Growing Rich - Arabictrader.com

KIRK KAZANJIAN
railroads to photography. She also looked for special situations, potentially
attractive stocks the bank’s clients didn’t already own in
their portfolios. But when her second child came along in 1978, she
went on maternity leave and never returned. “Although the research
was exciting, I’d had enough of internal meetings and wanted to take
some time off,” she says.
HEDGING HER CAREER
After a year at home, a Wall Street friend introduced her to the
manager of a new hedge fund who was looking for a research analyst.
“I joined the fund on a part-time basis for six years, and it was great,”
she says. “We had about $10 million when I started, and while I was
there it grew to around $60 million. We had a portfolio of 25 to 30
stocks and focused on growth companies with strong fundamentals.”
Meanwhile, Bramwell’s college classmate, Mario Gabelli, went out
on his own soon after William D. Witter was acquired. Originally he
started a firm that sold research to institutional investors. Before long,
an executive at one of the companies he was researching wrote him
a check and asked him to manage his money. That was the spark
Gabelli needed to branch out into the full-fledged investment management
business.
THE GABELLI CONNECTION
Gabelli has always been a popular value player. His favorite professor
at Columbia was Roger Murray, who followed in the footsteps
of Benjamin Graham. “When Gabelli first started to manage money,
he did well buying companies based on their private market values,
defined as what an informed businessperson would pay for the entire
business,” Bramwell observes. “To see why this worked so well, you
have to go back to the Carter administration, when PE ratios were in
the single digits. We had inflation that got up to 13 percent, and interest
rates were in the high teens. Cable and cellular companies, with
their monopolistic and duopolistic industry structures, were just beginning
to emerge. A lot of them sold below their private market
values and Gabelli saw that. When the public market price is less than
the private market value, you can arbitrage the difference by buying
the stock at a huge discount from what the company is worth to an
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