Billionaire Investor Dan Loeb Updates His Portfolio To Take Advantage Of The 'Awakened Animal Spirits'

As noted by CNBC, Loeb said in his letter that Trump's victory in the presidential election represents the "most important paradigm shift" since the financial crisis.

"Trump's election has accelerated the end of QE," CNBC quoted Loeb as saying. "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."

Incrementally Bullish On Financials

Loeb boosted his fund's exposure to the financial to 11.8 percent of the entire portfolio compared to just 4.4 percent on November 8.

Loeb added that half of its initial holdings were shifted away from high multiple, free cash flow businesses in payments, ratings and P&C business which traditionally outperform in periods of deflation to more traditional reflationary exposures in banks and brokers.

Loeb also even noted that he has become incrementally bullish on this trade since he first started re-positioning the portfolio after the election.