Mario Gabelli, Chairman and CEO of Gabelli Funds, was on CNBC today (December 17th 2013) below are the clips from the show.
Mario Gabelli says free market capital is very important for the social media companies. Discussing his top booze and “aging” stock picks is Mario Gabelli, Chairman and CEO of Gabelli Funds. Discussing media stocks including Time Warner and Viacom, with Mario Gabelli, Gabelli Funds Chairman and CEO. He discusses media mergers. Mario Gabelli, Gabelli Funds Chairman and CEO, discusses American innovation, including fracking which is creating jobs. Mario Gabelli, Gabelli Funds Chairman and CEO, says Timken could make an investor 40 percent in the next 2-3 years. Mario Gabelli, Gabelli Funds Chairman and CEO, says he is “painless” when it comes to looking ahead to the markets next year. He says he doesn’t want to buy into ETFs.
Videos and transcript below
Hedge Funds: Small Firms Profit As Big Names Close In 2020
At the beginning of July, Lansdowne Partners, one of Europe's oldest and best-known hedge fund managers, announced that it was closing its flagship hedge fund after a run of poor performance. The closure is the latest in a string of high-profile hedge funds that have decided to shut up shop in recent years. Billionaire investor Read More
isten, i’m going to use the f word, fracking — — american technology has unleashed the power of americanmanufacturing and brought back and is creating jobs. hydraulic — going down horizontal and fracking have created an extraordinary — and this is innovation, and this is technology — to the degree that you want to talk about technology within the framework of the ciscos of the world, big data, mobility, and cyber security are areas that we’re focused on in addition to 3-d. so we have some intellectual talent putting work into theseareas, because we think over the next three to five years it’s aninteresting way to go. and we have some names that i don’t — i have not bought them yet, because they’re not in my sweet spot. mario, would you go, though — if you go into high tech, would you look for the big cap names or would you look moretowards those under-the-radar names that potentially have much more upside? they’re not necessarily under the radar but small or mid-cap, and we believe the structural changes in the area of wall street are the unloved. that’s where the bargains are. that’s where you create the extra juice to the portfolio. the problem is buying them. and you can’t buy themofficially in an up market, because you have — if you thinksomeone is worth 20, you wouldn’t pay 18 just to getsomebody invested. you want to buy it at 12. you know, christmas doesn’t — we’ve only got 9 1/2 trading days left in the year.
yeah, you have to do all of the digital commerce, e-commerce, and you have to do this area, and over the next five, ten years, it’s going to be full into what we like, and the free market allocating capital to these companies is a very important part of the process, like in 1900, ’99, b-to-b and c-to-c, and some ofthe companies like x, y, z went from 25 to 0, and that’s going to happen. but when i was in budapest in 1990, after the berlin wall came down, they were in the steel mills, essentially the planned economies don’t work. you go to cuba, and you’ll seethat. the free market, with all of the flaws, on all of the problems of allocating capital through these ipo processes, is still the best of alternatives. you don’t — i do not own it to answer thequestion, own a tiny amount of twitter and a tiny amount offacebook. you did? we run $45 billion. if i own a thousand shares it’s a lot. the operative word is did. we still do. it’s tiny.okay. tiny. i hear you. you got to keep — uknow, we do r and d work. if we didn’t do, pandora is an example, on the other side of the coin we own a lot of companies, over 5% of 100companies that are right in the
i understand you’ve been buying timken. tkr. this is a company i started following 30, 40 years ago. so you go out to canton, and visit d. bold, and timken within the framework announced the splitting of the company. taking the steel business, putting it out, taking the remaining bearings business, the stock’s around 51-2, what’s it worth? and what’s it worth in years and a deal with skf buying a bearings company. and you can see the company exit steel business, doing quite well. two, three years from now, you make 40%. you think their margins can get where they were, before they posted the most disastrousstock? i sat down and listened to the conference call when they announced the splitup. yeah. and they blew it. they didn’t understand their own business. the stock fortunately dropped 12 points, which is good. from 62 to 51 or something. — bought more on that news? i didn’t pay attention to that. do you think margins can actually improve and recover is my point?the timken ex the steel business should do quite well over the next five years. what it is, essentially, is a pretty good bet on the global mining business, right? i mean, that’s — part. that’s where they were hurt, right, or am i wrong? you can look at the segments of their business, you look at their core competencies, and they’re pretty interesting. and we have a tiny position, and it’s work in progress for us. it takes us two years to buy a position. we hope to harvest it four years later. it’s nice, because different exposure. you have aero, energy, mining. so it’s — you would like to have them bigger in commercial aviation. for example, we have a company that makes bearings, and we think the company is attractive, and getting a huge taindtailwind, tied to the middle class of china and india. a wonderful play, commercial aviation. timken is not as big as a direct
ot done well in 2013, or what sectors will do well three, fouryears? we have a very low turnover. the portfolios do 6%, 7%, 8%, so being up x, y, z%, like 30%, you have to have stocks that work. what will work in 2015 and ’16, and what are the dynamics that will unfold in the fourth quarter of 2014 to give you a tip-off? that’s how we look at stocks. and every day, scott, every day financial engineering, deals, so on give us bargains.mario, do you factor in the late 2014 story into ’15 and ’16 is about tightening possibly? no, that’s already in place. you have to assume — you have to assume the world is 3 and 6, 3% on the short, 6% under 10. and what’s the value stream? what multiples? and the economic environment both in the united states and globally when that occurs? and what’s the normal rate of return that you can earn as an investor? the next 10 years, even allowing 3 and 6, you basically concede an etf, like milous market index, making 5%, that’s not so bad. you feel squenly pretty good about the markets’ prospect for 2014? no, not really, because i obvious will to the degree the market is a function of the earnings, a function of the multiple and it affects interest rates, psychology can shift. mr. market, on the other side of the markets that you can double your market. if i can double my money in five years, it’s 14%, that’s not bad. you don’t really feel good about the storm next year? i feel don’t feel bad, i don’t feel anything. i’m painless about the market. i don’t want to buy an etf, scott. i want to buy what i think will earn the clients a return. if i have a private wealth management that’s after tax, i have to hold it 12 months and a day, even in today’s bad tax structure, if i have tax-free accounts, i have moreflexibility. you don’t want to buy into a bubble either, regardless of what you’re buying? right? if people are worried about — i don’t care what people worry about. the fed came in a year and a half ago to reflate the financial markets. the consumer is at an all-time — last year was 130, it gives you some competitiveedge, which is not necessarily, but it’s there.