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Value investor Mario Gabelli shares his top stock picks and looks ahead to the market's future

Gabelli's top stock picks

Mario Gabelli, chairman and CEO of GAMCO Investors, joined CNBC's "Halftime Report" on Wednesday to share his thoughts on the market and his top stock picks.

Gabelli said Sony is in the middle of a turnaround with a new CEO and CFO, but looks promising in the entertainment world of content and creativity.

"When you think of artificial intelligence, robots, sensors for the Apple, sensors for the car, that electronics business is coming around," he said.

Regarding defense stocks, Gabelli said Northrop Grumman and Lockheed Martin are the ones that everyone looks at, but said he's watching Harris Corp in Melbourne, Florida and Textron. He said he's expecting the entire defense ecosystem to do well.

He also sees an opportunity for equipment rental companies like United Rentals and Herc Holdings to take advantage of future investments in infrastructure repair.

In the consumer landscape, Gabelli also owns shares of Florida—based National Beverage, which he says capitalized on a "strong tailwind of organic, natural and biotic free" drinks. He added that the carbonated soft drinks industry is worth $75 billion and that he sees great potential in the company.

On casinos, Gabelli, who was in the audience for the third presidential debate, said Las Vegas is "booming." He owns MGM and Wynn and said they are several other attractive options in the industry.

When asked about the debate between "active versus passive" investing, Gabelli joked that stock-picking is dead, saying passive investing is for "mindless investors."

"How can you be up in a down market by [owning] an ETF?," he asked.