Highlights day 3: FX Concepts' Taylor calls 11 "difficult year"

New York Wed Dec 7, 2011 5:26pm EST

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New York (Reuters) - John Taylor, founder of hedge fund FX Concepts, said he might be the "darling" of the media because of his prescient doom-and-gloom views on global economic growth, but that hasn't prevented him from suffering big losses.

"One of my funds is down 17-18 percent," said Taylor. "It's been a difficult year. I've been trading the market poorly."

Yet Shawn Kravetz, president of hedge fund Esplanade Capital, said he has never been so excited about the stock market, noting he has been buying stocks over the past nine months.

"The sell-offs have created tremendous opportunity," he said.

Those are some of the highlights from the last day of the Reuters 2012 Investment Outlook Summit. A diverse group of money managers and investment advisers shared thoughts on topics ranging from the debt crisis in Europe to income stagnation in the United States to ideas on where to invest in the coming year.

Here are some of their thoughts:

John Taylor, CEO of currency hedge fund FX CONCEPTS

Taylor, who manages $4.3 billion, said his analysis of the macro economy has been exactly the same as Ray Dalio, who runs the $100 billion-plus Bridgewater Associates. But while Bridgewater's hedge funds are reportedly up double-digits this year, Taylor's returns have been very different.

"I think the same way as Ray Dalio and I ask, 'Why the 'blank' did we not make a lot of money?" Taylor said. "We had the same analysis and we think the same way."

Taylor said his theses on the United States and Europe have been mostly right but his timing on his investment strategy has been off He reiterated that he expects the euro will hit parity with the dollar. "I don't think the euro can survive in its present form. It has a continually bilateral current account trade crisis."

On the bright side, Taylor said his funds are making money on fixed-income exposure, but added, "We aren't known as a fixed-income manager."

Shawn Kravetz, founder of Esplanade Capital

Kravetz, whose fund takes both long and short positions in retail and consumer stocks, said investors have been given "an early Christmas present. You can buy so many stocks with world class, global franchises which are protected with low multiples and strong balance sheets."

His fund owns shares of Apple (AAPL.O), Lowe's (LOW.N), Target (TGT.N) and Kenneth Cole KCP.N.

"Net, net this is a pretty good time to be a shopper because of the flash sales, and it is also a pretty good time to be a retailer," he said. "Things are not quite as bad as they have been made out to be a few months ago."

"If I could short the cupcake market, I would," he quipped.

Art Steinmetz, chief investment officer of OppenheimerFunds

Steinmetz, who oversees about $170 billion in assets, said the time might be drawing near to jump back into European sovereign debt.

"It's tempting to get into some of the European sovereigns at these kinds of spreads," he said. "As we speak we are tempted to get involved. But we still have very little exposure to most European countries."

OppenheimerFunds holds "a substantial amount of Italy" as opposed to any debt of Greece, Portugal or Spain. The risk-reward on Italian debt looks very attractive, Steinmetz said.

"Italy's ability on its fiscal issues is stronger. Italy is a very substantial country, and is more likely to get support than most of the other countries."

(Reporting by Jennifer Ablan, Sam Forgione and Ros Krasny; Editing by Matthew Goldstein and Leslie Adler)

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