Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
informed buyer. It was a phenomenal opportunity, and Gabelli made
good money for his investors. The environment has since changed. I
think we’re now in an age where the public market value is likely to
be higher than the private market value. But this process worked back
then.”
During the 1980s, private market values were often determined by
looking at similar transactions within like industries. For example, if
a food company was bought for 20 times forward earnings by an
outside acquirer, the assumption was that other food companies were
worth the same multiple. Therefore, it was relatively easy to compute
a company’s private market value if you could estimate forward
earnings and what similar competitors were being bought out for.
Gabelli’s impressive early performance at selecting undervalued
stocks, combined with his media savvy, got him a lot of attention
from numerous financial publications, including Barron’s. In no time,
he became a celebrity investment manager, and his firm started to
grow. In 1985, he asked Bramwell to become his director of research.
She joined him that November. Gabelli soon found himself inundated
with requests from individual investors who read about him in the
press and wanted him to manage their money. Most of these folks
had relatively small accounts, which are most effectively handled
through a single pool, like a mutual fund. So the Gabelli Asset Fund
was born the following year.
GABELLI GROWTH
Mario Gabelli was clearly making a name for himself as an expert
at picking stocks based on private market valuations, but this shrewd
businessman knew he needed more than just one fund and investment
style to build an investment empire. With Bramwell’s help, he developed
a plan for starting an entire fund family. The first logical
addition was that of a pure growth fund, which Bramwell would
manage. It was a perfect complement to the value-oriented Gabelli
Asset Fund. Bramwell wrote the original investment policy for what
became the Gabelli Growth Fund. She was named as its sole portfolio
manager in the initial prospectus.
Gabelli Growth was launched in April 1987. The market was already
up about 20 percent for the year, and Bramwell was an unknown
entity. Like any fund, Gabelli Growth couldn’t be listed in the paper
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