At 81 years old, Ron Baronhe investment guru manages assets that exceed US$48,000 million and continues to make strategic bets in a versatile market with constant changes. What are the keys behind your success?
The investor recommends long-term bets with companies with growth potential and significant diversification of funds. Your star investments are tesla either SpaceX. It is that Baron placed US$400 million in the company he leads Elon Muskbetween 2014 and 2016 with which it acquired shares at prices that were around u$s10 to US$12. This decision made Tesla the core of its flagship fund, the Baron Partners Fundwhich currently has 40% of its portfolio invested in the company.
Tesla and SpaceX performances
He Baron Partners Fundwhich manages US$7.3 billion, this year showed a performance of 37%, driven by the remarkable 75% growth in Tesla’s share price.
For Baron, Tesla is not only an automotive company; represents a technological revolution that promises to reach a market capitalization of up to US$5 trillion in the next decade. Furthermore, he contemplates that if autonomous driving and robots materialize as Musk foresees, that value could even be exceeded.
The investor’s other big bet is SpaceXwhose value grew significantly in 2024, reaching US$350,000 million after a secondary sale. Baron remains optimistic about the company’s future, predicting that the rocket company could reach a valuation of US$600,000 million by 2030. SpaceX is not just an aerospace company, but “the railway to space”, according to the guru, who also highlights the reuse of rockets as its main competitive advantage.
How to have good returns?
The investment philosophy has long-term vision and patience as its fundamental pillars. Baron Partners Fund It was created in 1992, since that time it delivered an average annualized return close to 15%, consistently ranking among the most prominent mutual funds in the United States. The strategy is based on identifying companies with lasting competitive advantages and solid growth prospects, which can be maintained in the long term.
Baron applies this philosophy to his firm’s other funds: Baron Growth Fundwith assets for US$7.7 billioninvests in small American companies with great expansion potential. Although this fund had a more modest performance in 2024, up 3%, its average annualized return since 1994 is over 12%.
The investor seeks to maintain low turnover in their portfolios. The goal is to double the return on an investment every five years, he explains. Only sell when a company loses its growth momentum or changes its fundamental structure.
Calculated diversification
Yes ok Tesla and SpaceX They are the pillars of its recent success, Baron maintains a diversified portfolio with companies like Arch Capital Groupdedicated to the insurance sector, and Gartnera technology consulting firm. Likewise, invest in MSCIan emerging markets operator, and Vail Resortswhich operates ski resorts in Colorado.
Baron is also exploring new horizons through active ETFsa strategy he began to consider recently after the influence of his children, Michael and Davidwho actively participate in the management of the firm. Although he was initially reluctant, he now recognizes the tax benefits and expansion possibilities that these instruments offer.
Source: Ambito
