Mario Gabelli is the son of Italian immigrants and someone who managed to make a famous name for himself by being one of the most successful stock investors in both the 20th and the 21st centuries. Over the decades of his career, he has managed to outperform a wide range of competitors, thus cementing his status as one of the icons of his chosen field of expertise.
Furthermore, he has chosen to pair his career with a strong interest in philanthropic endeavors focused on education, which reflects his origins as someone who could not have succeeded without his academic excellence. Combined, these characteristics make it no coincidence that Gabelli is considered a leading light in his field, which is no small accomplishment considering the scope of his field as well as the ferocity of the competition within it.
Here are 10 things that you may or may not have known about Mario Gabelli:
1. Became Interested in the Stock Market At a Young Age
Like a lot of famous investors, Gabelli is said to have become interested in the stock market at a young age. In his case, he is said to have read market reports for fun, which was a rather remarkable departure from normal behavior of most children. Furthermore, it is interesting to note that Gabelli is supposed to have bought his first stock at the age of 13, though there is little said about whether that initial investment turned out to be successful or not.
2. Studied Under Roger Murray
While he was studying for his Master of Business Administration degree at Columbia Business School, Gabelli was taught by Roger Murrary, who made a lasting impression on him. For people who are unfamiliar with the name, the professor was a rather notable figure in value investing as well as the author of books such as the Fifth Edition of Security Analysis and The Graham & Dodd Value Investing Bible. As a result, it is no coincidence that his name is mentioned in the Graham & Dodd, Murray, Greenwald Award for Distinguished Value Investors created by Gabelli.
3. Is a Standard-bearer for Value Investing
Gabelli is one of the luminaries of value investing, so much so that his practices can be considered the standard against which the practices of other value investors are measured. In brief, value investing is when the investor seeks out what are seen as undervalued stocks, meaning stocks that are worth less on the stock market than what they should be worth based on said individual’s assessment of its intrinsic value. This is a sensible approach because the stock market is far from being a wholly rational entity, but complicated by the fact that assessing intrinsic value is much more complicated than it seems.
4. Rated Companies By Cash Flow Rather than Earnings
When Gabelli started out, he rated companies by their cash flow rather than their earnings, which was a rather interesting choice on his part. For people who are not sure about the difference between the two concepts, a business’s earnings is what it is making from its operations, whereas a business’s cash flow is the amount of cash that is coming in rather than heading out. Barring businesses that use cash basis accounting, the two concepts are not synonymous, meaning that choosing one rather than the other can produce significant changes in conclusions, with one example being how cash flow tends to make for more conservative analyses than earnings.
5. Trademarked the Gabelli Private Market Value with a Catalyst Methodology
For an example of Gabelli’s stature among value investors, look no further than the fact that he managed to trademark something called the Gabelli Private Market Value with a Catalyst Methodology. Like its name suggests, said methodology was used to assess the value of businesses so as to gauge whether they were worthwhile investments or not, which is why it saw extensive use in the leveraged buyouts of the 1980s.
6. Interested in Companies That are Winding Down
Gabelli is known to have had a strong interest in businesses that are reaching the end of their life-cycle, which is supported by how he recommended buying stock in a number of businesses that were soon either privatized or bought-out. This is an interesting contrast to a lot of other investors who prefer investing in start-ups, which tends to be a high-risk but also high-return sort of thing.
7. Managed to Outperform the Standard & Poor’s Index in Consecutive Years
It is not uncommon for investors to invest in a portfolio that is representative of a stock index rather than pick out individual stocks. After all, picking out winning stocks is complicated while the stock index trends towards the positive in the long run, meaning that the best investors are the ones who can beat the stock market on a consistent basis. Gabelli proved this between 1978 and 1985 when he managed to outperform the S&P index, so much so that he actually managed to get twice its rate of return in five of those years.
8. Member of the All-Century Team
Barron’s is a rather famous financial magazine, meaning that it was a real credit when it named Gabelli as one of the members of its All-Century Team. Like its name suggests, the All-Century Team is supposed to be 25 of the most influential figures in the mutual funds industry, though it is interesting to note that one of the 25 is an investing principle rather than a person. Unlike some of his peers, Gabelli was not named to the list because of his pioneering but because of his image as the consummate mutual fund manager.
9. Once Named Domestic Equity Fund Manager of the Year
In 1997, Morningstar named Gabelli its domestic equity fund manager of the year, which was because ten Gabelli equity funds managed an average rate of return of an astonishing 31.7 percent. It is interesting to note that a fair chunk of the return came from media shares that had been bought much earlier but failed to show much promise until 1997, which speaks volumes about the man’s remarkable if not perfectly precise insight into the stock market.
10. Served As Grand Marshal of the Columbus Day Parade
Gabelli has had the honor of serving as the Grand Marshal of the Columbus Day Parade that is held in New York City on an annual basis. The position is awarded by the Columbus Citizens Foundation to Italian Americans who have managed to make significant contributions, meaning that it is a visible recognition of Gabelli’s philanthropic endeavors.