Tesla is the most profitable company on the planet, says Baron Capital
Baron Capital one of the largest and well respected of all the financial firms, held a live event for investors this year. This was the first live event for the firm since 2019, and it was held at the Metropolitan Opera House in New York City. The main guest was Elon Musk, CEO of Tesla. The focus was Tesla will become the most profitable company in the world.
There were 5,000 investors present at the event, and they all had a chance to hear where the Tesla CEO thinks the company is going in the future.
Ron Baron, owner of Baron Capital, interviewed the celebrity billionaire, and Baron is bullish on Tesla. Baron Capital has 19 funds, totaling approximately $40 billion in assets. Many of these funds are heavily invested in Tesla.
The Baron Partners Fund has dropped $6 billion into the EV company, meanwhile the Baron Focused Growth Fund has built up about $700 million shares of Tesla stock in its portfolio.
These funds, as well as Tesla, and the Stock Market, overall have had a rough year. Tesla lost 50% of its share value, while both of the Baron's funds mentioned here are down 31 percent and 23 percent respectively. The stock market had its downside most of the year, with some gains, but mostly not more than a slight overall rise for the year.
Baron has seen a 25 percent return on the Baron Partners Fund over the last five years, and seems to see the drop in Tesla shares as a good thing. He sees this as a opportunity rather then a time to pull out of the company.
In this bear market, he sees a growth opportunity for Tesla. Of the company he has said that the company in "ten years," will most likely be the largest and most profitable company on the planet.
Baron pointed out that even with the share price decreases the company still has longer-term plans on growth.
Baron pointed out during the interview, "a year ago nothing was cheap, now its the opposite. stocks are dirt cheap."
Baron sees "big opportunities," in this market, for buying low with returns coming in very high.
Although stated in the Forbes article, as a pre-event interview, it was already well documented that Baron's feelings toward Tesla were shared by investors in the marketplace.
Baron did go on the record to acknowledge this has been a rough year in the stock market, and his funds and Tesla. He felt this would best be called "relative," also commenting that "because our turnover is low and we have a great long-term record, investors are willing to cut us some slack and to remain patient."
Filings show that Baron Capital is one of Tesla's top 20 investors, devoting 11 percent of its portfolio to the stock. In comparison, other growth funds usually invest 5 or 6 percent of their portfolio in Tesla.
Baron Capital has been around since 1982. The core of the company has been research of the financial markets. Tesla was founded on the promises of an electric future, now realized, could be an investment now, in this down turn.
As Baron Capital says of itself in their advertising, about their investment strategy, it is a long-term growth orientated financial strategy. Perhaps Baron, who has built a firm worth $6.7 billion, knows something about what will happen long term.
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