10 Brilliant Mario Gabelli Quotes | Event Investing Strategy

Mario Gabelli is a billionaire financial analyst who has been listed as one of the most influential portfolio managers in the industry.

The son of Italian Immigrants he bought his first stock when he was 13 years old, since then he’s been hooked.

Today Gabelli runs GAMCO Investors which has an estimated $11.7 Billion in assets under management according to Invest With Legends.

What is Mario Gabelli’s Investment Strategy?

Gabelli’s investment strategy focuses on “Unloved companies” .

In an interview he stated:

“my approach to life is to Go where others fear to tread. Hell, I bought a Cadillac in the middle of the oil embargo.”

Fun Fact: He has recently spoken out about the Meme stocks and give a very balanced financial review of stocks such as AMC, of which was previously a shareholder until June 2020.

In addition, Gabelli has specialist knowledge of analyses Media companies from cable companies to Warner brothers. He is also a specialist in analysing Mergers & Acquisitions. 

“Either you make dust (buy it) or eat dust (short it)”

Investing Strategy: Long term, Contrarian, Special Situations, Deep Value Investor, International. 

1. Stay Humble

“If someone says “you made alot of money” it wasn’t always that way…I still ride subways” – Mario Gabelli (Billionaire Investor) 

A common trait i’ve noticed among many Legendary investors is that they are very humble & frugal. For example, Warren Buffett despite being one of the richest people on the planet has lived in the same House in Omaha since 1955. Buffett has even stated: 

“I don’t need fancy food, clothes or cars, I do what makes me happy”

2. Businesses don’t change value as quickly as the Market

“Businesses don’t change value as quickly as the Market” – Mario Gabelli (Legendary Investor)

Benjamin Graham the Father of Value Investing popularised the analogy of “MR MARKET”, a bipolar person who swings wildly from Pessimism to Optimism. In the Short term the stock market is governed by emotion such as Fear, Greed & outlook but in the long term it’s governed by fundamentals. 

3. Look for a Catalyst 

“We Focus on a Catalyst or event that will Surface the value of the company” – Mario Gabelli (Legendary Investor)

The goal of value investing is to buy a stock worth a dollar for 50 cents and then wait for the market to realise the true value. However, as the true value can often take many years to be realised a “Catalyst” can be a great supercharger. These could include, an earnings release, Market changes, a Merger and more. 

4. Invest into Small Cap stocks

“I think real bargains are what they would call the smaller, ignored & unloved companies” – Mario Gabelli (Legendary Investor)

Warren Buffett was once asked how would he invest to generate 50% returns today if he only had a small sum of money. Buffett stated he would invest into small cap stocks within his circle of competence.

Small cap stocks have high upside potential & less intuitional money invested into them, thus they offer potential opportunities.  However, the risk is they can be extremely volatile & move very fast on both the upside and downside, thus diversification is key.

5. Event Driven Opportunities 

“How do you make money? Spinoff, Split Ups, Liquidations, mergers & Acquisitions” – Mario Gabelli (Legendary Investor)

Any event offers the potential for volatility which offers the opportunity for a mispricing to be exploited. 

6. Don’t rush to Index Funds 

“I never understood the rush to index funds” – Mario Gabelli (Legendary Investor) 

Multiple studies show on average most active managers UNDERPERFORM the stock market. 

Over a 15-year investment horizon, 92.43% of large-cap managers failed to outperform the market on a relative basis.

Thus the news of this many years ago caused a rush to passive investing via index funds, even Warren Buffett states “Most people should just buy an S&P 500 Index Fund”. However, critics of this “rush to index funds” highlight that this often regulates your potential returns to mediocrity.

Regulated Returns:

The average return of S&P 500 index fund over the past 20 years is approximately 9.2% according to Goldman Sachs. Adjusted for inflation a balanced portfolio of international index funds has returns approximately 6%.

Now although 6% to 10% compounded annually is great, the upside is removed entirely. For example, From my own personal investments, we had Tesla stocks 700%+ return in 2020, ETSY 500%+ in 2020, Apple stock 120% etc. Now although not every stock performs this well the potential for life changing returns is there.

Market Valuation:

In addition, if everyone just invests into index funds then how high can the valuation go on these. For example, The mean Shiller PE  Ratio is 16 , the market is now trading at 39. Thus the market is trading at approximately 39 times earnings…how high is too high? During the dot com bubble the market traded at a schiller PE of 45 times earnings.

Personally I believe a strategy of both index funds & a few focused stock investments where you have insight is a valuable strategy.

To learn how Join our Stock Investing Course

7. Know your sleeping point

“Always keep your portfolio & Risk at your own comfortable sleeping point” – Mario Gabelli (Legendary Investor)

Self Awareness is key to being a successful investor, knowing how much risk your willing to take is key. I personally recommend having a separate rainy day fund & not investing any money which you cannot afford to lose. (This is not financial advice). 

8. Embrace the Free Market

“The free market works best when everybody is in a fishbowl & tells you there point of view” – Mario Gabelli (Billionaire Investor)

9. Know what Market your in

“We’re going from a Market that’s driven by momentum to a stock pickers market” – Mario Gabelli (Legendary Investor)

Know what market your in, is a momentum driven or more suited to a strategic stock picker. 

10. Be a Contrarian

“We like to BUY, BUY, BUY when everyone doesn’t want it” – Mario Gabelli (Legendary Investor)

Many of the greatest Legendary Investors are true contrarians, in that they bet against the consensus & aim to be right. Examples include, Warren Buffett, Sir John Templeton, Sam Zell , Michael Burry and more. 

Want to Learn how to invest? 

If you want to learn how to invest like Warren Buffett but with a growth twist check out our: Investing Strategy Course Places on our strategy course & in our Stock Research Platform are open for a limited time each month, so  click the blue links above to find out more now.

Mario Gabelli Quotes Gallery