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Mike Novogratz likes Brazil; Jeff Gundlach hates housing

Michael Novogratz
Adam Jeffery | CNBC
Michael Novogratz

Brazil is now "so bad it's good," Mike Novogratz, a principal of publicly traded investment firm Fortress Investment Group, said Monday at the Sohn Investment Conference in New York.

Novogratz, a macroeconomic hedge fund manager, said that investor pessimism on Brazil is "at an all-time high" and that "it's been a very difficult place to make money."

But that common view is making assets relatively cheap. According to Novogratz, the country's economy is likely to recover if President Dilma Rousseff loses her re-election bid this year to one of two other more economically conservative candidates.

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"The bet is simple. Between now and the election, the probability of Dilma winning is going to go a lot lower than it is today. I actually think she loses the election," Novogratz said. "You'll see a major rally in Brazilian assets."

He specifically recommended buying local equities, currency and long term bonds.

Gundlach sour on housing

Investors can forget the U.S. housing rebound, according to bond manager Jeff Gundlach.

The head of mutual fund company DoubleLine Capital said that single-family housing is "over-believed and overrated."

Gundlach noted that the supposed next generation of first time home buyers are troubled financially and are less likely to enter the market than currently predicted.

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"The kids aren't alright," Gundlach quipped.

He also said borrowing costs are increasing and that there's still plenty of supply, especially from rentals and previously foreclosed homes. Interest rates will rise even more if Fannie Mae and Freddie Mac are wound down by the government.

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"The homeownership rate is going to decline. A lot of people think it's going to rebound. I believe this is going to go to new lows, not rebound back to where it used to be," Gundlach said.

His recommendation to play the thesis was simple: Short the SPDR Homebuilders exchange-traded fund.

Laffont: Go long Liberty Global

Internet company Liberty Global is perfectly positioned to benefit from growing European demand for broadband access, according to Philippe Laffont of hedge fund firm Coatue Management.

He said that cable access has been slow to spread in Europe but demand is set to increase sharply as the desire for broadband Internet speed grows, especially for online video services like Netflix.

He said Liberty Global stock represented "growth at a reasonable price" and could rise to more than $100 a share, up from about $42 as of Monday afternoon.

"We think that by 2018 Liberty will be able to buy back 75 percent of its stock at current prices. So either the stock price will go up or you will earn four times as much free cash flow per share as you do today," Laffont said. "That is unsustainable in my mind, which will lead to great returns and why we love this stock over five years."

Laffont also said that Liberty Global could be bought by Vodafone, AT&T or Comcast (CNBC's parent company) as the companies seek to expand their presence in Europe. The company itself acquired Virgin Media in 2013.

Coatue's flagship technology-focused hedge fund is down nearly 10 percent this year net of fees through April, according to a person familiar with the performance. A spokesman for the firm declined to comment.

The Sohn Conference is investment idea event that raises money for pediatric cancer related causes.

Robbins: 'Sunny Days' for HMOs

Hedge fund manager Larry Robbins says health maintenance organizations, or HMOS, are poised to benefit from growing demand for their services.

The founder of $7.5 billion Glenview Capital Management recommended investors go long Humana and WellPoint to fit that thesis.

"Despite the fact that HMOs have weathered the storms and have a brighter outlook, they are the only sector within healthcare that hasn't recovered," Robbins said.

"The pain is in the rear-view mirror and sunny days are out the front windshield," he said, noting government-imposed profit margin limits, interest rates and other past challenges.

He said the companies have more demand from Medicaid recipients that will benefit as the economy recovers and interest rates normalize.

"There's an alarming outbreak of old people in the United States," Robbins joked. "There's 3 percent more bad grandpas running around in an environment where there's only 70 basis points of population growth. So where would you rather invest where there's more volume growth?"

Separately, Robbins recommended investing in food science company Monsanto.

He said his firm had a $1 billion bet on the company, largely because Robbins believes growing global demand for food will be met with genetically modified organisms or GMOs, not organic farming.

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