Billionaire Mario Gabelli singles out one sector that will get a Trump bump

Gabelli's Trump trades: Bet on infrastructure stocks

Billionaire value investor Mario Gabelli told CNBC on Friday he sees infrastructure stocks doing well under a Donald Trump administration, because the president-elect has promised to spend billions on fixing the nation's roads, bridges, and airports.

Gabelli cited in particular two stocks he owns that he believes will benefit from a burst of infrastructure spending: Vulcan Materials, a $19 billion market cap producer of crushed stone, sand and gravel for construction; and Gibraltar Industries, a $1.4 billion maker of building products.

In a "Squawk Box" interview, Gabellil said he had predicted a Trump victory. He said he was "reading tea leaves of the disgruntled part of America that hated politicians."

The uncertainty over who would be elected president, which held back "consumer and Corporate America in terms of making investments," has now been removed, said the chairman and CEO of Gamco Investors, which has nearly $40 billion in assets under management.

"Now we can start planning and looking at where should we put our money," he said. "Innovation comes back. Risk-taking comes back."

With Republicans winning the White House and maintaining control on Capitol Hill, Gabelli sees corporate tax reform getting done.

He also expressed confidence in House Speaker Paul Ryan's ability to help Trump boost economic growth. "Ryan has finger on the pulse," he said.

While the stock market ended up rallying on Wednesday after Trump's victory, Dow futures were more than 800 points lower just after midnight, as the election was swinging in Trump's favor.

Gabelli said that happened as many overseas traders in the premarket were selling because "they were probably uncomfortable" with the idea of Trump as president.

Optimism over Trump's presidency spilled into a second day on Wall Street, with the Dow Jones industrial average closing at an all-time high on Thursday. Ahead of Friday trading, The S&P 500 was just about 1 percent away from a record, but the three major indexes were pointing to a lower open.

Gabelli said Trump's win reinforced an up trend in the stock market that was already in place on the prospect for stronger earnings next year.

Another billionaire investor, Stanley Druckenmiller, told "Squawk Box" on Thursday he's "quite, quite optimistic" about the U.S. economy following the election of Trump.

The founder and former chairman of Duquesne Capital said he's betting on growth by shorting bonds globally. He said he likes stocks that respond to growth, and the prospects for the dollar, especially against the euro.

"I sold all my gold on the night of the election," Druckenmiller said, who had been in the past rather negative on the economy and the stock market.

As for Thursday's close, the Dow and S&P were riding four-day win streaks, up about 5 percent and 4 percent on the week, respectively. The Nasdaq composite, which closed lower during Thursday's rally as tech stocks struggled, was up 3.2 percent for the week.

Sign Up for Our Newsletter Morning Squawk

CNBC's before the bell news roundup
Get this delivered to your inbox, and more info about about our products and services.
By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.