Today’s conversation is with the master of consumer brand investing, Tom Russo. Tom is the Managing Member of Gardner Russo & Gardner LLC, Partner at Semper Vic partnerships, and he oversees more than $9 billion through separately managed accounts and Semper Vic partnerships. Tom is also a board member of the Heilbrunn Center for Graham & Dodd Investing at Columbia Business School. Growing up in Janesville, Wisconsin, home of the Parker Pen Company, Tom saw first-hand the impressive prospects of family-controlled consumer brand with global appeal. Since then, he has become well-known as the go-to person for all things consumer brands. Whether you’re wondering about the development of a beer business in Africa or the strategy for developing a brand in a new market, Tom’s three decades of experience has given him extraordinary insight. On this episode, Tom and I dive into how he developed his investment philosophy, what he learned about investing during his early years before starting his career, the huge impact Warren Buffet had on his career and specializations, the main investment principles Tom follows, what you need to consider about a company before investing, why under-spending is a key risk factor Tom looks out for, and so much more!   Key Topics: How Tom’s early experiences while growing up in Janesville, Wisconsin influenced his thinking and perspectives (2:47) Why Tom believes in challenging ideas and continuous evaluation (4:21) The importance of considering multiple angles and opinions to mitigate risk (6:27) What Tom learned about himself as an investor in his first jobs after Dartmouth (7:52) Tom’s introduction to Warren Buffett and the concept of value investing while studying at Stanford (10:41) How Tom’s investment philosophy developed (12:21) Why you need to consider a company’s management structure and incentives in determining whether to invest (14:17) The two main investment principles Tom learned from Warren Buffett (15:58) Why Tom decided to focus on investing in family-controlled, international, consumer brands (17:06) The fascinating history behind evolving consumer habits (18:16) The connection between consumer brands and population and prosperity (19:15) How the long-term perspective of family-controlled companies can reduce agency costs (21:28) What Tom considers in assessing the ability of a company to succeed in a new international market (26:08) What we can learn from Home and Garden TV about the value of investing in full-force to facilitate long-term profits (31:36) Why Tom has high confidence in the power of specialization (35:40) How Tom approaches the issue of maintaining alignment with management (38:04) Why you need to be aware of the blind spots you may develop based on specialized expertise (39:56) How Tom analyzes a company’s valuation to determine the best time to invest and when to exit (42:42) How much does regulatory risk factor into Tom’s investment decisions? (49:32) Why Tom is concerned about the risks associated with Brexit (50:30) Tom’s approach to investing in companies in emerging markets (56:01) Tom’s thoughts on the future of value investing (59:06) And much more!   Mentioned in this Episode: Jack McDonald, The Stanford Investors Professor of Finance, Emeritus Benjamin Graham’s Book | The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel Warren Buffett, CEO of Berkshire Hathaway   Thanks for Listening! Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at valueinvesting@gsb.columbia.edu. Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!

Today’s conversation is with the legendary Mario Gabelli, the Chairman and Chief Executive Officer of GAMCO Investors, Inc., the firm he founded in 1977. A 1965 summa cum laude graduate of Fordham University's College of Business Administration, he also holds an M.B.A. from Columbia Business School, and honorary doctorates from Fordham University and Roger Williams University.   Since starting his firm Mario has been called “a prophet in the wilderness” by Forbes and strongly believes that the small, neglected stocks are where the money is going to be made in the future. With a focus on strong research and flexibility, it’s this foundation that has allowed the fund to successfully generate returns for clients even when facing a headwind in the market.   From his management technique to his investment rationale, Mario shares his perspective and strategies for maintaining positive results in an ever-evolving marketplace. On this episode, we talk about how Mario started out as a researcher, the benefits of a niche research focus, why it’s so crucial to build accumulated knowledge in your industries of focus, how Mario identifies investment and growth opportunities, and so much more!   Key Topics: Mario shares how he first became interested in Graham and Dodd’s investing principles (2:45) The early career opportunities that steered Mario’s research focus (3:19) How Mario ended up starting his own firm at the bottom of a major economic downturn (4:27) The market response to Mario’s niche research focus at his firm (5:38) How the private market value and catalyst concepts came about (8:00) The important lesson Mario learned on a research trip to Toronto in 1977 (10:55) Why Mario uses a global approach to master the dynamics of change in an industry (12:53) Mario’s management techniques for working with super-specialized analysts (14:49) When did the Gabelli Asset Fund and the Gabelli Growth fund get started? (18:30) How Mario identifies and connects political and industry events with investment and growth opportunities (20:22) The approach Mario uses for managing clients and the firm’s positioning under difficult market conditions (24:39) Mario’s perspective on the effect of economic cycles in various industries (29:39) The factors behind the decision to invest talent and funds into specific industries while staying away from others (33:10) The changes that Mario expects to see in the business and economic models based on the current market activity and projections (36:07) Mario’s thoughts on the evolution of public markets (40:15) Why multiple sustainability is Mario’s biggest concern currently (42:59) Mario’s advice to people interested in starting companies (45:35) And much more!   Mentioned in this Episode: GAMCO Investors, Inc Barron’s Roundtables   Thanks for Listening!   Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts.  And feel free to drop us a line at valueinvesting@gsb.columbia.edu   Follow the Heilbrunn Center on social media on Instagram, LinkedIn, and more!