Welcome to Value Investing with Legends!

Tano Santos (0:00)

Value Investing is more than an investment strategy. It's a fundamental way of thinking about finance.

Welcome to Value Investing with Legends, a podcast hosted by Tano Santos, the David L and LCM Dodd Professor of Finance at the Heilbrunn Center for Graham and Dodd Investing at Columbia Business School. Our mission today is to promote the study and practice of Graham and Dodd's original investing principles, and to improve investing with world-class education, research, and practitioner academic dialogue. In this podcast, you will hear from some of the world's greatest investors, their views on the investment management industry, how they develop their investment process, and how they see the field changing over time. To learn more and to subscribe to this podcast, please visit grahamanddodd.com.

Tano Santos (0:50)

Welcome to the Value Investing with Legends podcast. I'm your host Tano Santos, the David and LC Dodd Professor of Finance and the Faculty Director of the Heilbrunn Center for Graham and Dodd Investing here at Columbia Business School in New York City. In this podcast, you will hear conversations with the great value investors of the day. We will discuss their methods and ideas, as well as their views on current and even future market conditions. Our focus will be on value investing, but from time to time, we will explore how the other half does it, and compare other approaches to investing to value investing. You can always visit our website valueinvestingwithlegends.com for schedules and updates.

And now, without further ado, to our first guest.

I cannot think of a better guest for our inaugural podcast than the legend who visits us today. Of him, Forbes wrote in 1977 that he's a prophet in the wilderness, an analyst broker who is convinced that small neglected stocks are where the money is going to be made in the near future. That person, of course, is the one and only Mario Gabelli. Mario, welcome to the Value Investing with Legends podcast.

Mario Gabelli (1:54)

Privileged to be here. I didn't realize I was going to be your first, but I'm sure you're going to have extraordinarily great and competent individuals following.

Tano Santos (2:01)

Of course, of course. Mario Gabelli, as all of you know, is the chairman and CEO of Gabelli Asset Management, which he founded as a broker dealer in 1977, and it is now a large diversified financial service firm. He was a Morningstar domestic fund manager of the year 1997, a generous donor to many academic institutions, including this one where he serves on the board, and a constant fixture of many TV programs and other media.

So to start this conversation, Mario, I wanted to go back to those early years and to explore a bit where the wild attitude that Ford's magazine was describing came from, and tell us a little bit about those early jobs that you had with Lowe Roads and William Witte, I think it was. Where do you get that contrarian spirit? I know that you had difficulties at the very beginning trying to convince others of your viewpoint.

Mario Gabelli (2:45)

Well, independent of that, let's start off even further back. I was an accounting major at a local school, Fordham, and you took X number of credits for accounting and finance, and then I came to Columbia.

Tano Santos (2:57)

You were the top of your class at Fordham, I learned.

Mario Gabelli (2:59)

Well, somebody had to be.

I was also president of the student body, and I organized what was appropriate in the 60s, including sit-ins. Independent of all of that, basically I went to Columbia, and one of the courses I took was with Roger Murray, who succeeded Graham and Dodd, and that was like the moon, the sun, and the stars setting in place. And so I always knew I wanted to be in the stock market. I didn't know what facet until I took that research program. So as a result of that research program, I took a job after I left in the research department of a firm called Loeb Roads, covering a variety of industries. So I graduated on a Friday, went to work on a Monday. On Friday night, Michael Steinhardt, who started an extraordinarily successful hedge fund, said, I'm gonna start this hedge fund, he quit. So I picked up his industries, which are auto parts, farm equipment and conglomerates.

So two years later, I had already recruited at Columbia and hired some other individuals and I covered business services and I picked up, because I grew up in the Bronx and I wanted to go to the West Coast with a greater focus than going to Cleveland, Milwaukee, Detroit, Monroe, Michigan and so on and Toledo and all those places in the Midwest where you do for the auto industry, I picked up the entertainment industry covering Hollywood.