Oaktree: This Shock Will Lead To Further Price Dislocation, Which Should Expand The Number Of Stocks That Enter “Value” Territory

Johnny HopkinsOaktree Capital ManagementLeave a Comment

Here’s a edited excerpt from a March 11 conversation among Oaktree’s chief product officer and a trio of portfolio managers titled – Special Edition: Risks And Opportunities In EM Amid A Global Slowdown, in which they discuss the best opportunities and associated risks of investing in emerging markets today. Here’s an excerpt from that excerpt:

Nicole Adrien: Recognizing that the COVID19 situation is very serious — affecting lives, communities and economies — do you think, as investors, that its shock presents, on balance, more risk or more opportunity?

Pedro Urquidi: I would say unequivocally more opportunity. The degree will differ by market, country, industry and so forth, but the dislocation we’ve witnessed isn’t likely to be short-lived, and I believe its effects will be widespread.

Julio Herrera: More opportunity, for certain. We’re looking closely at deeply cyclical sectors such as steel, oil and gas, chemicals and transportation. There will be value opportunities there that we’ll look to mine, despite what now appears to be a relative lack of liquidity.

Frank Carroll: This shock will lead to further price dislocation, which should expand the number of stocks that enter “value” territory. This for us, on balance, tilts the scales toward greater opportunity.

You can find the entire excerpt here: Oaktree: Special Edition: Risks And Opportunities In EM Amid A Global Slowdown.

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