeles Times, Politico, and BuzzFeed from press briefing

— BNO News (@BNONews) February 24, 2017

The leftards at Time and the AP, in solidarity with their afflicted comrades, opted to boycott the presser too.

Later on Trump discussed FAKE NEWS and how horrible they are, doing a disservice to the American people. SAD!

Trump slams the press at #CPAC: "They say that we can't criticize their dishonest coverage because of the First Amendment." pic.twitter.com/NFhcrq47g9

— Washington Examiner (@dcexaminer) February 24, 2017

No sign of the right wing goon squads just yet.

I was actually in a $JCP the other day, perusing around. It was absolutely dreadful. I don’t know how these stores stay open.

The company released earnings this morning and announced they were going to close 14% of their stores, or about 140 and do so immediately. They’re retiring 6,000 workers and will save $225m in cost savings.

Recently, Macy’s announced similar plans, store closures, as well as Sears and Kohls. Which begs the question: what will the shopping mall look like in ten years?

Anyone ever notice how much square footage these mega stores take up? How on earth can these mall operators stay in business when the mega stores go?

I suppose it’s like investing half of your portfolio in one stock. If that stock was Amazon, you’d be considered a genius. But for the mall operators, the REITs like $SPG, $GGP, $CBL, $PEI and $WCG, their investments were literally $M, $SHLD and $JCP.

Thus far, analysts don’t think it’s an issue.

Source: Morgan Stanley

Of the 269 malls owned by REITs with Sears, 79% have < $500 sales/square foot (ssf)… Our analysis shows significant overlap between Macy’s and Sears with 45% of REIT malls having both as a tenant. We do not envision a material impact to earnings, and some REITs could also be opportunistic, but it could lead to continued pressure on multiples as SS-NOI (same-store net operating income) decelerates.

Sounds a bit delusional to me. The trend isn’t grim for just the big box stores, but just about every single store in these malls — restaurants included.

I remember like it was yesterday, pre financial crisis, when retail was the darling of Wall Street — the single most important place to invest.

Now it’s in ruins.

I’m almost without words after reading Trump’s latest tweets. Like him or not, the leaks to the media have to stop. It’s both a national disgrace and risk. The NY Times should not be receiving sensitive information as soon as it leaves Trump’s desk.

But I guess we live in a country that glorifies snitches.

Trump calls them out. This is going to make a lot of people pissed off at the FBI.

The FBI is totally unable to stop the national security "leakers" that have permeated our government for a long time. They can't even……

— Donald J. Trump (@realDonaldTrump) February 24, 2017

find the leakers within the FBI itself. Classified information is being given to media that could have a devastating effect on U.S. FIND NOW

— Donald J. Trump (@realDonaldTrump) February 24, 2017

I think we have a situation like we’ve never seen before. The ‘permanent establishment’ in the FBI and CIA are both actively working to undermine the President. How is that not treason?

It looks like the rally has ended, at least for a while. Bonds are back in vogue, with the German 2yr at record lows — approaching -1%. Gold is, once again, a safe haven. It’s up 0.5% in the pre market.

Over in Europe, stocks are being bludgeoned, led lower by actual Nazis — off by 1.75%.

The sell off is broad based, maybe hitting the banks a little more than commodities.

Crude is off by 0.8%; but base metals are higher.

US futures are down around 90 for the Dow and 25 for the Nasdaq.

Happy Friday.