El-Erian’s Terrific, but Not an Equity Guy: Gabelli

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Jan. 22 (Bloomberg) -- Mario Gabelli, chairman & CEO at Gamco Investors discusses biding for wireless spectrum, the evolving role of activist investors and Mohamed El-Erian’s exit from Pimco on Bloomberg Television’s “In The Loop.”

Ross us but there is a shortage of spectrum.

How do you play it?

It's on a global basis.

What companies will buy each other?

Michael white and charlie ergot will try to figure out a way and this is the right time for those two companies to come together and we like them both.

We think directv stock will be over $100 in three or five years.

We like a company in africa and south america.

It is $100 going to $200 over the next few years of spectrum and giving mobility and data and cloud, all of that comes together and that net neutrality.

What kind of return are you expecting?

I cannot comment on that.

We will probably lose money but such is life.

The margins are very thin, rght?

The bidding wars over this have gotten more and more competitive.

You got at&t and verizon who will not even bid for this block.

The quality spectrum will come up with the broadcasters where we have done quite well.

They will give up some of their spectrum and a reverse auction or some other process.

The notion of spectrum is like beachfront property.

We are short any to allocate and use it right.

That is on a global asus and 4g and the next generation of delivery will tell us the story.

And i want to talk about couple of companies you are involved in.

When i looked on your twitter feed the last time, you had given some complements to bill ackman and what he did at fortune brands.

They spun off jim beam and that was acquired by suntory.

We like it and we drink it.

We invested in it so that was a double hit.

You said thanks to bill ackman, what is next?

The other managers of companies split up the pot and it has worked out quite well for the owners.

What do you think of these activist investors.

? it's nothing different.

In 1960s, you had conglomerates and gulf and western and in the 1980s, you had michael milken greasing the system and 10 years ago, there was private equity.

You'll always have somebody who tries to surface online values.

They don't throw the values.

That is the fundamental difference.

The management grows the values.

They are there to shake the tree?

They say this is a good way to do financial engineering.

In 2013, we started seeing some of that but we started off 2014 with john malone putting his arms around tom rutledge.

Somewhere in there will be a market made.

You also saw centauri -- suntory.

The theme for 2014 is growth and use your financial currency which is your high stock rise and do deals, make a transaction.

Nelson palp has said he is fine with no longer a deal between mongolians and pepsico.

He will get a board seat and cut costs.

Mondolese with a 60 billion market cap is not a small company.

For an individual like nelson where we share a common ownership and legg mason and others, how will he do this?

Independent of whether he was there, he may do things faster.

Mongoplese has this gets, chocolate and confectionery.

It will grow double-digit in the developing world.

You will earn 50% in five years.

You are happy with that?

My clients are ecstatic.

If i can make 13% compound annual growth over the next five years versus and s&p that will grow five-seven percent, twice the s&p, why shouldn't they be happy?


We will be dancing in the streets.

Many people listen to you and your comments on the stock market and on various companies like this.

Many people listen to mom but i'll arian at pimco -- mohammed el-erian.

There was a company called shinovick, that's part of the free market system.

Mohammed is terrific but he is not an equity guy.

He is a fixed income guy.

I don't know what they need.

I will not comment on pimco.

This is a great business.

Where do you think he will go?

Hopefully, he does not go and take rex ryan's job at the jets.

He is a big jets fan.

Many people want to give it to that next.


He has said given how hard it is to generate good returns for a bond fund like the bill gross fund, he says it is no surprise there was a rift and the need to know into equities.

A friend of mine said it best -- buying bonds is like picking up nichols in front of a steamroller.

You have tapering and it will change.

I am in the camp that says we will go back to a more normal bond market area an.

It is three percent on the short end -- do you think we will get to that this year?

No, that's not on the works.

In the meantime, stocks will do well.

Stay with me for a moment.

Mario gabelli will stay with me because we will talk about

This text has been automatically generated. It may not be 100% accurate.


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