Activist investors are rising from the dead — thanks to President Trump.
That, at least, is according to Dan Loeb, the billionaire boss of the $15 billion hedge fund Third Point, who is hailing Trump’s pledges to take an ax to taxes and government regulations.
“This environment is undoubtedly better for active investing — just as active investing was considered to be on its deathbed,” Loeb wrote in a letter to investors Wednesday, which was first reported by Reuters.
Under Trump, Loeb expects to see a reduction in corporate and individual taxes as well as a pullback in regulation, which will stimulate investment.
Loeb also made a point to call out some of Trump’s more erratic social media behavior.
“We do not plan to trade the tweets but we expect an increasing number of real and, even better, fake dislocations to create some extremely rewarding investing opportunities,” Loeb wrote.
Almost immediately after Trump’s unexpected win in November, Third Point repositioned its portfolio to include more stocks and fewer credit investments.
The trades may have come too late. Although Third Point ended the year up 6.1 percent, it lost 1.1 percent in the fourth quarter, even as the market was rallying.
Despite his upbeat outlook, Loeb still warned about the investment climate, citing Trump’s more protectionist rhetoric.
“Our bullishness is not without some caution,” Loeb wrote. “We recognize that trade wars and/or escalating inflation could result in a policy mistake that could then result in a sharp sell-off.”
Our editors found this article on this site using Google and regenerated it for our readers.
