Bad decisions have been made in the debt market that will ultimately lead to good investment opportunities, noted debt investor Howard Marks said Wednesday.
"When those bad decisions are going to be put the test and fail and present opportunities to us, we never know," Marks said in an interview on "Power Lunch" from the Sohn Investment Conference.
That said, there are certain areas to watch, such as oil and gas and other metals and mining. That's where he believes the worst decisions have been made.
"People lent a tremendous amount of money to companies in those sectors … whose revenues are enormously dependent on the price of their products, which is unpredictable," said Marks, the chairman and co-founder of Oaktree Capital.
"A lot of mistakes were made. Some of them have already presented. The default rate on high-yield bonds is up and most of the increase comes in those sectors."