In the interview, he discusses private market value and catalysts, and understanding what makes a company’s market value cheap. He also goes into detail about his value investing approach, including seeing the investment moves of other investors.
Below is one of Gabelli’s quotes from the interview:
“In the investment business, not only can you be theoretical, and have a great ability to understand and do analysis and how to do it in line with our industry standards…you have to also understand the saying, ‘how do you make money?’ Because as smart as our firm is, and as smart as the analysts we hire – you know, the privileged, hungry and driven, PHD’s of the investment world – the problem is, if you don’t show good results, the clients fire you.
So as a result of that, we said ‘what do we want to earn from that, in terms of the clients we earn money for?’ Our goal would be to buy companies that would generate 10 percent real, after tax and after inflation, in a two-year time period. If it was less than that, we wouldn’t get capital gains.”
To view the original video, visit: Value Investing: A Conversation with Mario Gabelli