Mario Gabelli, the billionaire value investor and CEO of Gamco Investors, said while the Brexit vote plunged global financial markets into chaos, he scooped up two liquor-related shares.
Gabelli said his company bought Diageo stock, a $65 billion spirits behemoth, as well as the shares of the smaller Davide Campari Milano, an Italian beverage maker worth about $5.2 billion. Both stocks took a hit following the Brexit vote.
Gabelli had his eyes on those two stocks but was waiting on the right time to pounce, he told
CNBC. It turns out the Brexit market reaction provided the necessary catalyst, pushing down prices and giving the investor an even “better margin of safety and better upside,” Gabelli said.
"Value investors look at Mr. Market and the opportunity to give you a better margin of safety and better upside," he said.
“If you can find somebody in the UK, that is located in the UK, their expenses are UK, and they sell something in a U.S. country. You get the translation benefit,” Gabelli told CNBC.
“I happened to like companies that have pricing power that can do well in a global marketplace.”
Meanwhile, Newsmax Finance Insider Andrew Packer cautions that the average investor should just ignore all the Brexit doom and gloom chatter.
"Despite the fear out there, so far, Brexit looks like yet another bump on the road to your investment journey. For the moment, I’d place this in the category of geopolitical events, not a financial event. Like the US losing its AAA credit rating in 2011 or the 9/11 attacks in 2001. The impact is more political than financial. That’s why stocks have bounced so quickly — indeed, historically quickly," Packer explained.
"Typically, stocks recover from such events within the space of a few weeks, and more often than not tread higher from there," he said.
"What does this mean for US investors? A hint, but not much, of an opportunity if you’re willing to sift through the data. Most US stocks have little exposure to the UK. For multinational firms that do, it’s a small percentage of revenue, and the large drop in the pound makes the UK a more compelling place to invest than just a week ago. And, potentially, there’s the opportunity for US firms to have operations in Europe without having to deal with the increasingly bureaucratic decisions of the EU apparatus."
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