Robert Robotti, President and CIO of Robotti & Company Advisors, joins host Michael Mauboussin to explore a lifetime shaped by value investing. With deep roots in accounting and formative experiences auditing firms like Tweedy, Browne, Bob shares how those early exposures led him to a career buying underfollowed, undervalued companies. In this episode, Bob discusses how his contrarian approach has thrived amid market inefficiencies, especially in cyclical industries and under-the-radar public firms. He breaks down key investments, including Builders FirstSource and Tidewater, and explains why capital allocation, aligned incentives, and patience are critical to long-term success. He also addresses private equity, passive investing, and how AI might affect the future of both business operations and markets — and much more!

Key Topics:

• Introduction (0:00 )

• Bob's upbringing and early exposure to entrepreneurship (2:09 )

• How auditing Tweedy, Browne sparked Bob's interest in value investing (4:17 )

• Learning through Tony Pustorino and practical accounting (4:32 )

• Early influences from Walter Schloss, Joe Reilly, and Tweedy, Browne (5:39 )

• Experience working with Mario Gabelli (6:57 )

• Founding Robotti & Company and the original value edge (8:54 )

• Explaining pink sheet stocks and early investment strategies (10:00 )

• Philosophy on intrinsic value and discounted investments (14:31 )

• Mispricings from passive investing and cyclical businesses (16:24 )

• Views on private equity vs. public markets (19:27 )

• Being a generalist with deep knowledge in housing and energy (21:45 )

• Simplified valuation approach and the Builders FirstSource case (23:41 )

• Portfolio construction, sizing, and turnover explained (28:58 )

• Maintaining a patient capital base (33:38 )

• The Tidewater investment: thesis, board involvement, and strategy (36:42 )

• Capital allocation philosophy: buybacks vs. dividends (49:08 )

• Executive incentives and importance of management quality (51:02 )

• How Robotti sees AI impacting business and investing (53:13 )

• Thoughts on traditional business education and tangible assets (57:13 )

• Geopolitical risks, China's influence, and global economic concerns (58:03 )

• And much more!

Mentioned in this Episode:

• Robotti & Company Advisors

• Tweedy, Browne

• Gabelli & Company

• Builders FirstSource

• Tidewater Inc.

• Amrep Corporation

• Pulse Seismic Inc.

• Museum of American Finance

• U.S. Securities and Exchange Commission (SEC)

• Lucadia National

• Third Avenue Value

• Canadian Natural Resources

• Think Again by Adam Grant

• Grit by Angela Duckworth

• Teaming by Amy Edmondson

• Quit by Annie Duke

Thanks for Listening!

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