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Investors are in denial about the energy bust: Glazer

Investors remain in denial about the consequences of lower energy prices, and the market has not yet priced in the negatives associated with them, Larry Glazer, managing partner at Mayflower Advisors, said Thursday.

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As much as a third of capital expenditures could be affected in some way by falling energy prices, with net importers such as South Korea and India benefiting and various industries in producer countries absorbing the pain, he told CNBC's "Squawk Alley."

"If you're a Texas home builder, go back to 1986, the last time you had an energy bust of this magnitude. Those were tough times. It took 10 years to dig yourself out of this hole, and I think that's the story we could have," Glazer said.

"You may not have a pipeline running through New Jersey, but the steel is made in Ohio, so it affects a lot of places," he added.

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Asked whether the impacts will be limited to certain U.S. regions, Glazer said 15 to 20 percent of the high-yield debt market is exposed to the energy sector, and many of the bonds Wall Street sold the last two years are now under water.

"If you can't make your debt service, it starts to affect the credit markets, and everything revolves around the credit markets."

He further noted that lower energy prices will hurt Canada and Mexico, the United States' largest trading partners.

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The U.S. energy boom story is not dead, Glazer said, but it may go on hiatus for a couple of years.

"It's a long drink of water that you have to take to get back to an energy boom when you've drilled a lot of holes and the holes are not profitable," he said.