Baron Capital Investments has more than $39 billion in assets under management and its top investment in its focused growth fund is Tesla Inc (NASDAQ:TSLA), accounting for roughly 22.3%.
Since founding Baron Capital in 1982, Ron Baron, CEO and manager of the funds had been heavily invested in shares of Tesla. Back on Oct. 27, 2021, Baron joined CNBC’s "Squawk Box" to reveal his roughly $6 billion profit in Tesla, which he bought seven to eight years prior for a cost basis of $42.88 each.
Baron also reported he planned to remain a shareholder in the electric vehicle maker for another 10 years.
What Happened: Early Friday, Baron joined CNBC’s "Squawk Box" again to discuss the health of the U.S. economy along with his investment strategy.
Baron said the economy was weakening as companies slowly hire and make layoffs, while Baron Capital had steadily grown and was looking for office space because it had never announced layoffs in its history.
Baron also noted he was buying into Tesla CEO Elon Musk's idea about investing which is, “To be successful you have to be optimistic and have a long-term perspective.” He also quoted Warren Buffett, who said, “The best holding period is infinity.”
After every pandemic, war or financial crisis there will be inflation, and to get out of this mess is to print money, said Baron.
Baron reported that the plan was to devalue money in order to pay off the incurred debt that was a problem of printing too much money.
Baron said what was happening was similar to historical events and cited the Great Depression that ended by entering World War II, which enabled the government to print more money.
Why It Matters: Baron said the long-term devaluation of the dollar was a good thing as it will create more jobs in the future, which was why he believed the Fed made the right decision.
If there was a liquidity crunch in the markets, Baron said his shareholders will get better prices if the opportunity presented itself.
When Baron first started investing, the Dow Jones was at 800 then went to 32,000 about 38 years later, a return of 40 times. Baron believed growth is going to be faster over the next 20 to 40 years than in the past.
Baron said it was a great time to be alive, naming the healthcare and technology industries as two sectors he thought great advancements were yet to come.
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