Mario Gabelli Talks Stocks
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Gamco Investors Inc. (NYSE: GBL) Chairman Mario Gabelli appeared on FOX Business on Thursday to discuss his view of the Dow reaching 20,000 by 2020 and his recommendation to buy into suppliers in the recovering economy.
Gabelli, who has more than $26 billion in assets under management, sees the markets moving up as inflation picks up steam it what he calls the 20:20 prediction. He believes earnings right now are very powerful, and see companies as improving their balance sheets, and a lot more deals will result in the coming years.
“It’s not very complicated. In the year 2000, the DOW closed around 11,000,” Gabelli said. “Go back to 1900 it was like 60. During that we had a couple of world wars, a super inflation, a lot of choppy markets. Look at the next 90 years. Shouldn’t the market do the same 5% with inflation picking up?”
Over the next several years, Gabelli sees the suppliers and vendors as the area for investors to take advantage of. With the railroad tonnage improving, trucker tonnage improving and airline traffic growing, he sees a company like Navistar International Corp. (NYSE: NAV) as a prime example of how to invest to take advantage of this trend.
“In the past 10 years, the US truck manufactures sold almost 2 million trucks. Last year it was 95,000. For the next 5 years, it will be going up. So you buy a company like Navistar.”
Also, the component suppliers to companies like Boeing Co. (NYSE: BA) will also do well according to Gabelli.
Gabelli added what he referred to as his “three Vs” for stock picks right now starting with Viacom Inc. (NYSE: VIA), which should see its advertising revenue benefit from a rising confidence level of the consumer in the recovering economy.
Next was Vimpel-Communications (NYSE: VIP), which Gabelli sees as a placeholder for all companies in the wireless market. Vivendi SA will also be strong according to the Gamco chairman, as the world is thinking about telecom.
“Wireless companies are selling at 5 times or 6 times the cash flow and what will change is 5 years from now, you go to the cloud computing and they own the highways and they are going to have to get paid for it.”
Gabelli, who has more than $26 billion in assets under management, sees the markets moving up as inflation picks up steam it what he calls the 20:20 prediction. He believes earnings right now are very powerful, and see companies as improving their balance sheets, and a lot more deals will result in the coming years.
“It’s not very complicated. In the year 2000, the DOW closed around 11,000,” Gabelli said. “Go back to 1900 it was like 60. During that we had a couple of world wars, a super inflation, a lot of choppy markets. Look at the next 90 years. Shouldn’t the market do the same 5% with inflation picking up?”
Over the next several years, Gabelli sees the suppliers and vendors as the area for investors to take advantage of. With the railroad tonnage improving, trucker tonnage improving and airline traffic growing, he sees a company like Navistar International Corp. (NYSE: NAV) as a prime example of how to invest to take advantage of this trend.
“In the past 10 years, the US truck manufactures sold almost 2 million trucks. Last year it was 95,000. For the next 5 years, it will be going up. So you buy a company like Navistar.”
Also, the component suppliers to companies like Boeing Co. (NYSE: BA) will also do well according to Gabelli.
Gabelli added what he referred to as his “three Vs” for stock picks right now starting with Viacom Inc. (NYSE: VIA), which should see its advertising revenue benefit from a rising confidence level of the consumer in the recovering economy.
Next was Vimpel-Communications (NYSE: VIP), which Gabelli sees as a placeholder for all companies in the wireless market. Vivendi SA will also be strong according to the Gamco chairman, as the world is thinking about telecom.
“Wireless companies are selling at 5 times or 6 times the cash flow and what will change is 5 years from now, you go to the cloud computing and they own the highways and they are going to have to get paid for it.”
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