If the first week of trading this year has demonstrated anything it’s that the energy sector is still in driver’s seat. Crude oil is settling at a 12-year low — getting further pressure from the turmoil in China’s market.
But Marc Lasry, co-founder and CEO of Avenue Capital Group, a hedge fund with just under $13 billion assets under management, sees opportunity.
"I think energy has gotten oversold," Lasry says. "There's going to be a huge turnaround on energy, so whether oil stays where it is or starts moving up, the real question is: is it in the next 3 monthts, 6 months or a year?"
Lasry is putting this thesis to work as a participant in an annual stock selection competition, Portfolios with Purpose, where participants compete on behalf on their favorite charities. This year's competition kicks off on Jan. 18. Three groups compete in this fantasy-football-style stock contest with 5 stock choices -- a Novice Class, a Professional Class and an invite-only Master Class, that includes Lasry along with Appaloosa Management's David Tepper, Greenlight Capital's David Einhorn, and Pershing Square Capital's Bill Ackman.
And with regard to the pressure we've seen in the energy markets? "It's a huge opportunity in the energy sector," Lasry says. "China's not as big a factor as everyone likes to make it out to be."
His picks for the contest are centered around independent power producers he believes have already gotten hit pretty hard -- Chesapeake Energy (CHK), Dynegy (DYN), and Calpine (CPN). Lasry also sees upside for Macy's (M) and American Airlines (AAL) this year.
Lasry says he's focused on growth in the U.S. economy and is optimistic on credit markets as well. "I think credit got oversold last year," he says. "You have a repricing in credit because of where energy was. I think you're going to find that credit is going to do very well this year."
Lasry's charity of choice is the Clinton Foundation, and he voiced confidence in Hillary Clinton, who he supports.
"Hillary is going to be the next president of the United States," he says, adding that he sees her as the best candidate for the job and best equipped to address some hot-button issues like inequality.
On inequality, he says: "I wish there was a silver bullet. I dont think there is," adding that a a key factor needed is giving middle-class households more access to capital.
When asked about controversial Republical presidential candidate Donald Trump, Lasry says there's a lot of respect for Trump in the business community. "Donald's an extremely bright individual. He's leading in the polls. I think he'll end up being a worthy adversary for [Clinton] if he ends up becoming a nominee," he says.