Fund
or affiliation
- Gabelli Associates
Limited
- Gabelli
International Limited
- GAMCO
Methodology
- Modified Graham
& Dodd value investing with a
"catalyst" dimension.
Research/ Valuation
Techniques Employed
- There are certain
characteristics with regard to the value of the
franchise, the cash generating capabilities of
the franchise, and the quality of the management.
So you have qualitative and quantitative
measures.
- The private market
value is the summation of the pieces of its
business, by looking at cash, receivables,
inventory, off-balance sheet assets like
goodwill, franchise values, earning power. What
would an industrialist pay to own it?
- Private market value
multiples change over time. They are a function
of interest rates, capitalization structures,
taxes, all of which have an indirect impact on
the value of the franchise. Because of his
knowledge in this area, he became a leveraged
buyout guru in early ‘80s.
- Examples of
"catalyst" are: change in regulation,
divorce or death of a founder, family block that
wants a change in their tax situation.
- It’s no use if
a stock trades at $1 when the private market
value is $2, and in ten years the stock trades at
$1.5 and the private market value is still $2.
What you want is the private market value grows
at least faster than inflation plus a hurdle
rate.
Trading Techniques
Employed
- You have a notion of
price... within the context of "intrinsic
private market value"... Mr. Market gives
you opportunities to buy above... and below that
price... kind of blending of a series of
judgement with
- Gabelli looks for a
"catalyst" which will help narrow the
"private market value" and the stock
price to give him a rate of return within a
definable time period. The "catalyst"
is an important part of what pulls the investment
trigger.some mechanical and arithmetic exercises.
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Philosophy
and beliefs
- Within the framework
of concentration, if you read Berkshire
Hathaway’s annual report for the last 20
years, you’ll find that, if you understand a
business, buying the business has less risk.
- One of
Gabelli’s great investment themes is the
notion of time and place. You can be anywhere,
anytime. The distribution of infomration is going
through a major change. Some countries are
getting it first time, some are finding new ways
to communicate. On the copyright side, he looks
for things that travel well- music, MTV, jazz,
films, sports, news and entertainment.
History and other
facts
- Studied at Columbia
1965 under Roger Murray who co-authored Graham
& Dodd’s fifth edition.
- Gabelli said
"if I trace the roots of Gabelli, Cooperman,
Samberg and whole array of mid-’60s vintage
investors, you’ll find... value
investing."
- Gabelli’s
empire successfully bred
"personalities" like Elizabeth
Bramwell. He now has Howard Ward in growth,
Caesar Bryan in equities, gold and metals, Hart
Woodson in convertibles bond.
Performance Record
- 20% over 9 years:
Gabelli International Limited (an offshore hedge
fund) 9 full years since inception on 1 January,
1989
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