Investors are having trouble shaking off pandemic jitters - and that's creating hidden opportunities in sectors like travel, leisure, and sports, says Howard Marks

• Pandemic-afflicted sectors may be worth a second look as Delta variant fears have scared investors away, billionaire investor Howard Marks said in an interview with Bloomberg.
• Sectors like airlines, hotels, resorts, movie theaters, sports, and concerts could be undervalued.
• Marks has argued that the market's irrational excesses can give level-headed investors a leg up.

Pandemic-afflicted sectors may be worth a second look as Delta variant fears have scared investors away from the travel and leisure industries, billionaire investor Howard Marks said in an interview with Bloomberg.

Sectors like airlines, hotels, resorts, movie theaters, sports, and concerts "are the kinds of things that people are worried about," said Marks, co-founder Oaktree Capital Management, the world's biggest distressed debt firm.

"And worrying transforms into lower asset prices," he told Bloomberg.

Marks's Oaktree invests in or lends to companies that are in dire financial straits, on the theory that a bargain can be found in areas more risk-averse investors might avoid. This year, Oaktree has been delving into "rescue financing" - that is, lending to firms on the brink of bankruptcy or default that need immediate cash.

A low-yield world makes it difficult to find worthwhile buys, and finding "hidden gems" may require looking abroad, Marks said.

Marks, widely known in the financial world for his investor memos, has argued that the market's irrational excesses can give more level-headed investors a leg up.

"If you want to understand your market, you have to understand the motivation of the people in it, because that's all the market is," he said in July.

But even still, earning excess returns amid low interest rates will be challenging no matter an investor's skill or insight.

"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 that there's no easy answer," Marks told Bloomberg.