Bob Robotti - Finding Opportunities In Cyclical Industries

In this episode of AUM, we are joined by Bob Robotti, President and Chief Investment Officer of Robotti & Co.

Bob delves into his career in value investing that spans over five decades. Bob shares insights on the cyclical nature of finance versus the cumulative nature of science and engineering. He recounts his early auditing experiences with Tweedy Brown and Gabelli, highlighting how they shaped his investment approach.

The discussion covers the importance of timing, identifying value investments in cyclical industries, and the competitive advantages of energy-intensive businesses in North America. Bob also talks about his investment process, the significance of board involvement, and advice for new investors entering the industry.

01:49 Bob's Early Career and First Exposure to Investing

04:24 The Rise of Value Investing

07:31 Learning from Industry Giants

10:46 Investment Process at Robotti Company

16:40 Challenges and Opportunities in Value Investing

20:15 Case Study: Builders FirstSource and Industry Consolidation

23:19 The Impact of Market Cycles on Business Consolidation

24:04 Mistakes Management Teams Make in Cyclical Industries

24:49 Case Study: Atwood Oceanics and Counter-Cyclical Investment

26:36 Strategies for Success at the Bottom of the Cycle

27:39 Understanding Grassroots Macroeconomics

28:42 Navigating Information Overload in Investing

32:21 The Future of Stock Picking vs. Index Investing

36:05 Energy Intensive Businesses in North America

38:05 The Impact of Tariffs on Industrial Companies

39:58 The Role and Value of Board Membership

41:50 Advice for Aspiring Investors

To see more about Robotti & Co check out https://advisors.robotti.com/