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Gabelli: Don't Bet Against the Dollar

Monday, 27 Jul 2009 01:39 PM

While contrarians and pundits are all predicting doom for the dollar, U.S. fund manager Mario Gabelli has a different idea.

“Don’t bet against the dollar,” said Gabelli, who cited a strong belief in American ingenuity and believes the dollar has long-term viability.

In an interview with Moneynews.com’s Dan Mangru, Gabelli pointed to a host of different factors that are influencing the dollar such as interest rate differential, purchasing power parity, confidence, and structural decline.

“A year ago, the dollar was particularly weak … it’s been extraordinarily strong for the last 12 months.”

However, Gabelli believes in the short-term — in the next 12 months — the dollar is “not going to be a friend.” That’s why he likes companies that are both global and domestic. He points to companies such as Wynn Resorts Ltd., which he believes has become the “Goldman Sachs” of gaming.

During the interview, Gabelli discussed his long-term outlook for the market. He feels that major indices could generate anywhere from 7 percent to 9 percent for the next 10 years.

Historically, Gabelli illustrates the Dow Jones has not gained anything over the last 10 years, when it also traded above 9,000.

The Dow Jones Industrial Average recently broke 9,000, a level that it last achieved in January 2009.

Gabelli also pointed out the need for regulation on Wall Street in response to the recent subprime and credit crises.

“In the Bush administration, the sheriff was not only looking the other way but was encouraging the rogue behavior.”

Gabelli points to the theories of Adam Smith in allowing markets to regulate themselves but said that America still needs to have a “traffic cop.”

Mario Gabelli is the founder and chairman of GAMCO Investors, a New York Stock Exchange traded company with over $25 billion in assets.

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While contrarians and pundits are all predicting doom for the dollar, U.S. fund manager Mario Gabelli has a different idea. “Don’t bet against the dollar,” said Gabelli, who cited a strong belief in American ingenuity and believes the dollar has long-term viability. In an...
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2009-39-27
Monday, 27 Jul 2009 01:39 PM
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