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VIEWS: 7 PAGES: 32

									                                   The Gabelli Value Fund Inc.
                                                 Shareholder Commentary
                                                    December 31, 2003




To Our Shareholders,
     After three years of nothing but coal in their stockings, equity investors enjoyed a bountiful Christmas in
2003. Small cap, mid-cap and technology sector investors received the biggest gifts, with the Russell 2000,
Russell Mid-Cap and Nasdaq Composite Indices gaining 47.3%, 40.1%, and 50.0% respectively during 2003,
versus the Standard & Poor’s (“S&P”) 500 Index’s 28.7% advance. We are pleased to report that the
Gabelli Value Fund’s (the “Fund”) portfolio surpassed our long-term goal of ten percent plus inflation, rising
31.9% in 2003.

Comparative Results

                                      Average Annual Returns through December 31, 2003 (a)
                                                                                                                          Since
                                                             Quarter   1 Year    3 Year      5 Year      10 Year       Inception (b)
 Gabelli Value Fund Class A . . . . . . . . . . . .          14.54%    31.87%    5.32%       7.27%       13.20%          13.43%
 S&P 500 Index . . . . . . . . . . . . . . . . . . . . . .   12.17%    28.67%   (4.05)%      (0.57)%     11.06%          10.89%
 Dow Jones Industrial Average . . . . . . . . . . .          13.33%    28.27%    1.01%        4.57%      13.09%          12.68%
 Nasdaq Composite Index . . . . . . . . . . . . . .          12.11%    50.01%   (6.75)%      (1.79)%      9.94%          10.66%
 (a) Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes
     in share price and reinvestment of dividends and are net of expenses. Investment returns and the principal value of an investment
     will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. The Dow Jones Industrial
     Average is an unmanaged index of 30 large industrial stocks. The S&P 500 Index and the Nasdaq Composite Index are unmanaged
     indicators of stock market performance. Dividends are considered reinvested (except for the Nasdaq Composite Index).
     Performance for periods less than one year is not annualized.
 (b) From commencement of investment operations on September 29, 1989.




 We have separated the portfolio manager’s commentary from the financial statements and investment
 portfolio due to new corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We
 have done this to ensure that the content of the portfolio manager’s commentary is unrestricted. The financial
 statements and investment portfolio are mailed separately. Both the commentary and the financial
 statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds.
INVESTMENT RESULTS (CLASS A SHARES) (a)

                                                                                                   — — — — – – – –Quarter – – – – – — — — —
                                                                                                                  –––—
                                                                                                  — — — — —––––––– —––––— — — —
                                                                                                   1st     2nd              3rd          4th                  Year
  2003: Net Asset Value               .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $13.22  $15.56          $15.90       $17.97               $17.97
        Total Return . .          .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    (4.3)%  17.7%             2.2%       14.5%                31.9%
  2002: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $16.97  $14.43          $12.32       $13.81               $13.81
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     3.3%  (15.0)%         (14.6)%       12.1%               (16.0)%
  2001: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $16.24  $17.63          $15.06       $16.43               $16.43
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    (0.7)%   8.6%          (14.6)%       12.9%                 5.4%
  2000: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $18.70  $18.89          $18.44       $16.13               $16.13
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    (3.9)%   1.0%            (2.4)%      (2.8)%               (7.9)%
  1999: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $17.29  $19.58          $18.93       $19.45               $19.45
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     7.5%   13.2%            (3.3)%      12.1%                31.9%
  1998: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $16.43  $16.94          $14.71       $16.08               $16.08
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    14.9%    3.1%          (13.2)%       19.8%                23.2%
  1997: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $11.63  $14.11          $15.73       $14.30               $14.30
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     1.0%   21.3%           11.5%         8.6%                48.2%
  1996: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $12.88  $13.08          $12.63       $11.52               $11.52
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    10.9%    1.6%            (3.4)%       0.0%                 8.7%
  1995: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $11.41  $11.75          $12.81       $11.61               $11.61
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     8.8%    3.0%             9.0%        0.3%                22.5%
  1994: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $11.37  $11.55          $12.43       $10.49               $10.49
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    (6.0)%   1.6%             7.6%       (2.7)%                0.0%
  1993: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $11.15  $11.93          $13.92       $12.09               $12.09
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    10.1%    7.0%           16.7%         1.5%                39.4%
  1992: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   $10.40   $9.84          $10.04       $10.13               $10.13
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     9.7%   (5.4)%            2.0%        6.4%                12.7%
  1991: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    $9.51   $9.50           $9.57        $9.48                $9.48
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    11.8%   (0.1)%            0.7%        2.5%                15.3%
  1990: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    $9.23   $9.36           $8.19        $8.51                $8.51
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .    (2.4)%   1.4%          (12.5)%        9.0%                (5.6)%
  1989: Net Asset Value           .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     —        —               —          $9.58                $9.58
        Total Return . . .        .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .     —        —               —           2.1%(b)              2.1%(b)
                                                                                                                                  Dividend History
        Average Annual Returns December 31, 2003 (a)                                                          Payment (ex) Date   Rate Per Share     Reinvestment Price
                           Class A  Class B    Class C                                                        December 29, 2003        $0.241              $17.95
                                                                                                              December 31, 2001        $0.060              $16.43
                           Shares
                          ————       Shares
                                    ————       Shares
                                              ————                                                            December 27, 2001        $0.515              $16.51
   1 Year . . . . . . . . 31.87%    30.90%    30.95%                                                          December 27, 2000        $1.753              $15.77
                                                                                                              December 27, 1999        $1.720              $18.98
                          24.65%(c) 26.56%(d) 30.09%(d)                                                       December 28, 1998        $1.490              $15.54
                                                                                                              December 29, 1997        $2.720              $14.01
   5 Year . . . . . . . . 7.27%      6.64%     6.71%                                                          December 27, 1996        $1.110              $11.57
                           6.06%(c)  6.56%(d)  6.71%(d)                                                       December 27, 1995        $1.230              $11.56
                                                                                                              December 30, 1994        $1.600              $10.49
   10 Year . . . . . . . 13.20%     12.86%    12.90%                                                          December 31, 1993        $2.036              $12.09
                          12.56%(c) 12.86%(d) 12.90%(d)                                                       December 31, 1992        $0.553              $10.13
                                                                                                              December 31, 1991        $0.334              $ 9.48
   Life of Fund (b) . . 13.43%      13.19%    13.22%                                                          December 31, 1990        $0.420              $ 8.51
                                                                                                              March 19, 1990           $0.120              $ 9.21
                          12.98%(c) 13.19%(d) 13.22%(d)                                                       December 29, 1989        $0.068              $ 9.58
 (a) Total returns and average annual returns reflect changes in share price and reinvestment of dividends and are net of expenses for Class A
      Shares. The net asset value of the Fund is reduced on the ex-dividend (payment) date by the amount of the dividend paid. Of course, returns
      represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate.
      When shares are redeemed they may be worth more or less than their original cost.The Class A Shares’ net asset values are used to calculate
      performance for the periods prior to the issuance of Class B Shares and Class C Shares on March 15, 2000. The actual performance for the
      Class B Shares and Class C Shares would have been lower due to the additional expenses associated with these classes of shares.
 (b) From commencement of investment operations on September 29, 1989.
 (c) Includes the effect of the maximum 5.5% sales charge at beginning of period.
 (d) Includes the effect of the applicable contingent deferred sales charge at the end of the period shown for Class B and Class C Shares, respectively.
                                                                                                        2
Barron’s 2004 Roundtable
     Mario Gabelli, our Chief Investment Officer, has appeared in the prestigious Barron’s Roundtable
discussion annually since 1980. Many of our readers enjoyed the inclusion of selected and edited comments
from Barron’s Roundtable in previous reports to shareholders. As is our custom, we are including selected
comments of Mario Gabelli from Barron’s 2004 Roundtable.


                                                                BARRON’S

                                                         ROUNDTABLE
                                                                   MARIO GABELLI
                                                          Chairman and Chief Investment Officer
                                                              Gabelli Asset Management Inc.




        The Smart Set
       From TIPS to nail polish, four market seers share their best investments
       HEY CAME FROM far and near. Mark                In addition to the big themes, this week’s Part II,   enlightened monetary policy. Now we need

 T     Faber from Buenos Aires. Abby Cohen from
       around the corner. But where they’re going –
 and more important, where stocks, bonds and the
                                                       concludes with the words – and acts – of Mario
                                                       Gabelli. No one knows media better than Mario,
                                                       and no one seems to enjoy the show more. Eclectic
                                                                                                             reforms in energy, utilities, telecom, television
                                                                                                             and tort law. All of this sets the tone for a slight-
                                                                                                             ly up market for the year. The first half is strong.
 U.S. economy are headed in 2004 – was all that        as always, his latest picks range from TV broad-      Then we worry about ’05.
 mattered Jan. 12, when the 36th annual Barron’s       casters to auto-parts makers, air conditioners and,   Q: So, how about some investment ideas?
 Roundtable convened in lower Manhattan.               ahem, nail polish. Then there’s the skeleton he
                                                       brought to the fest. Curious? Please read on.         Gabelli: This is a year in which everything
 You can learn a lot, as Barron’s editors did, when                                                          works for television broadcasters. Advertising is
 you sequester 11 of the smartest investment pros                                   – Lauren R. Rublin
                                                                                                             a $500 billion industry. The television portion of
 on the planet for an entire day, plying them with     Barron’s: Mario moves a large black plastic bag       the media pie should be up sharply, because of
 questions and, later, caffeine. We learned that       from a nearby counter to the table.                   the election and the Olympics. A rising inflation
 most expect the good times to roll on for the stock                                                         rate is good for nominal growth in advertising,
 market and the economy, at least until Nov. 2,        Q: Are you going to take that thing out of the bag?
                                                                                                             too. From a TV point of view, the regulatory
 when President Bush most likely secures his next      Mario Gabelli: Be patient. It’s a cousin of           environment was very muddy last year. We had a
 term in office. Later, however, the piper will have   someone who was impatient. First, let me recap        green light, red light, green light and red light,
 to be paid – for the too-easy money, towering         what I said earlier today: The economy should         and now it’s amber. Come the end of January,
 deficits and slap-happy speculation of the past       be up 4% in ’04 as exports pick up, inventory is      Congress hopefully will embed in the system a
 year. Put another way, the chickens will come         rebuilt and capital spending is fueled by rising      39% cap on the percentage of the national popu-
 home to roost, perhaps on the White House lawn        business confidence. Earnings should rise             lation that a TV operator can own. Another rule
 (though some might stay at the Greenspans’).          sharply because of productivity gains and the         working its way through the courts in
 This year’s Roundtable brought much talk of           effect of the strong euro on reported earnings.       Philadelphia deals with cross-ownership of
 China, the newest cause of deflation, inflation       Interest rates should move up to 2% on the short      media properties and duopolies. We should have
 and all-round fascination. It also brought us a       end and 5% on 10-year Treasuries, which pre-          a green light for acquisitions come February.
 new face – that of Bill Gross, founder and chief      sents a headwind. I want to focus on exports to       There is some merger potential in TV stations,
 investment officer of Pimco and the world’s wis-      China, commodities and old age, but we’ll also        after a dry spell.
 est man on bonds. Bill is not merely a scholar but    need to watch the five Ds – the dollar, deficits,
                                                       dividends, deals and Dean. [After the                 I’ll give you a bunch of names of station operators
 a gentleman (he laughed at Mario’s jokes). He                                                               – Young Broadcasting, Fisher Comm-
 also doesn’t mince his words, which are as chilly     Democrats’ Iowa caucus Tuesday, more eyes are
                                                       likely to be on Massachusetts Sen. John Kerry         unications, Liberty Corp., LIN TV, Gray
 as a New York winter. In short, he reminds us                                                               Television, Sinclair Broadcast Group,
 that when interest rates hit bottom, there’s only     than former Vermont Gov. Howard Dean.]
                                                       Powerful fiscal stimulus has been added to            Paxson Communications and Granite
 one direction: up.

                                                                               3
Broadcasting – but I’ll focus on            company has world-class proper-                 should generate revenue of $800               Mario Gabelli’s Pick’s
two. Young has 20 million shares out-       ties. It has duopolies in New York,             million in 2004, which could grow
standing and a market value of $380         Chicago and L.A., and is rebalancing            to almost $1 billion by 2006. The          Company              Ticker   Price 1/9

million. It’s got $725 million of debt      its portfolio by adding more TV sta-            hospice market is growing 20% a            Young Broadcasting YBTVA $19.79
less $110 million of cash. Vincent          tions. Gannett already has said that as         year, driven by a better understand-       Liberty              LC   47.17
Young sold the company’s Los                soon as the rules flash green, it will go       ing of its impact. It is becoming          Tribune             TRB   51.24
Angeles TV station and made a lot of        out and buy. They have their sights on          more accepted by medical practi-           Roto-Rooter         RRR   56.71
money. He bought a station in San           Knight-Ridder or Pulitzer.                      tioners. I think Roto-Rooter will          Sybron Dental Spec   SYD       29.33
Francisco and is going to lose a lot,       Hopefully, they will buy Media                  keep its other businesses but change       Del Laboratories     DLI       26.94
but will declare victory and sell it at a   General. I’m not recommending the               its name to Vitas. Thus, two compa-        Fedders              FJC        7.40
big discount. He paid about $750            stock, just mentioning it.                      nies in one. We look for this sort of      Dana                 DCN       19.50
million for KRON and should sell it                                                         transforming transaction.
                                            Now, let me give you a concept. I                                                          Vivendi               V        26.02
for about $400 million. After taking a
                                            started my career as an auto-parts              Meryl Witmer: How does a hos-
tax loss, he’ll get $500 million. You                                                                                                 They have a modest amount of debt.
                                            analyst. There are 600 million cars             pice make money?
wind up with a company with very                                                                                                      They should have $18 a share in
                                            on the road worldwide, and we man-
little debt and a wonderful array of                                                        Gabelli: They charge about $125 a         cash in about five years. Short term,
                                            ufacture 50 million new ones every
TV stations that should generate                                                            day. The average patient uses a hos-      the stock has been hit by the FDA’s
                                            year. Then I migrated to airline parts.
close to $70 million of broadcast                                                           pice for 50 days. The hospice pro-        rejection of silicone-gel breast
                                            There are 12,000 aircraft worldwide,
cash flow.                                                                                  vides home care. Medicare pays            implants. It has created an interest-
                                            and we make 1,000 every year. Now
Q: And your second name?                                                                    about 81% industrywide, but in Vitas’     ing buying opportunity.
                                            we’re migrating to body parts. [Rolls
                                                                                            case, it’s lower. There are about 2,300
Gabelli: Liberty, based in                  down the black plastic to reveal...a                                                      Now, back to teeth. I mentioned the
                                                                                            certified hospices in the U.S., with
Greenville, S.C., is a more conserv-        model of a skeleton!]                                                                     dental suppliers in last year’s
                                                                                            about 500,000 patients. Roto-Rooter
ative play. It, too, has 19 million         Art Samberg: I don’t want to see                can earn about $4 a year, assuming it     Midyear Roundtable (“Happy
shares but sells for 47. That’s $900        this.                                           doesn’t do any spinoffs, and Vitas        Daze,” June 23, 2003), and I am
million in market value. The com-                                                           keeps growing by 20%.                     buying them all. The list includes
pany has about $80 million in cash          Gabelli: There are almost 300 mil-                                                        distributors Henry Schein and
and $50 million of other assets.            lion people in the U.S. As they get             Next, obesity. For whatever reason,       Patterson Dental and manufac-
Broadcast cash flow in 2004 will be         older, they’re keeping their natural            some people in the U.S. are obese.        turers Dentsply International,
approximately $95 million. Based            teeth longer. There are 32 teeth per            There are several ways to reduce          Young Innovations and Sybron
on possible transactions, Liberty           mouth, which means a market of                  obesity, other than through self-dis-     Dental Specialties. In the
has a takeout value of $70 a share.         9.6 billion teeth. As you keep your             cipline. One is the gastric intestinal    implant area there are Nobel
The company has been buying back            teeth, you spend more money per                 bypass, which makes use of a              Biocare, Lifecore Biomedical
stock. It has eight NBC, two CBS            natural tooth. There are fewer den-             laparoscopic band. Inamed –               and Straumann.
and five ABC stations. Liberty’s            tists. Therefore, dentists are making           IMDC – has three intriguing prod-
                                            more money. And orthodontists are               ucts, one of which is used to treat       Zulauf: These are really expensive
stations would appeal to other oper-                                                                                                  stocks.
ators if duopolies are permitted.           making a lot more. Twelve percent               obesity. There are 34.5 million
                                            of the U.S. population are over 65.             shares, and the stock sells for 43.       Gabelli: That’s why I’m giving
Fisher has two major-market TV              In 20 years that number climbs to               The current TV series Nip/Tuck is all     them honorable mention. My pick
stations, one in Seattle and one in         20%. By 2025 that will be 72 mil-               about plastic surgeons and cosmetic       is Sybron. Now, I have 10 fingers.
Portland, Ore. They put themselves          lion people. How do we make                     alterations. Queer Eye for the            That’s 10 opportunities. But I also
up for sale. The stock is around $50.       money from the aging population?                Straight Guy is about fashion             have 10 toes. If you listen to Queer
Major markets are hard to find. LIN                                                         makeovers. This is a social trend.        Eye, you could apply nail polish
TV is extraordinarily well run. It has      Samberg: Extractions.
                                                                                            Inamed makes a collagen filler for        once a week. [Points to a display of
50 million shares, and the stock is         Gabelli: Let’s start with Roto-                 the face. People use it. They feel        nail polishes on the table.] A num-
25. Hicks Muse owns a lot of stock          Rooter. When I recommended it                   happy and healthy. Collagen is an         ber of U.S. companies could benefit
and will sell it off in the next couple     two years ago, everyone started                 $80 million business going to $130        from this trend.
of years. The company is likely to          singing the jingle. The stock was 30-           million. Inamed also makes breast
have $175 million in 2004 broadcast         35, with 10 million shares. It used to          enhancements. Even without FDA            Samberg: Are you about to rec-
cash flow, so it’s selling for about 10     be called Chemed. Roto-Rooter has               [Food and Drug Administration]            ommend Revlon?
times broadcast cash flow.                  an investment in a company called               approval for new products, this busi-     Gabelli: One product that intrigues
Q: Won’t the sales pressure the             Vitas, the largest hospice company              ness is growing to $320 million from      me is Sally Hansen Hard as Nails.
stock?                                      in the U.S. The average hospice                 $180 million because the company          [Tosses a bottle at Meryl]. It is
                                            patient is 75 years old. The market is          sells around the world. The third         made by Del Laboratories,
Gabelli: So what? The intrinsic             growing substantially. Odyssey                  business is the obesity band; sales       which has 9.7 million shares. The
value of the enterprise is growing. If      HealthCare contemplated a bid                   are going from $60 million to $300        stock is 26, and the company has a
they allow you to buy stock cheap-          for Vitas, but Roto-Rooter instead is           million. In all, the company is grow-     $270 million market capitalization.
er, you should be happy.                    buying the two-thirds of Vitas it               ing revenue by 17% and earnings by        Ebitda for 2004 is about $50 mil-
Now, a quick comment on Tribune. I          doesn’t own. They announced a deal              22% a year, even without the benefit      lion. Some of its products are worth
like Dennis FitzSimons, the new             two weeks ago, and the stock went               of a new type of breast implant.          its entire market value. Del Labs
chairman and CEO. The stock sells           from 37 to 57. Until Jan. 24, some-                                                       makes Orajel, for tooth and gum
                                            one can top them. Here’s what hap-              Schafer: What are the numbers?
for 50; there are 350 million shares,                                                                                                 problems. Then there’s a new prod-
and $17.8 billion of market value.          pens after: Roto-Rooter will pay                Gabelli: For ’04 Inamed may earn          uct even Women’s Wear Daily got
Earnings will be $2.40 a share this         $310 million and absorb $75 million             about $2 a share, growing to $2.60        excited about. It’s called Airbrush
year, climbing to $3.25 in ’06. The         of debt. Pro forma, the company                 and then $4.50. Cash flow is strong.      Legs. There is a trend away from


                                                                                        4
pantyhose. This is a spray-on leg              ment to the U.S. They have distribu-            Gabelli: You know it’s a no. It has-          it a currency to pay off Comcast
make-up, which comes in four                   tion. Prices, as noted, are stabilizing.        n’t been resolved. Just a kind word           and buy Cablevision.
shades – light glow, medium glow,              It might be worth a fresh look.                 for another old friend: Jean-Rene             Q: Does the Dolan family finally
tan glow and deep glow.                                                                        Fourtou, who took over Vivendi                want to sell?
                                               My next pick is Dana, the auto-                 Universal, has done a fabulous
Q: Suppose you don’t want to glow.             parts maker. The stock trades for               job. Vivendi has 1.1 billion shares.          Gabelli: They have announced
Gabelli: Don’t ask me anything.                191/2-20, and there are 150 million             The stock trades for 26. They have            publicly that they’re going to pack-
There is only so far I’ll go. A can            shares outstanding. The company                 merged most of their U.S. entertain-          age their satellite assets and cable
costs $9.95. It will be available this         was highly leveraged and got                    ment business into NBC, which is              networks and spin them off to
spring. Next, I’ve got a company               caught in the downside of the auto              packaging Vivendi’s products, the             shareholders in the next 90 days.
that relocated all its plants from the         cycle. ArvinMeritor launched a                  old Universal Studios and MCA.                That’s worth $10 a share, marked to
U.S. to China. It now has a relation-          hostile bid. Dana stood its ground              They gave Vivendi $4 billion in               model. That leaves the cable busi-
ship with a Home Depot-style                   and ArvinMeritor went away, but                 cash and 20% of the new NBC.                  ness. [Cablevision Chairman
store in China. It is going to sell            the attack changed its culture. The             Whether General             Electric          Charles] Dolan has said: “We’re
products not only in the U.S. but in           company is selling its aftermarket              decides with [NBC head] Bob                   extraordinarily valuable. If some-
China, Indonesia and India. The                business. Goldman is handling the               Wright to take it public or not, I            body comes to make love, they
product is an air conditioner, and             auction. The first round of bids is             can’t say. But it’s a very good busi-         should bring more than a dozen
the company is Fedders. The                    due any week. I think they can get              ness. The combined network, NBC               roses.” But given his passion for the
stock is $7. There are 30 million              $1.2 billion-$1.5 billion for the               stations and Universal Studios                New York Knicks and Rangers, I
shares and $150 million of debt.               business, which has some wonder-                could do $15 billion of revenues              can’t believe he would sell without
                                               ful parts. On a pro forma basis,                over the next three or four years and         spinning off Madison Square
In the U.S., the window-air-condi-             assuming the sale, they should have
tioning market is $4 billion.                                                                  close to $4 billion of Ebitda. When           Garden.
                                               $8 billion in revenue this year and             the dust settles, they’ll own 56% of
Fedders has 20% or 25% of that.                earn more than $2 a share. They                                                               Faber: Mario, what do you think of
The industry has seen price defla-                                                             a wonderful telephone business in             digital radio?
                                               should have about $700 million of               France called SFR. Vodafone
tion for five years, though pricing            debt. Over the next four years earn-
has stabilized. The company is                                                                 owns 44% and wants to buy the bal-            Gabelli: It makes a lot of sense,
                                               ings should march upward, to                    ance. SFR could do about €3 bil-              particularly if you can take it out of
going into the central-air business,           around $4 a share, and cash flow
which is a $9 billion market. People                                                           lion this year and be worth eight             your car and put it in a boom box.
                                               should be more than $1 billion.                 times Ebitda. Monaco Telecom
in the trade think they have a good            Dana generates revenues of about                                                              Samberg: Are you short any radio
product. But the big play is selling                                                           and Maroc Telecom are worth                   stocks?
                                               $400 million a year on heavy-duty               another couple of billion. Canal
air-conditioning in China and other            trucks. They make engine products.
Asian countries. Fedders is partner-                                                           Plus is a wonderful business. This            Gabelli: I am not long, because
                                               This is a large original-equipment              is a great way to play the strength of        valuations reflect their underlying
ing with everyone in China. The                company where earnings are turn-
company is expected to earn 30                                                                 the euro.                                     potential. But it’s a good question.
                                               ing around.                                                                                   If a technology comes along and
cents a share in 2004.                                                                         I’m also throwing in a kind word
                                               John Neff: Has Dana’s asbestos                                                                fragments the existing base of an
Faber: There is tremendous over-                                                               for Time Warner. [CEO Richard]                industry, costs rise dramatically. It’s
                                               problem been taken care of?                     Parsons is doing a terrific job. The
capacity in the appliance field in                                                                                                           an overhang on Viacom and Clear
China. There are at least 50 bigger            Gabelli: If you want to create jobs,            stock is 18. Comcast owns 22%                 Channel. Next year I’ll bring in a
companies that will eat them alive.            you have to come to grips with tort             of the cable operation. As it                 boom box.
                                               reform.                                         deleverages, Time Warner may
Gabelli: Fedders makes two mil-                                                                spin off or create an IPO for its             Q: We can’t wait. Thank you,
lion window units a year for ship-             Schafer: Is that a yes or a no?                 cable businesses. This would give             Mario. I
Mario J. Gabelli is the Chairman and Chief Investment Officer of Gabelli Asset Management Inc. and Portfolio Manager of The Gabelli Value Fund. The securities mentioned in the article
are not representative of the entire portfolio, and are subject to change at any time. Securities representing over 2% of Gabelli Value Fund’s portfolio as of 12/31/03 are as follows:
Viacom Inc. 8.41% (net of short position in Class B stock); Media General Inc. 6.89%; Cablevision Systems Corp. 4.94%; Liberty Corp. 2.47%. Securities representing less than 2% of the
Gabelli Value Fund’s portfolio as of 12/31/03 are as follows: Time Warner Inc. 1.81%; Dana Corp. 1.58%; Vivendi Universal 1.51%; Tribune Co. 1.28%; Comcast Corp. 1.27%; Sybron
Dental Specialties Inc. 0.38%; Gray Television Inc. 0.22%; Paxson Communications Corp. 0.10%; Young Broadcasting Inc. 0.09%. Companies mentioned in the article, but not listed here,
are not holdings of the Gabelli Value Fund as of 12/31/03.
A complete listing of the Fund’s holdings as of 12/31/03 is available by calling the distributor, Gabelli & Company, Inc., at 800-GABELLI (800-422-3554) or by visiting our website at
www.gabelli.com. This information is not authorized for distribution unless preceded or accompanied by a current prospectus. The prospectus contains more complete information, including
fees and expenses. Read it carefully before investing.
The views expressed in this article reflect those of the portfolio manager only through 1/10/04. Minor edits were made. The manager’s views are subject to change at any time based on
market and other conditions. Favorable earnings or EBITDA (Earning before Interest, Taxes, Depreciation and Amortization) growth prospects do not necessarily translate into higher stock
prices, but they do express a positive trend which we believe will develop over time.
                                                      For a prospectus and more information, visit our website at:

                                                    www.gabelli.com                    or call:

                                                    800-GABELLI
                                            800-422-3554 G 914-921-5100 G Fax: 914-921-5118 G info@gabelli.com
                                      Distributed by Gabelli & Company, Inc. One Corporate Center, Rye, New York 10580

                                                                                           5
COMMENTARY
The Year in Review
     In early 2003, as it became clear that war with Iraq was inevitable, consumer and business confidence
plummeted, the economy stalled and the market declined sharply. Although Federal Reserve Board (“Fed”)
Chairman Alan Greenspan assured Congress and the American people that uncertainty regarding Iraq was the
only remaining obstacle to a more vigorous recovery, some Wall Street economists were warning that the
economy was in danger of sliding back into recession. President Bush had his agenda for a massive fiscal
stimulation ready to put Greenspan’s monetary policy into action in order to boost the economy.
      Following the swift military victory in Iraq, stocks rallied as President Bush’s ability to push his economic
agenda through Congress came into focus. Consumer confidence rebounded in the second quarter and the
“something for everyone” Bush tax cuts gave consumers more money to spend. Business investment and
capital spending were aided by passage of Section 168 and 179 of the Internal Revenue Code, and the lower
tax rate on dividends and capital gains rekindled investor confidence in the equity market. The lack of new job
growth was the only troubling aspect of the then nascent economic rebound.
     More encouraging economic data, including upward revisions in second quarter Gross Domestic Product
(“GDP”), preliminary estimates of impressive third quarter GDP growth, better than anticipated second quarter
corporate earnings and, perhaps most importantly, news on the employment front sparked a strong third
quarter market rally that continued through October. Discouraging news from Iraq tempered investor optimism
in November and market momentum slowed. However, the capture of Saddam Hussein in December helped
boost the market again and stocks closed the year strong.

The Year Ahead: The Good News
       Will 2003’s Merry Christmas be followed by a Happy New Year in 2004? We think so. Despite robust third
and fourth quarter GDP growth, inflation is dormant and the Fed has made it clear that as long as inflation
remains subdued, it will keep a lid on short-term interest rates. Inventories are still low, indicating industrial
production will continue to trend higher. Exports will be helped by a weaker dollar and the expansion in Europe,
Japan and China. Consumer confidence remains strong and consumers will receive another bonus when they
file tax returns this spring and from the sharp increase in their holdings of real estate and financial assets.
      Although we expect GDP growth to slow from the unsustainable pace during the second half of 2003, we
believe corporate earnings growth will accelerate. Cost cutting and productivity gains in recent years have
created enormous operating leverage, which we believe will translate into an earnings bonanza in 2004.
Although quarterly earnings comparisons will become more difficult as the year progresses, we expect many
companies to continue to meet or beat consensus earnings estimates.
      The stock market should continue to benefit from the reduction in the tax rate on long-term capital gains
and on dividends, which is encouraging companies to increase their payouts. With historically low bond yields,
dividend-paying equities will likely win over more tax sensitive fixed income investors as well as provide a rising
pari passu yield floor under equities.
      Today’s market skeptics believe that most, if not all, of this potentially good earnings news is already
baked into stock prices. We agree that the market has discounted much of the good news. We also observe
that the market will look forward into 2005 around mid-year and start discounting any measures that U.S.
policymakers may implement to correct any excesses that may be developing in the economic scene.


                                                        6
And, A Few Things To Worry About
    The wild cards in this rather rosy economic and market scenario are the “three Ds”: the deficit, both
domestic and international, the dollar, and the debt in the system.
      Oil remains above $30 per barrel, in part due to the slower than expected increase in production from
Iraq, but also because OPEC appears to have quietly raised their price target from the mid-$20 per barrel range
in order to compensate for the falling dollar. Vigorous demand from China is also a culprit. As we have
frequently pointed out over the last several years, expensive oil is a hidden tax on consumers and businesses.
     The dollar continues to weaken against the euro and yen. Thus far, the weaker dollar has helped the U.S.
economy. However, if the dollar were to skid sharply, dollar-denominated financial assets, most notably U.S.
Treasury bonds, would become less attractive to foreign investors, who over the last decade have financed
America’s rapidly expanding trade deficit. If a plunging dollar results in foreign capital demanding higher returns
from U.S. financial assets, it will put upward pressure on U.S. interest rates and restrain economic growth. At
the same time, we point out that both Japan and China have their own agenda for buying U.S. dollars.
      We have not had a terrorist act in America since 9/11. Hopefully, beefed up homeland security, the Bush
Administration’s resolve to fight terrorism on all fronts and the pressure we have put on our Arab allies to root
out terrorists in their own countries has disrupted the terrorists. Americans have learned to live with long lines
in airports and color-coded terrorist alerts. However, another major terrorist episode or a flare-up between
China over Taiwan, or again from North Korea, would have an impact on consumer and investor psychology.

Leading Laggards
       We see excellent value in lagging sectors such as industrials and media. Industrial companies are
especially “lean and mean”, with the kind of operating leverage that should translate into much better than
expected earnings growth in the year ahead. Media companies are also poised for big earnings gains propelled
by a significant increase in advertising spending in 2004. Political ad spending is expected to come in at over
$1 billion, eclipsing previous election year records and providing a real bonanza for television broadcasters.
Help wanted advertising, which was down 34% in 2001, 23% in 2002 and 12% in 2003, should recover as
companies staff-up to meet rising demand. This is good news for newspaper publishers whose profits have
been crimped from recent years’ decline in this high-margin advertising segment. Also, Congress will soon put
a partial stamp of approval on changes in Federal Communications Commission (“FCC”) regulations, notably
in the 39% cap on television station ownership. Therefore we expect deal activity, postponed due to the lack of
clarity on the regulatory front, to heat up in the year ahead. Big media conglomerates such as Time Warner,
Viacom and Tribune have been or are in the process of reducing debt and building war chests for acquisitions
in a variety of media businesses.

2004: The Year of the Deal - Doctor Love is Back!
     The acquisition by GE’s NBC of Vivendi’s Universal Studios and News Corp.’s purchase of control of
DirecTV will act as further catalysts to deals in the media and entertainment world. In recent years, we have
been accused (and justifiably so) of sounding like a broken record on the subject of increased merger and
acquisition activity. Let us explain why the increase in deal activity we have been anticipating has failed to
materialize. The fundamentals supporting increased deal activity — liquidity, low interest rates, “cheaper to buy
than build” public market valuations, the pressure to grow via acquisition in a slower growth economy and, of
course, FASB 142, which eliminated the need to amortize goodwill — have been in place for the last two years.

                                                        7
However, there have also been unforeseen circumstances that have restrained merger and acquisition activity.
9/11 initially and later, the wars in Afghanistan and Iraq created enough economic uncertainty to choke off deal
activity. The demise of “serial acquirers” such as WorldCom and Tyco put a bad light on growth via acquisition
strategies. The collapse of Enron made investors wary of leveraged companies and inspired corporate America
to put acquisitions on hold while they reduced debt and cleaned up balance sheets. Finally, regulatory
confusion in industries ripe for consolidation such as utilities and media postponed deal activity.
       Today, the aforementioned fundamentals supporting increased merger and acquisition activity remain
largely intact, and most, if not all, of the extraneous factors that have restrained deals have moderated. Despite
the challenges of Sarbanes-Oxley and the concern over corporate balance sheets, business confidence has
been restored and corporate CEOs are once again focused on growth. WorldCom and Tyco are no longer on
the front pages. Investors’ fear of leverage has diminished as corporate America has reduced debt. We are
finally seeing some regulatory clarity in the utilities and media industries.
      Indeed, merger and acquisition activity increased gradually in the second and third quarters of 2003 and
accelerated in the fourth quarter. We are even seeing the re-emergence of leveraged buyouts, most notably
the Blackstone Group’s pending acquisition of Celanese. Barring any unforeseen economic dislocation, we
believe 2004 will be The Year of the Deal and that some of the outstanding business bargains in our portfolio
will be targeted.




                      AT&T Wireless — U.S. Wireless Consolidation
 INTRODUCTION
       AT&T Wireless, based in Redmond, WA, provides wireless voice and data services to more than 21 million
 subscribers in markets with a total populations (“POPs”) of 250 million. The company has a 15% share of total U.S.
 wireless customers and is the second largest operator in the U.S. based on revenues. In recent months, the company
 has been the subject of takeover speculation that has intensified since mid-January, after a USA Today article reported
 that AWE was in merger discussions with Cingular Wireless. AWE management has confirmed it is exploring strategic
 alternatives including a merger and is in discussions with several parties.

 BACKGROUND
       The company was founded by wireless visionary Craig McCaw, who consolidated the U.S. wireless industry to create
 the national footprint of McCaw Cellular Communications. The company was sold to AT&T in 1994 for $11.5 billion. In May
 2000, AT&T created a tracking stock for AT&T Wireless in the largest IPO in U.S. history. In July 2001 AT&T Wireless
 became independent once again via spin-off, as part of a broad restructuring of AT&T. Prior to the spin-off, NTT DoCoMo
 (DCM - $22.90 - NYSE), a Japanese wireless company, became the largest shareholder owning 432.9 million shares of
 AWE or 16% of the company.
       AT&T Wireless currently operates a GSM based network, along with TDMA technology to provide wireless
 services. More than 70% of AWE’s total POPs are covered with 30MHz or more of spectrum. AWE has 30 MHz of
 spectrum or more in its top 20 markets, and 10 MHz of spectrum or more in the 1.9 GHz band, giving the company one
 of the best spectrum positions in the industry.




                                                           8
INDUSTRY OVERVIEW
      The global wireless industry can be characterized by an almost continuous consolidation of the industry. There
has been a dramatic slowdown corresponding to weak financial markets beginning in 2000, though a recovery appears
to have begun in 2003. Notwithstanding, the rationale for consolidation — to increase scale and expand geographies —
remains intact. Below we highlight a handful of the historically most acquisitive global wireless giants.

Company                Technology       Subs(a)        Footprint
Deutsche Telecom                GSM           66       Germany, U.K., U.S., Austria, Czech., Netherlands
France Telecom                  GSM           44       France, Netherlands U.K., Belgium, Romania, Slovakia, Rest of World
NTT DoCoMo                     CDMA           87       Japan, numerous partnerships worldwide
Singapore Telecom              CDMA           44       Singapore, Australia, India, Indonesia, Philippines, Thailand
Telefonica Moviles              GSM           48       Spain, Latin America
Vodafone                        GSM          130       33 countries including the U.K., Germany, Japan, U.S., Italy, Rest of World
(a) Subscribers in millions.

The U.S. Wireless Industry
      The U.S. remains one of a handful of wireless markets not dominated by global wireless operators. The most
important entry in the U.S. consists of DT’s acquisition of 100% of T-Mobile, and NTT DoCoMo’s purchase of a 16 percent
stake in AT&T Wireless. Vodafone also holds a 45% interest in Verizon Wireless resulting from the merger in 2000.
       In January 2003, the FCC eliminated spectrum caps (rules limiting the amount of spectrum a carrier could own in
a market) eliminating a significant barrier to further consolidation among U.S. industry operators. This rule change has
had little impact to date on consolidation activity in the U.S. due to weak financial markets.
      The table below highlights the six national wireless operators in the U.S., their technology and coverage capacity.
AT&T Wireless is the only independent carrier on the GSM standard (a technology with global roaming capability). The
industry structure of six or more competitors in the largest U.S. markets will continue to create pressure for consolidation.
Company                           POPs(a)                   Subscribers(a)                    Technology             Spectrum(b)
AT&T Wireless                            255                               21.9                     GSM                      30
Cingular Wireless                        236                               23.9                     GSM                      26
Nextel Communications                    200                               12.8                    ESMR                      NA
Sprint PCS                               210                               15.7                    CDMA                      26
T-Mobile                                 224                               12.9                     GSM                      23
Verizon Wireless                         257                               37.3                    CDMA                      26
(a) In millions.
(b) Weighted average.

NTT DoCoMo Investment in AT&T Wireless
       On January 22, 2001, NTT DoCoMo paid $9.8 billion for 406 million AWE shares, warrants and anti-dilution rights to
retain its 16% stake, with a standstill agreement preventing NTT DoCoMo from increasing its stake until 2006.The companies
also formed a strategic alliance to develop advanced mobile and multi-media services running over next generation high-
speed networks. This year, AT&T Wireless will meet its requirement to roll out UMTS wireless technology (which promises
to offer much higher speed over wireless networks) in four cities by December 31, 2004 that would otherwise trigger a put
option held by DoCoMo on its original investment at cost. The table below summarizes the history of NTT DoCoMo’s
purchase of 432.9 million AWE shares.
                                                               Price per             Total           % of
DoCoMo Ownership                      Date     Shares(a)          Share           Amount(a)     AWE Equity   Notes
                            January 2001         228.1           $27.00            6,158.7                   Primary Shares
                            January 2001         178.1            20.50            3,651.1                   Existing Shares Held by AT&T
                          February 2002           26.7            14.28              381.7                   Exercise Anti-dilution Rights
Current DoCoMo ownership                         432.9            23.54           10,191.5          16.0%
Plus warrants to acquire                          41.0            35.00            1,435.0
Total Fully Diluted Ownership in AWE             473.9                                              17.2%
(a) In millions.

                                                                     9
Vodafone’s U.S. Footprint
      Verizon Wireless was created in April 2000 through the combination of Bell Atlantic and Vodafone’s U.S. mobile
assets. GTE’s mobile properties were subsequently added following Verizon’s subsequent merger with GTE. Today,
Vodafone has a 45% interest in Verizon Wireless, while Verizon Communications holds the controlling 55% stake. Vodafone
has put options to sell up to $20 billion of its stake back to Verizon or Verizon Wireless at fair market value between 2003
and 2007. Vodafone is unlikely to gain control of this asset and therefore is likely to eventually exit in exchange for a
controlling stake in an alternative wireless carrier.

FINANCIAL OVERVIEW
      AT&T Wireless has one of the strongest balance sheets in the wireless industry with $6 billion net debt versus
$4.3 billion of EBITDA. It also has the capacity to generate significant amounts of incremental cash after turning cash
flow positive in 2003 and generating $1.3 billion in free cash flow, and has $1.8 billion in Net Operating Losses (NOL)
available to shelter taxes in 2004. The table below provides a snapshot of AT&T Wireless including 2004 which reflects
a loose extrapolation based on management’s outlook for mid-single digit revenue growth, slightly higher EBITDA
growth, and flat capital expenditures.

(in millions)                                                  2002A                  2003A                     2004E(1)
Revenue                                                        $15,631                $16,533                   $17,304
EBITDA                                                            3,837                 4,394                     4,861
Free Cash flow                                                  (2,710)                 1,029                     1,250
Net Debt                                                          8,855                 6,095                     5,000
(1) Based on management’s outlook disclosed with fourth quarter results, January 26, 2004.

VALUATION
       While this is not the forum to provide valuation data for our portfolio companies, we provide you with a table
summarizing multiples realized in several of the most visible acquisitions in recent years. We recognize that the values
realized reflect different investment environments and sentiment. Nevertheless, an extrapolation of valuation data by
applying similar multiples to AWE, adjusting for claims of debt holders, and dividing by shares outstanding illustrates
interesting valuation contrast between public and potential private market valuations.

Acquirer                       Target          Completed              TEV(a)      TEV/POP          TEV/Sub          TEV/EBITDA
Deutsche Telecom          Voicestream          June 6, 2001         $60,166              $366          $6,600                n/m
Vodafone                  AirTouch plc        June 30, 1999          59,000               465           4,200               18.0x
Vodafone                  Mannesman           April 12, 2000         67,300               n/a             n/a                 n/a
n/m = not meaningful; (a) Total Enterprise Value = total equity market value + financial debt at book value. In millions.

CONCLUSION
      There are a number of potentially interested buyers of AT&T Wireless. Although the difficult fiscal environment many
telecoms faced only two or three years ago may cause hesitation by some to enter into bidding for a large telecom
operator, we believe the concern over losing a scarce resource will overcome those fears. These factors seem most
important for Cingular Wireless and Vodafone plc. While we are generally neutral on the outcome of the AT&T Wireless
auction, we recognize that an outcome that eliminates a competitor will have the best result for the industry. This seems
to be the case if Cingular Wireless acquires AT&T Wireless. Nevertheless, other possibilities are likely to be followed by
further consolidation, which would have similar results in consolidating the industry.




                                                                   10
Mutual Funds — In Focus
      The mutual fund industry has come under fire by New York Attorney General Elliot Spitzer, and the
Securities and Exchange Commission (“SEC”) is now also involved in the investigation of improprieties in the
business. Thus far, the investigators have uncovered some serious offenses including illegal after-hours pricing
arrangements with privileged clients, “front running” by mutual fund portfolio managers, and turning a blind eye
toward excessive market timing when fund prospectuses did not permit or limited such activity. As the
investigations continue, more abuses will be uncovered and more crooks will be caught. We hope those
involved in illegal late trading are prosecuted to the full extent of the law.
      Unfortunately, however, the highly publicized crimes of a few are tarnishing the image of an entire industry
that for more than sixty years has served the interests of small investors. Today’s headlines about mutual fund
improprieties are similar to the front-page news surrounding the scandals at Enron, Tyco and WorldCom, which
inspired many to question the integrity of corporate America. Two years later, most everyone recognizes that a
few bad apples had not poisoned the corporate barrel. We are confident that after investigations of the mutual
fund industry are concluded, mutual fund investors will come to the same conclusion.

Operation Fish Bowl
     We need to provide mutual fund shareholders with more visibility on such items as:
        - Asset Turnover and Commissions
        - Total Fees and Expenses
        - Who is running the Fund
        - How much do portfolio managers earn from running the Fund
        - How does the Fund vote your shares
        - What about 12b-1 fees
        - Soft Dollars
        - Fair Value Pricing
        - Redemption Fees for short-term trading of Fund Shares
     We will address each of these issues in our upcoming quarterly reports.

Investment Scorecard
      As is often the case following major market turns, some of last year’s biggest laggards were among this
year’s biggest winners, most notably telecom equipment makers Corning and Lucent Technologies. Our
investments in auto parts manufacturers also excelled, with Dana Corp. and Navistar near the top of our leader
board. Larger Fund holdings such as Neiman Marcus and Vivendi Universal also boosted returns. Consistent
with trends in the market, our small and mid-cap sector holdings outperformed large cap portfolio companies.
      Looked at from a different point of view, our success in 2003 was due to the investments we made prior
to the beginning of the year. We have low portfolio turnover.



                                                       11
      Some of our larger telecommunications industry investments disappointed, with Verizon and AT&T
finishing 2003 in the red. Our aerospace investments negatively impacted the Fund’s performance as Lockheed
Martin and Northrop Grumman posted losses for the year.

Let’s Talk Stocks
      The following are stock specifics on selected holdings of our Fund. Favorable earnings prospects do not
necessarily translate into higher stock prices, but they do express a positive trend that we believe will develop
over time.
AutoNation Inc. (AN - $18.37 - NYSE) is the largest automotive retailer in the United States, with over $20 billion
in annual sales generated from 280 locations covering nearly 400 franchises. In addition to retailing new and
used vehicles, the company sells vehicle finance and insurance products from third parties, and provides parts
and repair services covered by factory warranties. The company aims to use its enormous size and scale to
generate margins in excess of industry averages.
Cablevision Systems Corp. (CVC - $23.39 - NYSE) is one of the nation’s leading communications and
entertainment companies, with a portfolio of operations that spans state-of-the-art cable television services,
professional sports teams and national cable television networks. Headquartered in Bethpage, N.Y.,
Cablevision serves 3 million cable customers in the most important cable TV market — New York. Cablevision
also owns and operates New York City’s famed Madison Square Garden (“MSG”), which includes the arena
complex, the N.Y. Knicks, the N.Y. Rangers and the MSG network. MSG operates Radio City Entertainment and
holds a long-term lease for Radio City Music Hall. In addition, Cablevision’s Rainbow Media unit owns high-
growth cable networks, including AMC, Women’s Entertainment, IFC, and several Fox Regional Sports
Networks. Cablevision is planning to spin off the non-sports oriented national cable networks with its new
consumer satellite offering, VOOM, in 2004.
Dana Corp. (DCN - $18.35 - NYSE) is a global supplier of components and systems to all motor vehicle and
off-highway equipment manufacturers. The company’s products include axles, driveshafts, vehicle frames and
structural components as well as engine seals and fluid management systems. Dana has several leading
brands in the replacement parts market, including Raybestos brake pads and Wix air and oil filters. In addition,
the company has a leasing portfolio and equipment financing operations under the umbrella of Dana Credit
Corporation. In late 2003, Dana stated its intentions to divest the aftermarket business.
Del Monte Foods Co. (DLM - $10.40 - NYSE) is widely recognized as a leading producer of quality fruits,
vegetables and tomato products. On December 20, 2002, the company completed the largest transaction in its
86-year history, acquiring the U.S. pet food and snacks, seafood, private label soup and broth, and infant
feeding businesses from H.J. Heinz (HNZ - $36.43 - NYSE). With this acquisition, Del Monte added higher
growth segments and strengthened its portfolio of leading brands to include StarKist, Kibbles ’n Bits, 9Lives,
and Nature’s Goodness. The company is the number one U.S. producer of canned fruit, vegetables, private
label soup and retail tuna, the second largest U.S. producer of pet snacks and infant feeding products, as well
as a leading manufacturer of pet food. Since the acquisition, the company has focused on integrating the Heinz
businesses, reinvesting in its core brands, and paying down debt.
Energizer Holdings Inc. (ENR - $37.56 - NYSE) became an independent company after it was spun-off from
Ralston Purina in April 2000. Energizer manufactures, markets and sells dry cell batteries and lighting products
worldwide. Their portfolio of products includes alkaline, lithium, rechargeable and miniature batteries along with
flashlights and lanterns under the Energizer and Eveready brand names. On March 28, 2002 Energizer

                                                        12
completed the purchase of Schick-Wilkinson Sword business from Pfizer for $930 million. Schick is the second
largest manufacturer of wet shave products with over 18% share of the market. Schick recently introduced two
new shaving products: Intuition for women and the first four-bladed shaving system for men, Quattro.
Gaylord Entertainment Co. (GET - $29.85 - NYSE) is a diversified company operating principally in two
segments: hospitality and media. The company’s hospitality group consists of an interrelated group of
businesses including the Gaylord Palms hotel in Orlando, FL, the Opryland Hotel Nashville, the Inn at Opryland,
the General Jackson (an entertainment showboat), and other related assets. The media group consists primarily
of the Grand Ole Opry, the Ryman Auditorium, the Wildhorse Saloon, and one Nashville radio station. Gaylord’s
management team is focusing on unlocking shareholder value. They are opening a third hotel in Grapevine, TX
in 2004. The company recently closed the purchase of Resort Quest in the fourth quarter of 2003.
Navistar International Corp. (NAV - $47.89 - NYSE), with world headquarters outside of Chicago, is a leading
North American manufacturer and marketer of medium and heavy trucks and school buses, and a worldwide
leader in the manufacture of mid-range diesel engines, produced in a range of 160 to 300 horsepower for the
International® brand. The company is also a private label designer and manufacturer of diesel engines for the
full-size pickup truck and van markets. The company’s products, parts and services are sold through a network
of 1,000 International® brand dealer outlets in the United States, Canada, Brazil and Mexico, and through more
than 90 separate dealers in 75 countries. Navistar provides financing for its customers and distributors
principally through its wholly-owned subsidiary, Navistar Financial Corporation.
Scripps (E. W.) Co. (SSP - $94.14 - NYSE), headquartered in Cincinnati, Ohio, is a diversified media company
with operations throughout the United States combining traditional and new media. The company is the tenth
largest newspaper publisher in the U.S. with 21 daily newspapers. Scripps also has 10 television stations,
reaching one in every ten homes in America. Additionally, Scripps Networks includes four national cable
networks: Home & Garden Television, Food Network, Do It Yourself and Fine Living. Lastly, the company has a
global licensing and syndication business which syndicates more than 150 comic strips and editorial features,
including Peanuts and Dilbert. Scripps is focused on growing and strengthening its cable television business.
Waste Management Inc. (WMI - $29.60 - NYSE) is the leading solid waste services company in the North
America, serving approximately 20 million residential and over 2 million commercial customers in 48 states
and Canada. With annual revenues of more than $11 billion, the company has about a 28% share of the $40
billion U.S. waste industry. Waste Management is positively leveraged to an improving economy, and it should
benefit from an increase in industrial production and related waste generation in 2004. Additionally,
management has been actively improving the firm’s operating efficiency, which should help accelerate earnings
growth in future years.

Minimum Initial Investment — $1,000
      The Fund’s minimum initial investment for regular accounts is $1,000. There are no subsequent
investment minimums. No initial minimum is required for those establishing an Automatic Investment Plan.
Additionally, the Fund and other Gabelli Funds are available through the no-transaction fee programs at many
major brokerage firms.




                                                      13
www.gabelli.com
      Please visit us on the Internet. Our homepage at www.gabelli.com contains information about Gabelli
Asset Management Inc., the Gabelli Mutual Funds, IRAs, 401(k)s, current and historical quarterly reports,
closing prices and other current news. We welcome your comments and questions via e-mail at
info@gabelli.com.
      You may sign up for our e-mail alerts at www.gabelli.com and receive early notice of quarterly report
availability, news events, media sightings, mutual fund prices and performance, and access to the Gabelli &
Company, Inc. research library.

In Conclusion
      Major market turns usually occur when least expected. This was certainly true in 2003. At the beginning
of the year, with war on the horizon and the economy threatening to dip back into recession, few could have
imagined that by year-end stock market indices would be up by 25% or more. As we enter 2004, the economic
outlook is considerably brighter. However, we do not believe a rising market tide will lift all boats in the year
ahead. Although in general we believe equities are reasonably valued, there are pockets where valuations are
stretched. Equity investors will have to be more valuation sensitive and selective if they hope to avoid potholes
to profits in 2004.
     The Fund’s daily net asset value is available in the financial press and each evening after 6:00 PM
(Eastern Time) by calling 800-GABELLI (800-422-3554). The Fund’s Nasdaq symbol is GABVX for Class A
Shares. Please call us during the business day for further information.

                                                Sincerely,




                                                Mario J. Gabelli, CFA
                                                Portfolio Manager and
                                                Chief Investment Officer
February 5, 2004


                                              Selected Holdings
                                              December 31, 2003
                AutoNation Inc.                                Gaylord Entertainment Co.
                Cablevision Systems Corp.                      Navistar International Corp.
                Dana Corp.                                     Scripps (E. W.) Co.
                Del Monte Foods Co.                            Telephone & Data Systems Inc.
                Energizer Holdings Inc.                        Waste Management Inc.


NOTE: The views expressed in this report reflect those of the portfolio manager only through the end of the period
stated in this report. The manager’s views are subject to change at any time based on market and other conditions.


                                                       14
Gabelli Funds and Your Personal Privacy
Who are we?
The Gabelli Funds are investment companies registered with the Securities and Exchange Commission
under the Investment Company Act of 1940. We are managed by Gabelli Funds LLC, Gabelli Advisers,
Inc. and Gabelli Fixed Income, LLC, which are affiliated with Gabelli Asset Management Inc. Gabelli
Asset Management is a publicly-held company that has subsidiaries that provide investment advisory or
brokerage services for a variety of clients.
What kind of non-public information do we collect about you if you become a Gabelli customer?
If you apply to open an account directly with us, you will be giving us some non-public information about
yourself. The non-public information we collect about you is:
• Information you give us on your application form. This could include your name, address,
     telephone number, social security number, bank account number, and other information.
• Information about your transactions with us, any transactions with our affiliates and transactions
     with the entities we hire to provide services to you. This would include information about the
     shares that you buy or redeem, and the deposits and withdrawals that you make. If we hire someone
     else to provide services—like a transfer agent—we will also have information about the transactions
     that you conduct through them.
What information do we disclose and to whom do we disclose it?
We do not disclose any non-public personal information about our customers or former customers to
anyone, other than our affiliates, our service providers who need to know such information and as
otherwise permitted by law. If you want to find out what the law permits, you can read the privacy rules
adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of Federal
Regulations, Part 248. The Commission often posts information about its regulations on its web site,
www.sec.gov.
What do we do to protect your personal information?
We restrict access to non-public personal information about you to the people who need to know that
information in order to provide services to you or the Fund and to ensure that we are complying with the
laws governing the securities business. We maintain physical, electronic, and procedural safeguards to
keep your personal information confidential.
             The Gabelli Value Fund Inc.
                    One Corporate Center
                  Rye, New York 10580-1422
                       800-GABELLI
                       800-422-3554
                     fax: 914-921-5118
                website: www.gabelli.com
                e-mail: info@gabelli.com
          Net Asset Value available daily by calling
               800-GABELLI after 6:00 P.M.

                      Board of Directors
Mario J. Gabelli, CFA             Karl Otto Pöhl
Chairman and Chief                Former President
Investment Officer                Deutsche Bundesbank
Gabelli Asset Management Inc.

Anthony J. Colavita                  Anthony R. Pustorino
Attorney-at-Law                      Certified Public Accountant
Anthony J. Colavita, P.C.            Professor Emeritus


Robert J. Morrissey
                                     Pace University

                                     Werner J. Roeder, MD
                                                                        The
Attorney-at-Law                      Vice President/Medical Affairs
Morrissey, Hawkins & Lynch

                            Officers
                                     Lawrence Hospital Center
                                                                        Gabelli
Bruce N. Alpert                    James E. McKee


                                                                        Value
President                          Secretary

                         Custodian
            Boston Safe Deposit and Trust Company

    Transfer Agent and Dividend Disbursing Agent
            State Street Bank and Trust Company                         Fund
                        Legal Counsel
                     Willkie Farr & Gallagher

                          Distributor
                     Gabelli & Company, Inc.
                                                                        Inc.


This report is submitted for the general information of the
shareholders of The Gabelli Value Fund Inc. It is not authorized for
distribution to prospective investors unless preceded or accompanied   SHAREHOLDER COMMENTARY
by an effective prospectus.
                                                                              DECEMBER 31, 2003
GAB409Q403SC
                         The Gabelli Value Fund Inc.
                                           Annual Report
                                         December 31, 2003



To Our Shareholders,
      The Sarbanes-Oxley Act requires a Fund’s principal executive and financial officers to certify the entire
contents of the semi-annual and annual shareholder reports in a filing with the Securities and Exchange
Commission on Form N-CSR. This certification would cover the portfolio manager’s commentary and subjective
opinions if they are attached to or a part of the financial statements. Many of these comments and opinions
would be difficult or impossible to certify.
      Because we do not want our portfolio managers to eliminate their opinions and/or restrict their
commentary to historical facts, we have separated their commentary from the financial statements and
investment portfolio and have sent it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at www.gabelli.com/funds.
     Enclosed are the audited financial statements and the investment portfolio as of December 31, 2003 with
a description of the factors that affected the performance during the past year.

Performance Discussion
     After three years of nothing but coal in their stockings, equity investors enjoyed a bountiful Christmas in
2003. Small-cap, mid-cap and technology sector investors received the biggest gifts, with the Russell 2000,
Russell Mid-Cap and Nasdaq Composite Indices gaining 47.3%, 40.1%, and 50.0% respectively during 2003,
versus the Standard & Poor’s (“S&P”) 500 Index’s 28.7% advance. We are pleased to report that the Gabelli Value
Fund’s (the “Fund”) portfolio surpassed our long-term goal of ten percent plus inflation, rising 31.9% in 2003.
      As is often the case following major market turns, some of last year’s biggest laggards were among this
year’s biggest winners, most notably telecom equipment makers Corning and Lucent Technologies. Our
investments in auto parts manufacturers also excelled, with Dana Corp. and Navistar near the top of our leader-
board. Larger Fund holdings such as Neiman Marcus and Vivendi Universal also boosted returns. Consistent
with trends in the market, our small and mid-cap sector holdings outperformed large-cap portfolio companies.
      Looked at from a different point of view, our success in 2003 was due to the investments we made prior
to the beginning of the year. We have low portfolio turnover.
      Some of our larger telecommunications industry investments disappointed, with Verizon and AT&T
finishing 2003 in the red. Our aerospace investments negatively impacted the Fund’s performance as Lockheed
Martin and Northrop Grumman posted losses for the year.
                                                       Sincerely yours,



                                                       Bruce N. Alpert
February 24, 2004                                      President
                                   Comparison of Change in Value of a $10,000 Investment in
                        The Gabelli Value Fund, The Consumer Price Index + 10% and The S&P 500 Index
                 $60,000
                                                                                                                                       $57,006*
                                         Gabelli Value Fund (Class A Shares)                                                           $55,514
                                         Consumer Price Index +10%
                 $50,000
                                         S&P 500 Index
                                                                                                                                       $42,675
                 $40,000



                 $30,000



                 $20,000



                 $10,000


                             * Includes effect of maximum sales charge of 5.5%.
                      $0
                       9/29/89 12/89 12/90 12/91 12/92 12/93 12/94 12/95 12/96 12/97 12/98 12/99 12/00 12/01 12/02 12/03

                           Past performance is not predictive of future results. The performance tables and graph do not reflect the
                           deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.


Comparative Results
                                      Average Annual Returns through December 31, 2003 (a)
                                                                     60000                                                              Since
                                            Quarter                    1 Year             3 Year           5 Year          10 Year   Inception (b)
 Gabelli Value Fund Class A . . . . . . . . 14.54%                    31.87%              5.32%            7.27%           13.20%      13.43%
                                             8.21%(c)                50000
                                                                      24.64%(c)           3.35%(c)         6.06%(c)        12.56%(c)   12.98%(c)
 S&P 500 Index . . . . . . . . . . . . . . . . . 12.17%                28.67%            (4.05)%          (0.57)%          11.06%                 10.89%
 Dow Jones Industrial Average . . . . . . 13.33%                     40000
                                                                      28.27%              1.01%            4.57%           13.09%                 12.68%
 Nasdaq Composite Index . . . . . . . . . . 12.11%                     50.01%            (9.36)%          (5.11)%           9.21%                 10.66%
 Class B . . . . . . . . . . . . . . . . . . . . . . . 14.34%        30000
                                                                      30.90%              4.48%            6.64%           12.86%                 13.19%
                                                        9.99%(d)      26.56%(d)           4.30%(d)         6.56%(d)        12.86%(d)              13.19%(d)
 Class C . . . . . . . . . . . . . . . . . . . . . . . 14.32%         30.95%              4.52%            6.71%           12.90%                 13.22%
                                                       13.45%(d)     20000
                                                                      30.09%(d)           4.52%(d)         6.71%(d)        12.90%(d)              13.22%(d)
 (a) Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes
                                                                     10000
     in share price and reinvestment of dividends and are net of expenses. Investment returns and the principal value of an investment
     will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. The Dow Jones Industrial Average
     is an unmanaged index of 30 large industrial stocks. The S&P 500 Index and the Nasdaq Composite Index are unmanaged
     indicators of stock market performance. Dividends are considered reinvested (except for the Nasdaq Composite Index).
                                                                               0
     Performance for periods less than one year is not annualized. The Class A Shares’ net asset values are used to calculate
                                                                                   12/89
                                                                               9/29/89 12/91 12/93 12/95 12/97 12/99 12
     performance for the periods prior to the issuance of Class B Shares and Class C Shares on March 15, 2000. The actual
     performance for the Class B Shares and Class C Shares would have been lower due to the additional expenses associated with
     these classes of shares.
 (b) From commencement of investment operations on September 29, 1989.
 (c) Includes the effect of the maximum 5.5% sales charge at the beginning of the period.
 (d) Includes the effect of the applicable contingent deferred sales charge at the end of the period shown for Class B and Class C
     Shares, respectively.

                                                                             2
The Gabelli Value Fund Inc.
Portfolio of Investments — December 31, 2003

                                                                                                                      Market                                                                                                                                    Market
  Shares                                                                             Cost                             Value                           Shares                                                       Cost                                         Value
  ——–—                                                                               ——                               ——–—                            ——–—                                                         —     —                                      ——–—
             COMMON STOCKS — 97.0%                                                                                                                     80,000 Charter Communications Inc.,
             Aerospace — 1.0%                                                                                                                                    Cl. A† . . . . . . . . . . . . . . . $                 355,504                    $                      321,600
   80,000    Lockheed Martin Corp. . . . . $ 1,696,500 $                                                          4,112,000                           500,000 Comcast Corp., Cl. A† . . . . . 14,221,572                                                         16,435,000
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
   95,000    Northrop Grumman Corp. . .                           8,933,260                                       9,082,000                                                                                    47,963,703                                        80,584,350
                                                     ------------------------------------------ -----------------------------------------------                                                       ------------------------------------------   -----------------------------------------------
                                                              10,629,760                                      13,194,000
                                                     ------------------------------------------ -----------------------------------------------               Communications Equipment — 1.7%
             Agriculture — 1.4%                                                                                                                       570,000 Corning Inc.† . . . . . . . . . . .                  4,005,220                                         5,945,100
   110,000   AGCO Corp.† . . . . . . . . . . . .                  1,952,774                                       2,215,400                           850,000 Lucent Technologies Inc.† . .                        3,993,409                                         2,414,000
 1,000,000   Archer-Daniels-Midland Co. . . 12,048,392                                                        15,220,000                              730,000 Motorola Inc. . . . . . . . . . . .                  9,216,496                                     10,271,100
                                                     ------------------------------------------ -----------------------------------------------
                                                              14,001,166                                      17,435,400                              590,000 Nortel Networks Corp.† . . . .                       3,134,964                                         2,495,700
                                                     ------------------------------------------ -----------------------------------------------        40,000 Scientific-Atlanta Inc. . . . . . .                       370,950                                      1,092,000
             Automotive — 0.1%                                                                                                                                                                        ------------------------------------------   -----------------------------------------------
                                                                                                                                                                                                               20,721,039                                        22,217,900
   38,000    China Yuchai International Ltd.                           300,576                                    1,162,800                                                                           ------------------------------------------   -----------------------------------------------
    5,000    General Motors Corp. . . . . .                            212,750                                         267,000                                Computer Software and Services — 0.1%
                                                     ------------------------------------------ -----------------------------------------------
                                                                       513,326                                    1,429,800                            80,000 EMC Corp.† . . . . . . . . . . . . .                 1,279,292                                         1,033,600
                                                     ------------------------------------------ -----------------------------------------------                                                       ------------------------------------------   -----------------------------------------------
             Automotive: Parts and Accessories — 3.2%                                                                                                         Consumer Products — 2.5%
 1,110,000   Dana Corp. . . . . . . . . . . . . . 19,382,222                                                  20,368,500                              370,000 Energizer Holdings Inc.† . . .                       7,784,003                                     13,897,200
   750,000   GenCorp Inc. . . . . . . . . . . . .                 7,790,788                                       8,077,500                            95,000 Gallaher Group plc, ADR . . .                        2,235,624                                         4,041,300
   190,000   Genuine Parts Co. . . . . . . . .                    4,329,694                                       6,308,000                           190,000 Gillette Co. . . . . . . . . . . . . .               5,492,514                                         6,978,700
   225,000   Modine Manufacturing Co. . .                         6,699,235                                       6,070,500                               500 Givaudan SA . . . . . . . . . . . .                       135,440                                           259,551
                                                     ------------------------------------------ -----------------------------------------------       200,000 Hartmarx Corp.† . . . . . . . . .                    1,114,026                                              834,000
                                                              38,201,939                                      40,824,500
                                                     ------------------------------------------ -----------------------------------------------        38,000 National Presto Industries Inc.                      1,227,695                                         1,373,700
             Aviation: Parts and Services — 0.7%                                                                                                      240,000 Wolverine World Wide Inc. . .                        3,018,417                                         4,891,200
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
   23,000    Barnes Group Inc. . . . . . . . .                         417,335                                         743,130                                                                                 21,007,719                                        32,275,651
   22,000    Curtiss-Wright Corp., Cl. B . .                            555,441                                        987,800                                                                        ------------------------------------------   -----------------------------------------------
  300,000    Fairchild Corp., Cl. A† . . . . .                    2,769,910                                       1,512,000                                   Consumer Services — 1.0%
   72,000    Sequa Corp., Cl. A† . . . . . . .                    2,608,934                                       3,528,000                           566,100 Rollins Inc. . . . . . . . . . . . . .               6,476,107                                     12,765,555
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
   32,000    Sequa Corp., Cl. B† . . . . . . .                    1,613,493                                       1,596,800                                   Diversified Industrial — 3.3%
                                                     ------------------------------------------ -----------------------------------------------
                                                                  7,965,113                                       8,367,730                            50,000 Ampco-Pittsburgh Corp. . . .                              250,017                                           683,500
                                                     ------------------------------------------ -----------------------------------------------
                                                                                                                                                      180,000 Cooper Industries Ltd., Cl. A                        7,912,187                                     10,427,400
             Broadcasting — 3.4%
                                                                                                                                                      220,000 Crane Co. . . . . . . . . . . . . . .                5,647,453                                         6,762,800
  185,800    Gray Television Inc. . . . . . . .                   2,600,078                                       2,809,296
                                                                                                                                                       50,000 Harbor Global Co. Ltd.† . . . .                           133,471                                           455,000
  155,000    Grupo Televisa SA, ADR . . .                         5,171,981                                       6,178,300
                                                                                                                                                      555,000 Honeywell International Inc. . . 18,354,427                                                        18,553,650
  706,000    Liberty Corp. . . . . . . . . . . . . 30,581,202                                                 31,904,140
                                                                                                                                                       30,000 ITT Industries Inc. . . . . . . . .                  1,264,376                                         2,226,300
  325,000    Paxson Communications
                                                                                                                                                      244,000 Katy Industries Inc.† . . . . . .                    2,125,720                                         1,393,240
                Corp.† . . . . . . . . . . . . . . .              2,943,572                                       1,251,250
                                                                                                                                                      100,100 Lamson & Sessions Co.† . .                                661,387                                           577,577
   60,000    Young Broadcasting Inc.,
                                                                                                                                                      100,200 Walter Industries Inc. . . . . .                     1,113,790                                         1,337,670
                Cl. A† . . . . . . . . . . . . . . .              1,009,589                                       1,202,400
                                                     ------------------------------------------ -----------------------------------------------        88,000 WHX Corp.† . . . . . . . . . . . .                        670,732                                           234,960
                                                              42,306,422                                      43,345,386                                                                              ------------------------------------------   -----------------------------------------------
                                                     ------------------------------------------ -----------------------------------------------                                                                38,133,560                                        42,652,097
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
             Business Services — 1.2%
                                                                                                                                                              Electronics — 2.1%
  630,000    Cendant Corp.† . . . . . . . . . .                   5,900,670                                   14,030,100
                                                                                                                                                      500,000 Agere Systems Inc., Cl. B† . .                       1,648,777                                        1,450,000
   15,000    ChoicePoint Inc.† . . . . . . . .                         495,963                                         571,350
                                                                                                                                                       50,000 Cypress Semiconductor
   20,000    Nashua Corp.† . . . . . . . . . .                         150,409                                         170,000
                                                                                                                                                                 Corp.† . . . . . . . . . . . . . . .                   405,384                                      1,068,000
   12,000    National Processing Inc.† . .                             129,035                                         282,600
                                                     ------------------------------------------ -----------------------------------------------       225,000 Texas Instruments Inc. . . . .                       5,908,377                                         6,610,500
                                                                  6,676,077                                   15,054,050                              160,000 Thermo Electron Corp.† . . . .                       3,083,301                                         4,032,000
                                                     ------------------------------------------ -----------------------------------------------
             Cable — 6.3%                                                                                                                             600,000 Thomas & Betts Corp. . . . . . 11,898,325                                                          13,734,000
  150,000    Adelphia Communications                                                                                                                   20,000 Tyco International Ltd. . . . . .                         236,970                                           530,000
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
                Corp., Cl. A† . . . . . . . . . .                      212,725                                             90,000                                                                              23,181,134                                        27,424,500
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
 2,725,000   Cablevision Systems Corp.,
                Cl. A† . . . . . . . . . . . . . . . 33,173,902                                               63,737,750

                                                                                          See accompanying notes to financial statements.

                                                                                                                                                  3
The Gabelli Value Fund Inc.
Portfolio of Investments (Continued) — December 31, 2003

                                                                                                              Market                                                                                                                                            Market
  Shares                                                                   Cost                               Value                                      Shares                                                                 Cost                            Value
  ——–—                                                                     ——                                 ——–—                                       ——–—                                                                   ——                              ——–—
             COMMON STOCKS (Continued)                                                                                                                           Food and Beverage — 5.8%
             Energy and Utilities — 2.5%                                                                                                                 250,000 Corn Products
  120,000    ConocoPhillips . . . . . . . . . . $ 6,693,813                                      $                 7,868,400                                        International Inc. . . . . . . . $ 6,416,952                                   $             8,612,500
  400,000    Duke Energy Corp. . . . . . . .                     7,340,000                                         8,180,000                             230,000 Del Monte Foods Co.† . . . . .                    1,768,196                                     2,392,000
   85,000    Kerr-McGee Corp. . . . . . . . .                    4,237,348                                         3,951,650                             222,000 Diageo plc, ADR . . . . . . . . .                 8,515,247                                    11,734,920
  300,000    Mirant Corp.† . . . . . . . . . . .                      833,424                                           117,000                          570,000 Flowers Foods Inc. . . . . . . .                  5,401,688                                    14,706,000
  110,000    NiSource Inc.† . . . . . . . . . .                       220,000                                           281,600                           90,000 Fomento Economico
  400,000    Northeast Utilities . . . . . . . .                 7,495,890                                         8,068,000                                        Mexicano SA de CV, ADR . .                     3,214,381                                         3,319,200
  160,000    Southwest Gas Corp. . . . . . .                     3,115,981                                         3,592,000                             250,000 Heinz (H.J.) Co. . . . . . . . . . .              8,864,372                                         9,107,500
                                                    ------------------------------------------   -----------------------------------------------
                                                             29,936,456                                        32,058,650                                  5,000 Hershey Foods Corp. . . . . . .                        315,272                                           384,950
                                                    ------------------------------------------   -----------------------------------------------         130,000 Kerry Group plc, Cl. A . . . . .                  1,478,133                                         2,410,053
             Entertainment — 18.3%                                                                                                                     1,300,000 PepsiAmericas Inc. . . . . . . . 18,049,233                                                     22,256,000
   40,000    Dover Motorsports Inc. . . . .                           202,064                                          140,000                                                                        ------------------------------------------   -----------------------------------------------
                                                                                                                                                                                                               54,023,474                                        74,923,123
  214,000    GC Companies Inc.† . . . . . .                           233,260                                           74,900                                                                        ------------------------------------------   -----------------------------------------------
  700,000    Gemstar-TV Guide                                                                                                                                    Health Care — 0.4%
                International Inc.† . . . . . .                  4,407,807                                  3,535,000                                     35,000 Apogent Technologies Inc.† . .                         700,154                                           806,400
   175,000   InterActiveCorp.† . . . . . . . .                   1,306,905                                  5,937,750                                    135,000 IVAX Corp.† . . . . . . . . . . . .               1,569,922                                         3,223,800
 4,050,000   Liberty Media Corp., Cl. A† . . 38,424,241                                                    48,154,500                                     62,000 Sola International Inc.† . . . .                       699,259                                      1,165,600
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
   660,000   Metro-Goldwyn-Mayer Inc.†                           8,073,706                                 11,279,400                                                                                              2,969,335                                         5,195,800
   210,000   The Walt Disney Co. . . . . . .                     4,277,829                                  4,899,300                                                                                 ------------------------------------------   -----------------------------------------------
 1,300,000   Time Warner Inc.† . . . . . . . . 19,235,796                                                  23,387,000                                            Hotels and Gaming — 3.7%
 2,680,000   Viacom Inc., Cl. A (a) . . . . . 61,156,126                                                  118,643,600                                    510,000 Aztar Corp.† . . . . . . . . . . . .              4,177,742                                    11,475,000
   800,000   Vivendi Universal SA, ADR† . . 14,729,992                                                     19,424,000                                     84,000 Dover Downs Gaming &
    68,000   World Wrestling                                                                                                                                        Entertainment Inc. . . . . . .                      923,046                                           794,640
                Entertainment Inc. . . . . . .                        773,305                                           890,800                          220,000 Gaylord Entertainment Co.† . .                    6,223,046                                         6,567,000
                                                    ------------------------------------------   -----------------------------------------------       4,000,000 Hilton Group plc . . . . . . . . . 14,966,082                                                   16,093,512
                                                         152,821,031                                       236,366,250
                                                    ------------------------------------------   -----------------------------------------------         740,000 Hilton Hotels Corp. . . . . . . .                 5,910,998                                     12,676,200
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
             Environmental Services — 1.6%                                                                                                                                                                     32,200,914                                        47,606,352
  150,000    Allied Waste Industries Inc.†                       1,306,239                                         2,082,000                                                                          ------------------------------------------   -----------------------------------------------
  240,000    Republic Services Inc. . . . . .                    4,203,761                                         6,151,200                                     Metals and Mining — 2.7%
  400,000    Waste Management Inc. . . .                         8,240,051                                     11,840,000                                325,000 Barrick Gold Corp. . . . . . . . .                3,062,665                                         7,380,750
                                                    ------------------------------------------   -----------------------------------------------         124,000 Kinross Gold Corp.† . . . . . .                   1,145,502                                              990,760
                                                             13,750,051                                        20,073,200
                                                    ------------------------------------------   -----------------------------------------------         475,000 Newmont Mining Corp. . . . .                      9,096,081                                     23,089,750
             Equipment and Supplies — 4.8%                                                                                                               215,000 Placer Dome Inc. . . . . . . . . .                2,020,400                                         3,850,650
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
  215,000    CIRCOR International Inc. . .                       2,364,520                                     5,181,500                                                                                       15,324,648                                        35,311,910
   75,000    Deere & Co. . . . . . . . . . . . .                 2,630,653                                     4,878,750                                                                              ------------------------------------------   -----------------------------------------------
  334,700    Flowserve Corp.† . . . . . . . .                    5,286,099                                     6,988,536                                         Paper and Forest Products — 0.5%
  115,000    Gerber Scientific Inc.† . . . . .                        803,696                                    915,400                                  23,041 Boise Cascade Corp. . . . . . .                        690,079                                           757,127
  255,000    GrafTech International Ltd.† . .                    3,286,844                                     3,442,500                                 245,000 Pactiv Corp.† . . . . . . . . . . .               2,410,660                                         5,855,500
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
  560,000    Navistar International Corp.†                   14,831,095                                       26,818,400                                                                                           3,100,739                                         6,612,627
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
   21,500    SL Industries Inc.† . . . . . . .                        155,870                                    172,430
                                                                                                                                                                 Publishing — 10.7%
  174,000    Sybron Dental
                                                                                                                                                         200,000 Belo Corp., Cl. A . . . . . . . . .               3,460,783                                     5,668,000
                Specialties Inc.† . . . . . . .                  3,147,682                                        4,889,400
                                                                                                                                                       1,364,000 Media General Inc., Cl. A . . . 26,816,240                                                     88,796,400
  400,000    Watts Water Technologies
                                                                                                                                                          90,000 Meredith Corp. . . . . . . . . . .                1,800,032                                     4,392,900
                Inc., Cl. A . . . . . . . . . . . .              5,033,389                                         8,880,000
                                                    ------------------------------------------   -----------------------------------------------         470,000 PRIMEDIA Inc.† . . . . . . . . .                  1,533,126                                     1,330,100
                                                             37,539,848                                        62,166,916                                460,000 Reader’s Digest
                                                    ------------------------------------------   -----------------------------------------------
             Financial Services — 2.3%                                                                                                                              Association Inc. . . . . . . . .               7,868,411                                         6,743,600
  500,000    American Express Co. . . . . . 17,953,972                                                         24,115,000                                159,000 Scripps (E.W.) Co., Cl. A . . . 10,505,258                                                      14,968,260
   35,000    Deutsche Bank AG, ADR . . .                         2,126,212                                         2,877,350                             320,000 Tribune Co. . . . . . . . . . . . . . 13,200,329                                                16,512,000
                                                                                                                                                                                                      ------------------------------------------   -----------------------------------------------
  200,000    Phoenix Companies Inc. . . .                        2,672,978                                         2,408,000                                                                                   65,184,179                                    138,411,260
                                                    ------------------------------------------   -----------------------------------------------                                                      ------------------------------------------   -----------------------------------------------
                                                             22,753,162                                        29,400,350
                                                    ------------------------------------------   -----------------------------------------------
                                                                                See accompanying notes to financial statements.

                                                                                                                                                   4
The Gabelli Value Fund Inc.
Portfolio of Investments (Continued) — December 31, 2003

                                                                                                               Market                                                                                                                                                                              Market
  Shares                                                                    Cost                               Value                                                  Shares                                                                Cost                                                   Value
  ——–—                                                                      ——                                 ——–—                                                   ——–—                                                                  —     —                                                ——–—
             COMMON STOCKS (Continued)                                                                                                                                840,000 Sprint Corp. - PCS Group† . . $ 7,194,024                                                               $             4,720,800
             Real Estate — 0.3%                                                                                                                                  1,200,000 Telecom Italia Mobile SpA† . .                                   8,333,209                                               6,523,713
   60,000    Catellus Development Corp. . . $                          924,399                    $                 1,447,200                                         565,000 Telephone & Data
  130,000    Griffin Land & Nurseries Inc.†                       1,463,689                                         1,847,430                                                              Systems Inc. . . . . . . . . . . 24,562,296                                                              35,340,750
                                                     ------------------------------------------   -----------------------------------------------                                                                              ------------------------------------------             -----------------------------------------------
                                                                  2,388,088                                         3,294,630                                                                                                           68,801,414                                                  80,482,763
                                                     ------------------------------------------   -----------------------------------------------                                                                              ------------------------------------------             -----------------------------------------------
             Retail — 2.3%                                                                                                                                                               TOTAL COMMON STOCKS . . 889,421,541                                                              1,249,774,805
                                                                                                                                                                                                                               ------------------------------------------             -----------------------------------------------
   45,000    Albertson’s Inc. . . . . . . . . . .                 1,206,635                                     1,019,250
                                                                                                                                                                                         PREFERRED STOCKS — 1.1%
  770,000    AutoNation Inc.† . . . . . . . . .                   6,047,761                                    14,144,900
                                                                                                                                                                                         Publishing — 1.1%
    1,000    Blockbuster Inc., Cl. A . . . . .                             12,700                                  17,950
                                                                                                                                                                      470,385 News Corp. Ltd., Pfd., ADR . . 14,086,211                                                                             14,229,132
   20,000    Burlington Coat Factory                                                                                                                                                                                           ------------------------------------------             -----------------------------------------------
                Warehouse Corp. . . . . . . .                          299,506                                       423,200                                  Principal
  130,000    Ingles Markets Inc., Cl. A . . .                     1,562,909                                        1,335,100                                    Amount
                                                                                                                                                              --------------------------
  255,000    Neiman Marcus Group Inc.,                                                                                                                                                   REPURCHASE AGREEMENTS — 1.8%
                Cl. B† . . . . . . . . . . . . . . .              6,720,675                                     12,750,000                                  $23,758,000 State Street Bank and Trust Co.,
                                                     ------------------------------------------   -----------------------------------------------
                                                              15,850,186                                        29,690,400                                                                 0.810%, dated 12/31/03,
                                                     ------------------------------------------   -----------------------------------------------
             Satellite — 0.3%                                                                                                                                                              due 01/02/04, proceeds at
  271,661    Hughes Electronics Corp.† . .                        5,310,419                                         4,495,995                                                              maturity, $23,759,069 (b)                    23,758,000                                                  23,758,000
                                                     ------------------------------------------   -----------------------------------------------                                                                              ------------------------------------------             -----------------------------------------------
             Specialty Chemicals — 1.2%                                                                                                                                                  TOTAL INVESTMENTS —
  190,000    Ferro Corp. . . . . . . . . . . . . .                4,037,051                                         5,169,900                                                              99.9% . . . . . . . . . . . . . . . $ 927,265,752                                              1,287,761,937
                                                                                                                                                                                                                               ------------------------------------------
                                                                                                                                                                                                                               ------------------------------------------
  840,000    Hercules Inc.† . . . . . . . . . . . 12,885,449                                                    10,248,000                                                               Other Assets and Liabilities (Net) — 0.1%                                                              938,643
                                                     ------------------------------------------   -----------------------------------------------                                                                                                                        -----------------------------------------------
                                                              16,922,500                                        15,417,900
                                                     ------------------------------------------   -----------------------------------------------                                                             NET ASSETS — 100.0% . . . . . . . . . . . . . . $1,288,700,580
             Telecommunications — 5.4%                                                                                                                                                                                                                                   -----------------------------------------------
                                                                                                                                                                                                                                                                         -----------------------------------------------
                                                                                                                                                        --------------------------------------------------------------
   500,000   AT&T Corp. . . . . . . . . . . . . . 15,486,317                                                   10,150,000
                                                                                                                                                                                                              For Federal tax purposes:
   105,000   CenturyTel Inc. . . . . . . . . . .                  3,242,733                                     3,425,100
                                                                                                                                                                                                              Aggregate cost . . . . . . . . . . . . . . . . . . . . . . $ 934,983,138
 1,000,000   Cincinnati Bell Inc.† . . . . . . .                  6,474,522                                     5,050,000                                                                                                                                                -----------------------------------------------
                                                                                                                                                                                                                                                                         -----------------------------------------------
   350,000   Citizens Communications Co.†                         4,091,594                                     4,347,000                                                                                     Gross unrealized appreciation . . . . . . . . . . . $ 391,746,983
   190,000   Commonwealth Telephone                                                                                                                                                                           Gross unrealized depreciation . . . . . . . . . . .                   (38,968,184)
                Enterprises Inc.† . . . . . . .                   4,043,377                                        7,172,500                                                                                                                                             -----------------------------------------------
                                                                                                                                                                                                              Net unrealized appreciation/(depreciation) . . $ 352,778,799
 2,000,000   Qwest Communications                                                                                                                                                                                                                                        -----------------------------------------------
                                                                                                                                                                                                                                                                         -----------------------------------------------
                International Inc.† . . . . . .                   6,075,670                                        8,640,000                            --------------------------------------------------------------
  200,000    Rogers Communications Inc.,                                                                                                                 (a)                    At December 31, 2003, 2,549,200 shares were pledged as collateral for
                Cl. B, ADR . . . . . . . . . . . .                3,324,238                                         3,300,000                                                   securities sold short.
 1,260,000   Sprint Corp. - FON Group . . 20,765,965                                                            20,689,200                               (b)                    Collateralized by U.S. Treasury Note, 1.75%, due 12/31/04, market value
   185,000   Verizon Communications Inc.                          7,141,238                                         6,489,800                                                   $24,234,310.
                                                     ------------------------------------------   -----------------------------------------------        †                      Non-income producing security.
                                                              70,645,654                                        69,263,600                               ADR – American Depository Receipt.
                                                     ------------------------------------------   -----------------------------------------------
             Transportation — 0.0%
   94,000    Grupo TMM SA de CV,                                                                                                                                                           SECURITIES SOLD SHORT
                Cl. A, ADR† . . . . . . . . . . .                      843,086                                           398,560                                     Shares                Common Stocks                           Proceeds                                              Market Value
                                                     ------------------------------------------   -----------------------------------------------                    -----------
                                                                                                                                                                    -----------             ------------------------
                                                                                                                                                                                           ------------------------                --------------
                                                                                                                                                                                                                                  --------------                                          -------------------
                                                                                                                                                                                                                                                                                         --------------------
             Wireless Communications — 6.2%                                                                                                                          230,000               Viacom Inc., Cl. B . . . . . . . . $ (8,826,265)                                           $ (10,207,400)
                                                                                                                                                                                                                              ------------------------------------------
                                                                                                                                                                                                                              ------------------------------------------              -----------------------------------------------
                                                                                                                                                                                                                                                                                      -----------------------------------------------
 1,750,000   AT&T Wireless Services Inc.† 17,206,868                                                           13,982,500
   500,000   Nextel Communications Inc.,
                Cl. A† . . . . . . . . . . . . . . .              7,528,510                                    14,030,000
  275,000    Rogers Wireless
                Communications Inc., Cl. B† 3,976,507                                                              5,885,000




                                                                                See accompanying notes to financial statements.

                                                                                                                                                    5
                                                          The Gabelli Value Fund Inc.
Statement of Assets and Liabilities                                                      Statement of Operations
December 31, 2003                                                                        For the Year Ended December 31, 2003

Assets:                                                                             Investment Income:
  Investments, at value (cost $927,265,752) . . . $1,287,761,937                      Dividends (net of foreign taxes of $135,348) . .                   $ 11,814,167
  Receivable for investments sold . . . . . . . . . .                 18,802,750      Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .        527,874
  Deposit on account with broker . . . . . . . . . . .                 1,632,506                                                                          –— — —
                                                                                                                                                         —– — — —
  Dividends and interest receivable . . . . . . . . .                    932,551      Total Investment Income . . . . . . . . . . . . . . .                12,342,041
                                                                                                                                                          –— — —
                                                                                                                                                         —– — — —
  Receivable for Fund shares sold . . . . . . . . . .                    793,642    Expenses:
  Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           718      Investment advisory fees . . . . . . . . . . . . . . .               11,143,764
  Other assets . . . . . . . . . . . . . . . . . . . . . . . . .          51,957
                                                                    –— — — —
                                                                   —– — — —           Distribution fees . . . . . . . . . . . . . . . . . . . . . .         2,976,207
  Total Assets . . . . . . . . . . . . . . . . . . . . . . . . 1,309,976,061          Shareholder services fees . . . . . . . . . . . . . . .               1,161,609
                                                                    –— — — —
                                                                   —– — — —
Liabilities:                                                                          Shareholder communications expenses . . . . .                           290,388
  Securities sold short (proceeds $8,826,265) . .                     10,207,400      Custodian fees . . . . . . . . . . . . . . . . . . . . . . .            151,646
  Dividends payable . . . . . . . . . . . . . . . . . . . . .             35,100      Legal and audit fees . . . . . . . . . . . . . . . . . . .              146,135
  Payable for Fund shares redeemed . . . . . . . .                     1,468,661
  Payable for investments purchased . . . . . . . .                    7,539,623      Dividends on securities sold short . . . . . . . . .                    101,100
  Payable for investment advisory fees . . . . . . .                   1,065,091      Registration fees . . . . . . . . . . . . . . . . . . . . .              82,474
  Payable for distribution fees . . . . . . . . . . . . . .              289,290      Directors’ fees . . . . . . . . . . . . . . . . . . . . . . .            71,011
  Other accrued expenses . . . . . . . . . . . . . . . .                 670,316      Miscellaneous expenses . . . . . . . . . . . . . . . .                  287,626
                                                                   —– — — —
                                                                    –— — — —                                                                              –— — —
                                                                                                                                                         —– — — —
  Total Liabilities . . . . . . . . . . . . . . . . . . . . . .       21,275,481      Total Expenses . . . . . . . . . . . . . . . . . . . . . .           16,411,960
                                                                    –— — — —
                                                                   —– — — —                                                                               –— — —
                                                                                                                                                         —– — — —
  Net Assets applicable to 71,766,479                                                 Net Investment Loss . . . . . . . . . . . . . . . . . .              (4,069,919)
     shares outstanding . . . . . . . . . . . . . . . . . . $1,288,700,580                                                                                –— — —
                                                                                                                                                         —– — — —
                                                                    –— — — —
                                                                   —– — — —
                                                                   —– — — —
                                                                    –— — — —        Net Realized and Unrealized Gain on
Net Assets Consist of:
  Capital stock, at par value . . . . . . . . . . . . . . .$              71,766      Investments, Foreign Currency Transactions
  Additional paid-in capital . . . . . . . . . . . . . . . .         937,230,950      and Securities Sold Short Transactions:
  Accumulated net realized loss on                                                    Net realized gain on investments, foreign
     investments, foreign currency and                                                   currency and short sale transactions . . . . .                    21,249,781
     short sale transactions . . . . . . . . . . . . . . . .          (7,717,386)     Net change in unrealized appreciation/
  Net unrealized appreciation on foreign                                                 (depreciation) on investments, foreign
     currency transactions . . . . . . . . . . . . . . . . .                 200         currency and short sale transactions . . . . .                  299,457,722
  Net unrealized depreciation on securities                                                                                                               –— — —
                                                                                                                                                         —– — — —
     sold short . . . . . . . . . . . . . . . . . . . . . . . . .     (1,381,135)     Net Realized and Unrealized Gain on
  Net unrealized appreciation on investments . .                     360,496,185         Investments, Foreign Currency and
                                                                    –— — — —
                                                                   —– — — —              Short Sale Transactions . . . . . . . . . . . . .               320,707,503
  Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . $1,288,700,580                                                                           –— — —
                                                                                                                                                         —– — — —
                                                                    –— — — —
                                                                   —– — — —
                                                                    –— — — —
                                                                   —– — — —
Shares of Capital Stock:                                                              Net Increase in Net Assets Resulting
  Class A:                                                                               from Operations . . . . . . . . . . . . . . . . . . . .         $316,637,584
  Net asset value and redemption price per share                                                                                                          –— — —
                                                                                                                                                         —– — — —
                                                                                                                                                          –— — —
                                                                                                                                                         —– — — —
     ($1,255,668,226 ÷ 69,876,523 shares
     outstanding; 150,000,000 shares
     authorized of $0.001 par value) . . . . . . . . . .                  $17.97
                                                                           –—
                                                                          —– —
                                                                           –—
                                                                          —– —
  Maximum sales charge . . . . . . . . . . . . . . . . .                  5.50%
                                                                           –—
                                                                          —– —
                                                                           –—
                                                                          —– —
  Maximum offering price per share (NAV ÷ 0.945,
     based on maximum sales charge of 5.50% of
     the offering price at December 31, 2003) . .                         $19.02
                                                                           –—
                                                                          —– —
                                                                           –—
                                                                          —– —
  Class B:
  Net Asset Value and offering price per share
     ($18,059,192 ÷ 1,033,663 shares outstanding;
     100,000,000 shares authorized of $0.001
     par value) . . . . . . . . . . . . . . . . . . . . . . . . .         $17.47(a)
                                                                           –—
                                                                          —– —
                                                                           –—
                                                                          —– —
  Class C:
  Net Asset Value and offering price per share
     ($14,973,162 ÷ 856,293 shares outstanding;
     50,000,000 shares authorized of $0.001
     par value) . . . . . . . . . . . . . . . . . . . . . . . . .         $17.49(a)
                                                                           –—
                                                                          —– —
                                                                           –—
                                                                          —– —
(a) Redemption price varies based on length of time held.

                                                       See accompanying notes to financial statements.

                                                                                     6
                                                                  The Gabelli Value Fund Inc.
Statement of Changes in Net Assets

                                                                                                                                         Year Ended        Year Ended
                                                                                                                                      December 31, 2003 December 31, 2002
Operations:                                                                                                                            — — — — — — — — — — — —
                                                                                                                                      — — — — — — — — — — — —
  Net investment income/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            $   (4,069,919)   $   (3,371,336)
  Net realized gain/(loss) on investments, foreign currency, call options and futures transactions                                              21,249,781        (4,681,764)
  Net change in unrealized appreciation/(depreciation) of investments, foreign currency,
    call options and futures transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 299,457,722      (206,526,289)
                                                                                                                                             — –– — —
                                                                                                                                            — —–— — —          — –– — —
                                                                                                                                                              — —–— — —
  Net increase/(decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . .                                       316,637,584      (214,579,389)
                                                                                                                                             — –– — —
                                                                                                                                            — —–— — —          — –– — —
                                                                                                                                                              — —–— — —
Distributions to shareholders:
  Net realized gain on investments
    Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (16,651,715)             —
    Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        (245,625)             —
    Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          (204,547)             —
                                                                                                                                             — –– — —
                                                                                                                                            — —–— — —          — –– — —
                                                                                                                                                              — —–— — —
  Total distributions to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   (17,101,887)             —
                                                                                                                                             — –– — —
                                                                                                                                            — —–— — —          — –– — —
                                                                                                                                                              — —–— — —
Capital share transactions
    Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     (61,554,611)      (32,042,446)
    Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       3,751,819         6,732,522
    Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         3,944,812         5,261,830
                                                                                                                                             — –– — —
                                                                                                                                            — —–— — —          — –– — —
                                                                                                                                                              — —–— — —
  Net increase/(decrease) in net assets from capital share transactions . . . . . . . . . . . . . . . . . .                                   (53,857,980)      (20,048,094)
                                                                                                                                             — –– — —
                                                                                                                                            — —–— — —          — –– — —
                                                                                                                                                              — —–— — —
  Net increase/(decrease) in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       245,677,717      (234,627,483)
Net Assets:                                                                                                                                  — –– — —
                                                                                                                                            — —–— — —          — –– — —
                                                                                                                                                              — —–— — —
  Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        1,043,022,863     1,277,650,346
                                                                                                                                             — –– — —
                                                                                                                                            — —–— — —          — –– — —
                                                                                                                                                              — —–— — —
  End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $1,288,700,580    $1,043,022,863
                                                                                                                                             — –– — —
                                                                                                                                            — —–— — —
                                                                                                                                            — —–— — —
                                                                                                                                             — –– — —          — –– — —
                                                                                                                                                              — —–— — —
                                                                                                                                                               — –– — —
                                                                                                                                                              — —–— — —
                                                              See accompanying notes to financial statements.

Notes to Financial Statements

1. Organization. The Gabelli Value Fund Inc. (the “Fund”) was organized on July 20, 1989 as a Maryland
corporation. The Fund is a non-diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the “1940 Act”). The Fund’s primary objective is long term
capital appreciation. The Fund commenced investment operations on September 29, 1989.
2. Significant Accounting Policies. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following
is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange, quoted
by the National Association of Securities Dealers Automated Quotations, Inc. (“Nasdaq”) or traded in the U.S.
over-the-counter market for which market quotations are readily available are valued at the last quoted sale
price on that exchange or market as of the close of business on the day the securities are being valued. If there
were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were
no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or
asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board
of Directors so determines, by such other method as the Board of Directors shall determine in good faith, to
reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market
are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC
(the “Adviser”). Portfolio securities primarily traded on foreign markets are generally valued at the preceding
                                                                                                7
The Gabelli Value Fund Inc.
Notes to Financial Statements (Continued)

closing values of such securities on their respective exchanges. Securities and assets for which market
quotations are not readily available are valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Board of Directors. Short term debt securities with
remaining maturities of 60 days or less are valued at amortized cost, unless the Board of Directors determines
such does not reflect the securities fair value, in which case these securities will be valued at their fair value as
determined by the Board of Directors. Debt instruments having a maturity greater than 60 days for which market
quotations are readily available are valued at the latest average of the bid and asked prices. If there were no
asked prices quoted on such day, the security is valued using the closing bid price. Options are valued at the
last sale price on the exchange on which they are listed. If no sales of such options have taken place that day,
they will be valued at the mean between their closing bid and asked prices.
Repurchase Agreements. The Fund may enter into repurchase agreements with primary government
securities dealers recognized by the Federal Reserve Board, with member banks of the Federal Reserve System
or with other brokers or dealers that meet credit guidelines established by the Adviser and reviewed by the Board
of Directors. Under the terms of a typical repurchase agreement, the Fund takes possession of an underlying
debt obligation subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an
agreed-upon price and time, thereby determining the yield during the Fund’s holding period. The Fund will always
receive and maintain securities as collateral whose market value, including accrued interest, will be at least equal
to 100% of the dollar amount invested by the Fund in each agreement. The Fund will make payment for such
securities only upon physical delivery or upon evidence of book entry transfer of the collateral to the account of
the custodian. To the extent that any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral. If the seller defaults and the value
of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Options. The Fund may purchase or write call or put options on securities or indices. As a writer of call options, the
Fund receives a premium at the outset and then bears the risk of unfavorable changes in the price of the financial
instrument underlying the option. The Fund would incur a loss if the price of the underlying financial instrument
increases between the date the option is written and the date on which the option is terminated. The Fund would
realize a gain, to the extent of the premium, if the price of the financial instrument decreases between those dates.
As a purchaser of put options, the Fund pays a premium for the right to sell to the seller of the put option the
underlying security at a specified price. The seller of the put has the obligation to purchase the underlying security
upon exercise at the exercise price. If the price of the underlying security declines, the Fund would realize a gain upon
sale or exercise. If the price of the underlying security increases, the Fund would realize a loss upon sale or at
expiration date, but only to the extent of the premium paid. At December 31, 2003, there were no open call options.
Futures Contracts. The Fund may engage in futures contracts for the purpose of hedging against changes in
the value of its portfolio securities and in the value of securities it intends to purchase. Upon entering into a
futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal
to a certain percentage of the contract amount. This is known as the “initial margin.” Subsequent payments
(“variation margin”) are made or received by the Fund each day, depending on the daily fluctuation of the value
of the contract. The daily changes in the contract are included in unrealized gains or losses. The Fund
recognizes a realized gain or loss when the contract is closed.

                                                           8
The Gabelli Value Fund Inc.
Notes to Financial Statements (Continued)

There are several risks in connection with the use of futures contracts as a hedging device. The change in value
of futures contracts primarily corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may
not be able to enter into a closing transaction because of an illiquid secondary market.
Securities Sold Short. The Fund may make short sales. A short sale involves selling a security which the
Fund does not own. The proceeds received for short sales are recorded as liabilities and the Fund records an
unrealized gain or loss to the extent of the difference between the proceeds received and the value of the open
short position on the day of determination. The Fund records a realized gain or loss when the short position is
closed out. By entering into a short sale, the Fund bears the market risk of an unfavorable change in the price of
the security sold short. Dividends on short sales are recorded as an expense by the Fund on the ex-dividend date.
Foreign Currency Translation. The books and records of the Fund are maintained in United States (U.S.) dollars.
Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment securities, income and expenses are
translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses,
which result from changes in foreign exchange rates and/or changes in market prices of securities, have been
included in unrealized appreciation/depreciation on investments and foreign currency transactions. Net realized
foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and
losses between trade date and settlement date on investment securities transactions, foreign currency transactions
and the difference between the amounts of interest and dividends recorded on the books of the Fund and the
amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates
between the initial trade date and subsequent sale trade date is included in realized gain/(loss) on investments.
Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date
with realized gain or loss on investments determined by using the identified cost method. Interest income
(including amortization of premium and accretion of discount) is recorded as earned. Dividend income is
recorded on the ex-dividend date.
Dividends and Distributions to Shareholders. Dividends and distributions to shareholders are recorded on
the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from accounting principles generally accepted in the United States of
America. These differences are primarily due to differing treatments of income and gains on various investment
securities held by the Fund, timing differences and differing characterization of distributions made by the Fund.
For the year ended December 31, 2003, reclassifications were made to decrease accumulated net investment
loss for $4,069,919 and increase accumulated net realized loss on investments for $3,484,538, with an
offsetting adjustment to additional paid-in capital.
The tax character of distributions paid during the fiscal year ended December 31, 2003 and December 31, 2002
were as follows:
                                                                               Year Ended        Year Ended
                                                                            December— —2003
                                                                            — — — — 31, — —   December— —2002
                                                                            ————————
                                                                             ———————          — — — — 31, — —
                                                                                               ———————
                                                                                              ————————
                 Distributions paid from:
                 Net long term capital gains . . . . . . . . . . . . .          $17,101,887           —
                                                                                 — –— —
                                                                                — —– —           — –— —
                                                                                                — —– —
                 Total Distributions paid . . . . . . . . . . . . . . . .       $17,101,887           —
                                                                                 — –— —
                                                                                — —– —
                                                                                — —– —
                                                                                 — –— —          — –— —
                                                                                                — —– —
                                                                                                 — –— —
                                                                                                — —– —
                                                                            9
The Gabelli Value Fund Inc.
Notes to Financial Statements (Continued)

Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended. As a result, a Federal income tax
provision is not required.
Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S.
withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the
terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required
to claim the benefits of such treaties.
As of December 31, 2003, the components of accumulated earnings/(losses) on a tax basis were as follows:
                Net unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . .    $351,397,664
                                                                                                 ——–—–———
                Total accumulated gain . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $351,397,664
                                                                                                 ——–—–———
                                                                                                 ——–—–———

Determination of Net Asset Value and Calculation of Expenses. In calculating net asset value per share of
each class, investment income, realized and unrealized gains and losses and expenses other than class
specific expenses, are allocated daily to each class of shares based upon the proportion of net assets of each
class at the beginning of each day. Distribution expenses are solely borne by the class incurring the expense.
3. Investment Advisory Agreement. The Fund has entered into an investment advisory agreement (the
“Advisory Agreement”) with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily
and paid monthly, at the annual rate of 1.00% of the value of the Fund’s average daily net assets. In accordance
with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s portfolio,
oversees the administration of all aspects of the Fund’s business and affairs and pays the compensation of all
officers and Directors of the Fund who are its affiliates.
4. Distribution Plan. The Fund’s Board of Directors has adopted a distribution plan (the “Plan”) pursuant to
Rule 12b-1 under the 1940 Act. For the year ended December 31, 2003, the Fund incurred distribution costs
payable to Gabelli & Company, Inc., an affiliate of the Adviser, of $2,730,056 for Class A Shares, or 0.25% of
average daily net assets, the annual limitation under the Plan. Class B and Class C Shares incurred distribution
and service costs of $139,231 and $106,920, respectively, or 1.00% of average daily net assets, the annual
limitation under the Plan. Such payments are accrued daily and paid monthly.
5. Portfolio Securities. Purchases and sales of securities for the year ended December 31, 2003, other than
short-term securities, aggregated $87,711,970 and $167,251,789, respectively.
6. Transactions with Affiliates. During the year ended December 31, 2003, the Fund paid brokerage
commissions of $451,933 to Gabelli & Company, Inc. and its affiliates. During the year ended December 31,
2003, Gabelli & Company, Inc. informed the Fund that it received $189,496 from investors representing
commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares.
The cost of calculating the Fund’s net asset value per share is a Fund expense pursuant to the Investment
Advisory Agreement between the Fund and the Adviser. During fiscal 2003, the Fund reimbursed the Adviser
$34,800 in connection with the cost of computing the Fund’s net asset value.



                                                                           10
The Gabelli Value Fund Inc.
Notes to Financial Statements (Continued)

7. Capital Stock Transactions. The Fund offers three classes of shares — Class A Shares, Class B Shares,
and Class C Shares. Class A Shares are subject to a maximum front-end sales charge of 5.50%. Class B
Shares are subject to a contingent deferred sales charge (“CDSC”) upon redemption within six years of
purchase. The applicable CDSC is equal to a declining percentage of the lesser of the net asset value per share
at the date of original purchase or at the date of redemption, based on the length of time held. Class C Shares
are subject to a 1% CDSC for two years after purchase.
Transactions in shares of capital stock were as follows:
                                                                                                        Year Ended                       Year Ended
                                                                                                    December 31, 2003                 December 31, 2002
                                                                                                 ————————————
                                                                                               ————————————                      ————————————
                                                                                                                                ————————————
                                                                                                Shares           Amount           Shares           Amount
                                                                                                —————
                                                                                               —————           ——————
                                                                                                              ——————            —————
                                                                                                                                 —————           —————
                                                                                                                                                  —————
                                                                                                                                                —————
                                                                                                         Class A                           Class A
                                                                                                ————————————
                                                                                               ————————————                      ————————————
                                                                                                                                ————————————
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .      9,723,938    $ 147,718,210      14,293,074     $ 214,124,829
Shares issued upon reinvestment of distributions                      .   .   .   .   .   .        847,940       15,220,497              —                 —
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . .       .   .   .   .   .   .    (14,881,121)    (224,493,318)    (17,291,816)     (246,167,275)
                                                                                                —————
                                                                                               —————           – —————
                                                                                                               —
                                                                                                              ——————            —————
                                                                                                                                 —————           —————
                                                                                                                                                  —————
                                                                                                                                                —————
   Net increase/(decrease) . . . . . . . . . . . . . . . .            .   .   .   .   .   .     (4,309,243) $ (61,554,611)       (2,998,742)    $ (32,042,446)
                                                                                                —————
                                                                                               —————
                                                                                                —————
                                                                                               —————           – —————
                                                                                                              ——————
                                                                                                               —
                                                                                                              ——————
                                                                                                               – —————
                                                                                                               —                —————
                                                                                                                                 —————
                                                                                                                                 —————
                                                                                                                                —————             —————
                                                                                                                                                —————
                                                                                                                                                 —————
                                                                                                                                                 —————
                                                                                                                                                  —————
                                                                                                                                                —————
                                                                                                         Class B                           Class B
                                                                                                ————————————
                                                                                               ————————————                      ————————————
                                                                                                                                ————————————
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .        479,608    $ 6,891,727           564,409     $ 8,469,392
Shares issued upon reinvestment of distributions                      .   .   .   .   .   .         11,799          205,899              —                 —
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . .       .   .   .   .   .   .       (233,047)      (3,345,807)       (128,374)       (1,736,870)
                                                                                                —————
                                                                                               —————           – —————
                                                                                                               —
                                                                                                              ——————            —————
                                                                                                                                 —————           —————
                                                                                                                                                  —————
                                                                                                                                                —————
   Net increase/(decrease) . . . . . . . . . . . . . . . .            .   .   .   .   .   .        258,360    $ 3,751,819           436,035     $ 6,732,522
                                                                                                —————
                                                                                               —————
                                                                                                —————
                                                                                               —————           – —————
                                                                                                              ——————
                                                                                                               —
                                                                                                              ——————
                                                                                                               – —————
                                                                                                               —                —————
                                                                                                                                 —————
                                                                                                                                 —————
                                                                                                                                —————             —————
                                                                                                                                                —————
                                                                                                                                                 —————
                                                                                                                                                 —————
                                                                                                                                                  —————
                                                                                                                                                —————
                                                                                                         Class C                           Class C
                                                                                                ————————————
                                                                                               ————————————                      ————————————
                                                                                                                                ————————————
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . .   .   .   .   .   .   .        421,522    $ 6,325,244           420,687     $ 6,400,274
Shares issued upon reinvestment of distributions                      .   .   .   .   .   .          8,867          154,902              —                 —
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . .       .   .   .   .   .   .       (170,497)      (2,535,334)        (81,023)       (1,138,444)
                                                                                                —————
                                                                                               —————           – —————
                                                                                                               —
                                                                                                              ——————            —————
                                                                                                                                 —————           —————
                                                                                                                                                  —————
                                                                                                                                                —————
   Net increase/(decrease) . . . . . . . . . . . . . . . .            .   .   .   .   .   .        259,892    $ 3,944,812           339,664     $ 5,261,830
                                                                                                —————
                                                                                               —————
                                                                                                —————
                                                                                               —————           – —————
                                                                                                              ——————
                                                                                                               —
                                                                                                              ——————
                                                                                                               – —————
                                                                                                               —                —————
                                                                                                                                 —————
                                                                                                                                 —————
                                                                                                                                —————             —————
                                                                                                                                                —————
                                                                                                                                                 —————
                                                                                                                                                 —————
                                                                                                                                                  —————
                                                                                                                                                —————
8. Transactions in Securities of Affiliated Issuers. The 1940 Act defines affiliated issuers as those in which
the Fund’s holdings of an issuer represent 5% or more of the outstanding voting securities of the issuer. A
summary of the Fund’s transactions in the securities of these issuers during the year ended December 31,
2003, is set forth below:                                                                          Percent
                                                                Net                                                                                 Owned
                                            Beginning          Shares                          Ending      Realized   Dividend      Value at       of Shares
                                             Shares             Sold                           Shares        Gain     Income    December 31, 2003 Outstanding
                                            ————
                                             ————
                                            —————             —————
                                                              ————
                                                               ————                           ————
                                                                                               ————
                                                                                              —————       ————— ————— — — — — —— — — — — —
                                                                                                          ————
                                                                                                           ———— ————  ————       — — — ———   —— — — — —
                                                                                                                                              ——
                                                                                                                                              ——
                                                                                                                                             ———   ————
Media General Inc., CI. A                   1,462,000          98,000                         1,364,000   $4,463,146 $1,091,740    $88,796,400       5.94%
                                                                                                          ————
                                                                                                           ————
                                                                                                           ————
                                                                                                           ———— — — —
                                                                                                            ————
                                                                                                            ————
                                                                                                          ————
                                                                                                            ————
                                                                                                            ————
                                                                                                           ———— — — —
                                                                                                          ————
                                                                                                          ————
                                                                                                           ————
                                                                                                           ————        ———
                                                                                                                       ———         — —— —
                                                                                                                                    — – —
                                                                                                                                    — – —
                                                                                                                                   — —— —


9. Other Matters. On October 7, 2003, the Fund’s Adviser received a subpoena from the Attorney General of
the State of New York requesting information on mutual fund shares trading practices. The Adviser is fully
cooperating in responding to the request. The Fund does not believe that this matter will have a material
adverse effect on the Fund’s financial position or results of the operations.




                                                                                                   11
The Gabelli Value Fund Inc.
Financial Highlights

Selected data for a share of capital stock outstanding throughout each period:
                                        Income
                              from Investment Operations                  Distributions                                        Ratios to Average Net Assets/Supplemental Data
                           —————————————
                         — — — — — — — — — — — — — ————————————————————                                                      ——————————————————————————————
                                           Net                                                                                                   Net           Net
              Net Asset               Realized and     Total                  Net                     Net Asset              Net Assets      Investment     Operating
   Period      Value,         Net      Unrealized      from        Net      Realized                   Value,                  End of     Income (Loss) to Expenses to   Portfolio
   Ended      Beginning   Investment Gain (Loss) on Investment Investment   Gain on       Total        End of       Total      Period        Average Net   Average Net   Turnover
December 31   of Period Income (Loss) Investments Operations     Income   Investments Distributions    Period      Return†   (in 000’s)        Assets       Assets (c)     Rate
——————        ————— —————— —————— ————— ————— —————— ——————                                           —————       —————      —————           —————          —————      —————
Class A
   2003(a) $13.81        $(0.05) $ 4.45      $ 4.40      —     $(0.24)     $(0.24)     $17.97       31.9% $1,255,668        (0.35)%      1.44%(d)       8%
   2002(a)     16.43      (0.04)    (2.58)    (2.62)     —         —           —        13.81      (16.0)      1,024,452    (0.28)       1.40         16
   2001(a)     16.13      (0.05)     0.93      0.88      —      (0.58)      (0.58)      16.43        5.4       1,267,975    (0.30)       1.40         29
   2000(a)     19.45      (0.03)    (1.54)    (1.57)     —      (1.75)      (1.75)      16.13       (7.9)      1,158,085    (0.14)       1.37         66
   1999        16.08      (0.06)     5.15      5.09      —      (1.72)      (1.72)      19.45       31.9       1,205,320    (0.40)       1.38         59
Class B
   2003(a) $13.53        $(0.17) $ 4.35      $ 4.18      —     $(0.24)     $(0.24)     $17.47       30.9% $ 18,059          (1.10)%      2.19%(d)       8%
   2002(a)     16.23      (0.14)    (2.56)    (2.70)     —         —           —        13.53      (16.6)         10,493    (1.01)       2.16         16
   2001(a)     16.07      (0.18)     0.92      0.74      —      (0.58)      (0.58)      16.23        4.6           5,505    (1.10)       2.19         29
   2000(a)(b) 18.20       (0.14)    (0.24)    (0.38)     —      (1.75)      (1.75)      16.07       (1.9)            681    (0.89)(f)    2.12(e)      66
Class C
   2003(a) $13.54        $(0.17) $ 4.36      $ 4.19      —     $(0.24)     $(0.24)     $17.49       30.9% $ 14,973          (1.10)%      2.19%(d)       8%
   2002(a)     16.24      (0.14)    (2.56)    (2.70)     —         —           —        13.54      (16.6)          8,078    (1.01)       2.16         16
   2001(a)     16.07      (0.18)     0.93      0.75      —      (0.58)      (0.58)      16.24        4.6           4,170    (1.08)       2.19         29
   2000(a)(b) 18.20       (0.14)    (0.24)    (0.38)     —      (1.75)      (1.75)      16.07       (1.9)            566    (0.89)(f)    2.12(e)      66
 ————————
————————
  † Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including
    reinvestment of dividends and does not reflect applicable sales charges. Total return for the period of less than one year is not annualized.
(a) Per share amounts have been calculated using the average daily shares outstanding method.
(b) From the commencement of offering on March 1, 2000.
(c) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee
    credits, the expense ratios would be 1.36% (Class A), 2.11% (Class B), and 2.11% (Class C) for 2000 and 1.39% (Class A), 2.18% (Class B), and 2.18%
    (Class C) for 2001. For the fiscal year ended December 31, 1999, 2002 and 2003, the effect of the custodian fee credits was minimal.
(d) The Fund incurred dividend expense on securities sold short for the year ended December 31, 2003. If the dividend expense had not been incurred, the
    ratios of operating expenses to average net assets would have been 1.43% (Class A), 2.18% (Class B), and 2.18% (Class C), respectively.
(e) Annualized.




                                                                   See accompanying notes to financial statements.

                                                                                                12
The Gabelli Value Fund Inc.
Report of Independent Auditors

To The Board of Directors and Shareholders of
The Gabelli Value Fund Inc.
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and
the related statements of operations and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of The Gabelli Value Fund Inc. (the “Fund”) at December 31, 2003,
the results of its operations for the year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the
Fund’s management; our responsibility is to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.


PricewaterhouseCoopers LLP
New York, New York
February 20, 2004




                                                        13
The Gabelli Value Fund Inc.
Additional Fund Information (Unaudited)

The business and affairs of the Fund are managed under the direction of the Fund’s Board of Directors. Information pertaining to the
Directors and officers of the Fund is set forth below. The Fund’s Statement of Additional Information includes additional information about
The Gabelli Value Fund Inc. Directors and is available, without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing
to The Gabelli Value Fund at One Corporate Center, Rye, NY 10580-1422.
                              Term of      Number of
Name, Position(s)            Office and   Funds in Fund
     Address  1
                             Length of  Complex Overseen                 Principal Occupation(s)                          Other Directorships
     and Age               Time Served2    by Director                   During Past Five Years                            Held by Director
————————                                  — — — —
                           —————— — — — — —                              ——————————                                       ————————
INTERESTED DIRECTORS :   3


Mario J. Gabelli            Since 1989        24                 Chairman of the Board and Chief Executive           Director of Morgan Group Holdings,
Director, President and                                          Officer of Gabelli Asset Management Inc. and        Inc. (holding company); Vice
Chief Investment Officer                                         Chief Investment Officer of Gabelli Funds, LLC      Chairman of Lynch Corporation
Age: 61                                                          and GAMCO Investors, Inc.; Vice Chairman            (diversified manufacturing)
                                                                 and Chief Executive Officer of Lynch Interactive
                                                                 Corporation (multimedia and services)
Karl Otto Pöhl                Since 1992            33           Member of the Shareholder Committee of Sal          Director of Gabelli Asset
Director                                                         Oppenheim Jr. & Cie (private investment             Management Inc. (investment
Age: 74                                                          bank); Former President of the Deutsche             management); Chairman, Incentive
                                                                 Bundesbank and Chairman of its Central              Capital and Incentive Asset
                                                                 Bank Council (1980-1991)                            Management (Zurich); Director at
                                                                                                                     Sal Oppenheim Jr. & Cie, Zurich
NON-INTERESTED DIRECTORS:
Anthony J. Colavita    Since 1989                   35           President and Attorney at Law in the law firm                       —
Director                                                         of Anthony J. Colavita, P.C.
Age: 68
Robert J. Morrissey    Since 1989                   10           Partner in the law firm of Morrissey,                               —
Director                                                         Hawkins & Lynch
Age: 64
Anthony R. Pustorino   Since 1989                   17           Certified Public Accountant; Professor              Director of Lynch Corporation
Director                                                         Emeritus, Pace University                           (diversified manufacturing)
Age: 78
Werner J. Roeder, MD   Since 2001                   26           Vice President/Medical Affairs of Lawrence                          —
Director                                                         Hospital Center and practicing private physician
Age: 63
OFFICERS:
Bruce N. Alpert        Since 2003                   —            Executive Vice President and Chief Operating                        —
President                                                        Officer of Gabelli Funds, LLC since 1988 and
Age: 52                                                          an officer of all mutual funds advised by Gabelli
                                                                 Funds, LLC and its affiliates. Director and
                                                                 President of Gabelli Advisers, Inc.
James E. McKee                Since 1995            —            Vice President, General Counsel and Secretary                       —
Secretary                                                        of Gabelli Asset Management Inc. since 1999
Age: 40                                                          and GAMCO Investors, Inc. since 1993; Secretary
                                                                 of all mutual funds advised by Gabelli Advisers,
                                                                 Inc. and Gabelli Funds, LLC

  1
      Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
  2
      Each Director will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders if any, called for the purpose
      of considering the election or re-election of such Director and until the election and qualification of his or her successor, if any, elected
      at such meeting, or (ii) the date a Director resigns or retires, or a Director is removed by the Board of Directors or shareholders, in
      accordance with the Fund’s By-Laws and Declaration of Trust.
  3
      “Interested person” of the Fund as defined in the Investment Company Act of 1940. Messrs. Gabelli and Pöhl are each considered an
      “interested person” because of their affiliation with Gabelli Funds, LLC which acts as the Fund’s investment adviser.

                                                                         14
Gabelli Funds and Your Personal Privacy
Who are we?
The Gabelli Funds are investment companies registered with the Securities and Exchange Commission
under the Investment Company Act of 1940. We are managed by Gabelli Funds LLC, Gabelli Advisers,
Inc. and Gabelli Fixed Income, LLC, which are affiliated with Gabelli Asset Management Inc. Gabelli
Asset Management is a publicly-held company that has subsidiaries that provide investment advisory or
brokerage services for a variety of clients.
What kind of non-public information do we collect about you if you become a Gabelli customer?
If you apply to open an account directly with us, you will be giving us some non-public information about
yourself. The non-public information we collect about you is:
• Information you give us on your application form. This could include your name, address,
     telephone number, social security number, bank account number, and other information.
• Information about your transactions with us, any transactions with our affiliates and transactions
     with the entities we hire to provide services to you. This would include information about the
     shares that you buy or redeem, and the deposits and withdrawals that you make. If we hire someone
     else to provide services—like a transfer agent—we will also have information about the transactions
     that you conduct through them.
What information do we disclose and to whom do we disclose it?
We do not disclose any non-public personal information about our customers or former customers to
anyone, other than our affiliates, our service providers who need to know such information and as
otherwise permitted by law. If you want to find out what the law permits, you can read the privacy rules
adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of Federal
Regulations, Part 248. The Commission often posts information about its regulations on its web site,
www.sec.gov.
What do we do to protect your personal information?
We restrict access to non-public personal information about you to the people who need to know that
information in order to provide services to you or the Fund and to ensure that we are complying with the
laws governing the securities business. We maintain physical, electronic, and procedural safeguards to
keep your personal information confidential.
             The Gabelli Value Fund Inc.
                    One Corporate Center
                  Rye, New York 10580-1422
                       800-GABELLI
                       800-422-3554
                     fax: 914-921-5118
                website: www.gabelli.com
                e-mail: info@gabelli.com
          Net Asset Value available daily by calling
               800-GABELLI after 6:00 P.M.

                      Board of Directors
Mario J. Gabelli, CFA             Karl Otto Pöhl
Chairman and Chief                Former President
Investment Officer                Deutsche Bundesbank
Gabelli Asset Management Inc.

Anthony J. Colavita                  Anthony R. Pustorino
Attorney-at-Law                      Certified Public Accountant
Anthony J. Colavita, P.C.            Professor Emeritus


Robert J. Morrissey
                                     Pace University

                                     Werner J. Roeder, MD
                                                                       The
Attorney-at-Law                      Vice President/Medical Affairs
Morrissey, Hawkins & Lynch

                            Officers
                                     Lawrence Hospital Center
                                                                       Gabelli
Bruce N. Alpert                    James E. McKee


                                                                       Value
President                          Secretary

                         Custodian
            Boston Safe Deposit and Trust Company

    Transfer Agent and Dividend Disbursing Agent
            State Street Bank and Trust Company                        Fund
                        Legal Counsel
                     Willkie Farr & Gallagher

                          Distributor
                     Gabelli & Company, Inc.
                                                                       Inc.


This report is submitted for the general information of the
shareholders of The Gabelli Value Fund Inc. It is not authorized for
distribution to prospective investors unless preceded or accompanied           ANNUAL REPORT
by an effective prospectus.
                                                                             DECEMBER 31, 2003
GAB409Q403SR

								
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