Tags: Gabelli | Time Warner | Viacom | Fed

GAMCO's Gabelli: Time Warner, Viacom Will Double Within 5 Years

By    |   Wednesday, 18 December 2013 11:20 AM

Media companies Time Warner and Viacom are hitting on all cylinders and will see their stock prices double in five years, predicts Mario Gabelli, CEO of GAMCO Investors.

"What [CEO] Jeff Bewkes has done at Time Warner, what [CEO] Philippe Dauman and [Chairman] Sumner Redstone have done at Viacom, it's cash generators, it's content," Gabelli told CNBC.

Both companies are using their cash flow to buy back stock, and Gabelli approves. "Viacom and Time Warner are both buy-and-holds," Gabelli said. "You'll have volatility, but that's ok."

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Looking at the stock market as a whole for 2014, Gabelli says he's not necessarily an optimist. "Psychology can shift very quickly," he told CNBC.

"On the other side, there are bargains where you can double your money over the next three or four years."

The Standard & Poor's 500 Index has soared 24.9 percent so far this year.

Unlike some financial experts, Gabelli is highly impressed with Federal Reserve policy. "The Fed came in 1 ½ years ago to reflate the financial system," he explained. "They've done a fantastic job at that. Consumer net worth is at an all-time high."

Others express concern with the Fed's growing balance sheet of $4 trillion.

Even among Fed officials, "there's discomfort in the sense that the portfolio could grow almost without limit," former Fed Vice Chairman Donald Kohn said last week at a Washington conference, Bloomberg reported.

The discomfort concerns "potential financial stability effects" and is warranted, he said.

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Media companies Time Warner and Viacom are hitting on all cylinders and will see their stock prices double in five years, predicts Mario Gabelli, CEO of GAMCO Investors.
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2013-20-18
Wednesday, 18 December 2013 11:20 AM
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