- In an interview with Bloomberg, billionaire investor Howard Marks said that epidemic-affected sectors could be worth a second look because the Delta variety has frightened investors.
- Areas such as airlines, hotels, resorts, movie theaters, sports and concerts can be devalued.
- Marx argues that unreasonable market surges can give top investors a leg up.
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In an interview with Bloomberg, billionaire investor Howard Marks said that epidemics-affected sectors could be worth a second look because the Delta variety of fears has driven investors away from the travel and leisure industries.
“People are worried about things like airlines, hotels, resorts, movie theaters, sports and concerts,” said Marks, co-founder of Octre Capital Management, the world’s largest troubled loan company.
“And the worry turns into lower asset prices,” he told Bloomberg.
Marx’s octreus invests or lends to companies that are in dire financial straits, on the premise that deals can be found in areas that can be avoided by high-risk investors. This year, Octrey is considering “rescue financing” – lending to companies on the brink of bankruptcy or default that need immediate cash.
Marx said the low-production world makes it difficult to find the right shopper and may have to look abroad to find “hidden gems”.
Marx, widely known in the financial world for his investor memoranda, has argued that unreasonable market surges could be a step towards higher-level investors.
“If you want to understand your market, you have to understand the motivation of the people, because that’s the market,” he said in July.
But still, it will be challenging to make extra profit in the midst of low interest rates, regardless of the skill or insight of the investor.
“The whole world is in this low-return environment and the question is how do you behave in a low-return environment and the answer is no easy answer,” Marx told Bloomberg.