(Bloomberg) — Markets likely haven’t hit bottom but that’s no reason not to buy the dip, Marc Lasry, chief executive officer of Avenue Capital Group LLC, said in an interview with Bloomberg TV.
“You’re going to have more selling, more pain, and it will continue between now and the end of the year,” Lasry said.
“But you can never time a bottom, so you want to get invested when you can.”
Equity indices could fall another 5% or 10% as investors try to game out the Federal Reserve’s moves, but much of the downside potential is already priced in, Lasry said.
In credit, the selloff is a boon to funds like Avenue, which focuses on troubled corporate debt.
“We’re seeing a huge amount of opportunities out there,” he said, citing Exela Technologies Inc.
debt as one example. Avenue bought Exela bonds at 35 cents for an approximately 33% yield, which means “we’re getting paid quite a bit” for the risk even as the fund believes that Exela will avoid a painful restructuring.
In the longer term, recession concerns are well-founded but the important question is how long such a contraction would last, Lasry said.
He expects the strength of the U.S. economy would keep such a downturn “pretty short.”
Meanwhile in crypto markets, where Lasry is invested through his 2021 investment in BlockTower Capital, he sees a bleaker outlook, largely because Bitcoin and other assets have been considered such a haven that their decline has inspired more panic.
“Nobody thought Bitcoin was going to go as low as it has, or Coinbase,” so “people now are very nervous,” Lasry said.
“Nobody knows what the bottom is for that.”
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