Mario Gabelli, the CEO and CIO of GAMCO Investors, talked about Apple’s valuation five years from now with Andrew Ross Sorkin this morning on CNBC’s Squawk Box.
Here’s how the stock investor — who says he doesn’t own Apple even though it’s “statistically extraordinarily cheap” — evaluates the iPad and iPhone maker.
“Let’s look forward. They have a terrific one-percenter that’s no longer with us. He’s in heaven looking down on you, Andrew. And he basically said, ‘Look I created a new generation of products. I am the Walkman of this society. I’m basically the Nokia of today and I’m going to be your television set of the future.'”
“Five years from now, can they maintain a growth rate of 15%? In which case if they do and they have a constant multiple you’re talking about a trillion market cap. So I have a background and I hear the footsteps of the 1950s, Andrew, when bowling alleys were the hottest thing in the world. Then in the early 1960s the ICS’s the techtronics of the world. Then it was the hamburger flippers. Then it was the Nifty 50, and you know the Polaroids, the Navistars and so on and then you go into the period in which TMTs the AOLs…
He doesn’t necessarily say this will happen, just that you can’t discount this possibility.
“I think that it will. I’m just looking out five years from now at a trillion dollars market cap for a company and you do have a bell shape curve of valuations. I heard the same arguments on Cisco. Apple will be a terrific company five years from now, but I don’t know the valuation.”
Check out the video clip below. His comments on Apple are in the last two minutes.