In his latest interview with Bloomberg, Howard Marks recommends investors look for opportunities in the downtrodden. Here’s an excerpt from the interview:
Well I think that private markets are usually less efficiently priced. That is to say they have deviations of price from value usually more so than the public market. So you want to go into the private markets except then you have liquidity risk.
You want to go into alternative markets like real estate, structured credit, complex instruments that are not homogeneous, but then you have manager risk because you need somebody to help you make the selections and you gotta get that right.
So these are the areas you want to look at. The things that are downtrodden. The things that did not hold their own last year and suffered from the pandemic.
You want to get the ones of those that will recover, not the ones that won’t. You want to look into the emerging markets and maybe China certainly, and the foreign markets in general but you need expertise to do that.
By the way we don’t think that the rest of the world economies are necessarily as strong as ours, although China’s is doing extremely well. So all of these are the off the beaten path locations where you might get some better risk adjusted returns, but there are risks involved.
You can watch the entire discussion here:
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