• Billionaire investor Howard Marks said investors should look at “out of favor” assets to make big gains. 
• These include the sectors that have suffered the most in the pandemic: retail, entertainment, hospitality and real estate stocks. 
• He told CNBC’s “Street Signs Asia” Wednesday: “The opportunities are in the things that are out of favor.”
•  Marks thinks people can “still make people a lot of money” from tech despite its recent sell-off.
• Visit Business Insider’s homepage for more stories.

Billionaire Howard Marks has a new message for investors, look at ‘out of favour’ assets as they have a better chance of getting returns at a time when interest rates are at rock bottom. 

The assets that Marks, who is co-founder and co-chairman of distressed-asset fund Oaktree Capital Management,  considers to be “out of favor” are those that suffered the worst from the lockdowns, including retail, entertainment, hospitality and real estate stocks. 

“Out of favour, we have real estate, especially retail real estate and real-estate in big cities. We have entertainment stocks, cruise stocks and hospitality stocks,” he said. 

“It’s not easy to find opportunities today,” Marks told CNBC‘s “Street Signs Asia” Wednesday. “You get to a point where everything is selling at a fair price relative to the very low interest rate but still at very low prospects of returns. And I think that’s where we are.” 

US indices have fallen to their lowest in a month this week, led by a steep decline in major technology stocks, including Tesla, which posted a record 21% drop on Wednesday.

Marks said investors could “still make people a lot of money” from tech stocks, by identifying those that are likely to perform well over the longer term. 

Read more: Fred Stanske uses the insights of Nobel winner Richard Thaler, the ‘father of behavioral finance,’ to beat the market with under-the-radar stocks. Here’s how he does it – and 2 picks he’s buying for long-term gains.

Don’t worry about the tech-sell off 

Marks said investors shouldn’t worry too much about Wall Street’s recent sell-off and noted markets “can’t tell what lies ahead.” 

“Remember that the market went up roughly 60% from the low of March 23 to the other day, and now it’s given back 6% so it’s still way off from the bottom, it’s still in the vicinity of what was an all-time high set in February,” he said. “Maybe things went too well and a few people decided that stocks should be a little lower, so they sold them off especially in tech.”

Electric vehicle maker Tesla, which has risen by more than 300% this year, fell 21% on Tuesday after its shock exclusion from the S&P 500 index. The company turned a fourth consecutive quarterly profit in the three months to June 30, meeting the last of the benchmark’s eligibility criteria but still did not make the cut. 

Read more: 4 experts break down the drivers behind the sudden plunge in tech stocks that’s dragging the entire market lower – and share their best recommendations for what investors should do as the election approaches

“Markets seem to be getting more volatile … everybody gets a hair trigger and is looking at the short-term performance as if that means anything. What really means something is whether you hold stocks for the long run and whether you hold good ones,” Marks said.