Robert Robotti - From Pink Sheets to Portfolio Management: Bob Robotti's Value Investing Journey

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Nov 21, 2025

Robert Robotti, President and CIO of Robotti & Company Advisors, shares his lifetime journey in value investing, stemming from his roots in accounting and experiences at Tweedy, Browne. He discusses his contrarian approach, thriving on market inefficiencies, and highlights key investments like Builders FirstSource and Tidewater. Bob emphasizes the importance of capital allocation, aligned incentives, and patience in investing. He also shares insights on private equity, the impact of AI on markets, and the evolving landscape of tangible versus intangible assets.

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ANECDOTE

From Audits To Value Investing

Robert Robotti learned value investing by auditing Tweedy, Browne and observing their pink-sheet approach firsthand.
Those early experiences shifted him from pure accounting to buying deeply discounted, underfollowed securities.

INSIGHT

Why Pink Sheets Created Value

Pink sheet stocks were over-the-counter, low‑disclosure companies that traded at deep discounts and created fertile mispricing opportunities.
Robotti used tangible accounting metrics, like net working capital, to identify cheap, underfollowed securities.

INSIGHT

Valuing Cyclical, Asset‑Heavy Businesses

Intrinsic value equals discounted future cash flows, but Robotti emphasizes replacement value and normalized earnings for cyclicals.
He buys businesses trading far below normalized earnings with a wide margin of safety, expecting long, uncertain payoff horizons.

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Robert Robotti, President and CIO of Robotti & Company Advisors, joins host Michael Mauboussin to explore a lifetime shaped by value investing. With deep roots in accounting and formative experiences auditing firms like Tweedy, Browne, Bob shares how those early exposures led him to a career buying underfollowed, undervalued companies. In this episode, Bob discusses how his contrarian approach has thrived amid market inefficiencies, especially in cyclical industries and under-the-radar public firms. He breaks down key investments, including Builders FirstSource and Tidewater, and explains why capital allocation, aligned incentives, and patience are critical to long-term success. He also addresses private equity, passive investing, and how AI might affect the future of both business operations and markets — and much more!

Key Topics:

Introduction (0:00)
Bob's upbringing and early exposure to entrepreneurship (2:09)
How auditing Tweedy, Browne sparked Bob's interest in value investing (4:17)
Learning through Tony Pustorino and practical accounting (4:32)
Early influences from Walter Schloss, Joe Reilly, and Tweedy, Browne (5:39)
Experience working with Mario Gabelli (6:57)
Founding Robotti & Company and the original value edge (8:54)
Explaining pink sheet stocks and early investment strategies (10:00)
Philosophy on intrinsic value and discounted investments (14:31)
Mispricings from passive investing and cyclical businesses (16:24)
Views on private equity vs. public markets (19:27)
Being a generalist with deep knowledge in housing and energy (21:45)
Simplified valuation approach and the Builders FirstSource case (23:41)
Portfolio construction, sizing, and turnover explained (28:58)
Maintaining a patient capital base (33:38)
The Tidewater investment: thesis, board involvement, and strategy (36:42)
Capital allocation philosophy: buybacks vs. dividends (49:08)
Executive incentives and importance of management quality (51:02)
How Robotti sees AI impacting business and investing (53:13)
Thoughts on traditional business education and tangible assets (57:13)
Geopolitical risks, China's influence, and global economic concerns (58:03)
And much more!

Mentioned in this Episode:

Robotti & Company Advisors
Tweedy, Browne
Gabelli & Company
Builders FirstSource
Tidewater Inc.
Amrep Corporation
Pulse Seismic Inc.
Museum of American Finance
U.S. Securities and Exchange Commission (SEC)
Lucadia National
Third Avenue Value
Canadian Natural Resources
Think Again by Adam Grant
Grit by Angela Duckworth
Teaming by Amy Edmondson
Quit by Annie Duke

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