We sat down for a lengthy, in-depth interview with legendary investor Mario Gabelli, founder, chairman and CEO of Gabelli Asset Management, to press him on whether stock picking still works in today's environment.
(The FULL Gabelli Interview — including exclusive stock picks and more — is available for CNBC Pro subscribers here.)
Here are the highlights of what he told us:
On investing vs. speculating:
"We want to own a piece of a business that we like, where the management comes to work every day and allocates capital to earn a higher return, and where we're buying it at a discount from where an informed industrialist would pay for the entire company."
"So we're looking for good companies at a reasonable price, and Mr. Market ... will [occasionally] give you the opportunities at a discount."
On day-to-day markets:
"What's different today is that information comes faster. There is a short-term reaction exemplified because of structural changes in the market."
"They eliminated the uptick rule. That means that you can go in and pound stocks by shorting ETF's and there's no safety net."
On individual investors:
"[You need] patience. And the individual investor has not necessarily bought into that program. Because they listen and they hear concepts like 'risk on, risk off,' as opposed to investing. And in addition to that, if you have an IRA account, you don't care about trading. Short-term gains are OK. [And] if you are a taxable individual ... it's not only what you make, it's what you keep."
"We as a country need an efficient way to attract individuals to invest in the market. So the robo-investing, going into your mobile phone and hitting a button to say instead of having a latte today, I'm going to put that in my [stock market] account. ... That is going to be an enormous way to have almost what I call 'impulse investing,' and for the long term, that is terrific."
On future stock returns:
"I have no problem with passive investment. ... You know, buying the S&P index over the next 10 years, in my judgment, you'll make 5 percent to 7 percent, unless inflation picks up dramatically."
"You want to buy a basket of securities because you believe in America, you believe in owning capital and you want your assets to grow."
On Gabelli's growth-oriented funds:
"Back in the 1982, '83, '84, value had done extremely well. We were extraordinarily blessed by having industries that were consolidating and had substantial returns. And all of a sudden, the market ignored growth. So we started a growth fund in the mid-80s."
On the best CEO he's encountered:
"Oh, there's been so many. Obviously Warren Buffett has done extremely well ... it's not someone that does touchy-feely stuff, OK? John Malone and all of the companies that he's invested in for an extended period of time. But America is blessed with CEOs that come to work every day and they work to compete on a global basis, they'll deal with the regulations that are unnecessary."
On Viacom CEO Philippe Dauman:
"Philippe was focused on using incremental cash flow, taking the share count from 722 million down to 398 million. But he wasn't instinctive as a programmer."
"We think that there's a tail wind that could develop. They have to get some monetization, they have to re-fix and reboot Paramount, which is not a difficult thing to do if you have the right people."
"It's a fixer-upper. But they do need someone that understands the digital world, and if Philippe can bring on the management team to do that, it's a challenge."
On not owning Netflix:
"We blew it ... we own a little bit, but it should've been a bigger portion of the portfolio."
On cable and media companies:
"News Corp. has got great content. And Brian and the Roberts family, look what they were able to do with content and distribution. And then the regulators in the U.S. just think locally, when you gotta think globally. You gotta let these companies become the corporate giants that they deserve to be, with scale."
On social media:
"When Facebook went public ... it dropped to $19-$22 a share. We bought it and then flipped it at $50. So we make a lot of mistakes, OK? And we will continue to make a lot of mistakes. And those mistakes will be buying companies at a price, and then when it goes higher, we don't buy it because it's past our margin of safety."
"I like the service [Twitter]. I like everything about it, because I know how to use it. I do worry about, you know, the world of compliance has not caught up with what's going on on Facebook, what's going on on Twitter, what's going on on social media."
On investors in Valeant Pharmaceuticals and biotech:
"I don't know what their thinking was. They clearly liked the notion of compounding returns without paying tax."
"We like [biotech]. We like the whole notion of health and wellness. We have to get more efficient ... and can we do it with generics? Yes."
Read More Biotech: what went wrong?
"I tend not to like to own General Motors or Ford or Tesla. I like to own the parts companies. Genuine Parts has been a fantastic company. We've owned it for 40 years. If inflation picks up, they do well. If deflation continues as it is, they do well."
"I like everything that Musk is doing. I think he's very creative and God bless America for having more individuals like that. We should lower regulation, we should lower corporate tax rates and be competitive globally."
Details on Apple, Xylem, Legg Mason, T. Rowe Price and more, in the full interview at CNBC Pro.
(Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.)