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So, I know we just met, but I have a slight bone to pick. [applause] Go ahead. >> I want to read your Q2 letter. >> I want to write it. [laughter] >> It's July 22nd, 23rd. >> I know I'm so late. >> You know, it's tough writing it, but once you get it written, you say, "Man, I really like how it sounds, you know, but I go over and over and over it." Uh, Baron AI, you have no excuse. >> I know, Michael. Am I right? >> I'm I'm behind as well in letters, so it's a sensitive topic at the moment. >> All right. not the first person to say this, >> but there's so much you have to do >> all the time to write letters or to be in a program and prepare for it. >> And your letter was it's not one page. >> No, three. >> Yeah. No, it's more than that >> for >> the Ron letter. >> Yeah, it was the letter from Ron. >> Substantial. It's a lot of work. >> Substantial. >> I find that it's very hard to write about markets given the pace of change. You write something and something happens the next day. >> Whoops. And you either say this changes what I just wrote or I wish I had incorporated this new piece of information. Find that things are speeding up. Do you >> really fast? Um I don't really write very much about the markets. Write really mostly about investing and about businesses and about people >> principles. >> Yeah. >> About what we do, you know, the mission that we follow. We have >> that's my idea. Uh, everyone else is writing about you watch television, the market's going to do this, the stock's going to do that. We don't worry about that at all. >> This, right? There's no value in that kind of commentary because it comes and goes. There's no reason to write it down. >> We're an investor in MSCI and a lot of what they do, the information they provide to hedge funds, investors, uh, they enable a lot of this to happen. A lot of volatility comes about because it's going to systematic investing >> instead of investing in fundamentals the way we do. >> You probably love the AI selloff of Msei and S&P and Moody's as if AI was going to replace all of these companies. >> Well, Msei is going to be amazing. I was talking to Henry Fernandez who's the founder and chairman of that company and he owns a little bit over a billion dollars and we own over a billion dollars. So, we're having a contest and uh and he said, "Ron, you know, if you lend me $100 million in in you know, if you lend me $100 million in 10 years, it's going to worth $400 or $500 million." Uh, I'd rather own it in my name. [laughter] >> Is this the most exciting time? I know you've been doing this for a long time, but this has got to be up there in terms of business change. >> 56 years. >> What do you think? >> Um, most exciting time for me. We've never had such a large position as we have in uh SpaceX and uh and Elon. You know, when you think about how we started our business and we had uh so I come to New York in 1969, the summer 1969 1960s I didn't get into medical school and uh I taught for a year biochemistry at Georgetown Medical School. I taught there I couldn't get into that school. I was hoping I would get in after a year on PhD fellowship. >> Same. Where'd you grow up? >> Aspberry Park, New Jersey boardwalk. Um, and so after a year, I got a job in the patent office working in the daytime as an examiner and went to law school at night on a scholarship. And when I was working in the patent office, uh, my art was chemistry. That was draft exempt job, uh, critical skill. And so I issued the patents on the nose cone on the coatings for the nose cones that they use to come back to earth and not burn up. So I always advise my friends if you ever have a chance to ride in a nose cone, don't do it. [laughter] >> You had firsthand knowledge a good idea. >> No. And so so that was uh the 1960s. So I come to New York in 1969. I'm in debt. $15,000 and my credit wasn't good enough to get a telephone. Couldn't get a telephone. [snorts] And and then uh I talked my way into a job after three months being unemployed as an analyst. In the 1970s, I did research and sold it to hedge funds, mutual funds, partnerships, families, uh for commissions. So my whole reason of being was to buy and sell. And so >> did you work with AW Jones? >> They were one of my clients >> and he was like allegedly the first you were doing broke you were doing brokerage. >> Uh I was doing brokerage. In fact, one of my clients was AW Jones and it was not him but it was a man named Walter Harrison and he was a portfolio manager there and I remember uh I tried advertising for Baron Funds and I said well uh I'll run an ad. I ran an ad in the Wall Street Journal uh and I made the ad up and the ad was we deliver uh and it was a picture of a man with a white apron on and a chef's hat and a tray and I said we deliver performance not pizza and [laughter] so ran a Wall Street Journal was $8,000 and the first day we got 50 phone calls and response. >> It worked. >> Uh >> did you take the phone calls? >> Um they got to me but we got 50 phone calls. There were three people with me and so phone calls 50 then it went to 10 then it went to 20 then it went to five and on Friday there were none and so uh so I called up one of my friends Walther Harrison uh from AW Jones I said Walther I need an order how do you expect me to survive I need an order and he said uh well I'd like to have a hamburger rare with French [laughter] fries >> you like >> right so so I found a greasy spoon place uh on Wall Street and I said, "Listen, I want the greasiest, you know, leakiest hamburger you can have, but don't deliver till 5:00 and put it on the guy's desk and leave it there." And it comes in Monday morning and it's just all over his desk. >> Oh my god. >> But that was AW Jones. Anyway, so 1970s, I did research, sold it for commissions, and then uh one of my clients and then 1980 19 uh I went from having a minus net worth to being worth a million dollars in 1980. And then 1982 started Baron Capital. We had $10 million under management. It all come from George Soros. And then 1976 or 77 he was one of my clients for ideas. Uh he had had a bad year and quantum said why don't you have some other people manage money for you instead of just you. And uh he gave $5 million to six people, seven people. I was one of them favorite guys outside of him. And then everyone else bought and sold and I bought and held and my performance is better than the others. So I started off brand Capital with 10 million under management m million and then that was 1982. 1992 100 million and at the end of June it was 69 billion. >> Michael, are you taking notes? You don't know the story. [laughter] >> I've heard it. >> And 69 billion is what we had and then uh 70 billion is how much profits we made. So we managed 69ap I think that's I think that's I think that's got to be one of the biggest deliveries of capital back to investors >> all time record 69 I don't know but I think that we're going to make hundreds of billions of dollars next 105 years >> actually Bergkshire did okay but a little bit different >> you know we have Baron Capital book value our management company our family management company we had a $100,000 book value in uh 198200 00,000 uh and that's now 4 and a.5 billion. No pressure. >> And then there's $1.5 billion dollars more of deferred taxes that we owe if I were going to sell things which we're not going to sell. So basically 100,000 in 1982 turned into six billion. >> I mean it's it's really unbelievable. >> Well, [applause] it's it's not one person. Uh our business is now 233 people and 45 are analysts. We have very low turnover of our portfolio. Very low turnover of the people who work there and uh just long-term investors. >> I was going to say the the the buy and hold part, the buy is the easy part, the hold is the hard part and a lot of people talk about doing it, but not everybody does it. You know, people say uh one of the most well-known hedge funds who was in difficult times five or 10 years ago, whenever it was, uh he talked about being a long-term investor. He turned over his portfolio every day. Just crazy things. >> Yes. >> And and our turnover uh is in very in all virtually all instances is less than 10%. and the portfolios that Michael and I and my other son David manage, it's probably less than 5%. And we just are long-term. So, we made of our profits uh we made about $40 billion uh before Elon and $30 billion more with Elon. So, it's that's our 70. >> Yeah. And I think with uh case of Elon, we're going to make I can't we can't even figure out how we're going to make hundreds of billions from here uh with our investments in SpaceX and Tesla. >> We'll see about that. >> Well, we're going to we're definitely going to get we're definitely going to get into that. Do we want to start the show? >> Oh, that wasn't >> That wasn't that wasn't it? I got to do that again. We got it all. Don't [laughter] worry. 252 >> [music] >> This message is brought to you by New. Today's markets don't sit still and neither should your portfolio. >> As rising rates, inflation, and [music] economic uncertainty continue to reshape the investment landscape, informed investors are looking beyond traditional markets to stay ahead. New's private markets platform offers innovative solutions across real estate, credit, infrastructure, and natural [music] capital. Strategies built to go beyond traditional market exposure and capture opportunities that stocks and bonds simply can't reach. With decades of experience and the scale to deliver across the full risk return spectrum, New is helping investors navigate [music] complexity and build portfolios for the future. New unlocking opportunity in private markets. Visit newben.com/alternatives to learn more. Investing [music] involves risk. Loss of principle is possible. Oh boy. Compounding friends episode 252. Ladies and gentlemen, welcome to the world's greatest investing podcast. It is. I don't know if I told you that. [applause] You did. [cheering] Four out of five dentists agree. This is their favorite. All right, you guys. We have a our favorite things. >> We have an extremely special uh uh pair of guests today. Uh literally a living legend with us. We are so excited. This is the show that we have wanted to do for quite some time. And uh without any further ado, let me introduce Ron Baron. Ron is the founder, CEO, and portfolio manager for Baron Capital, the growth equity firm he started in 1982. now manages over 55 billion. He's known as one of the great long-term Elon Musk investors. Baron bought most of its Tesla stake between 2014 and 2016 at a split [music] adjusted average around $14 a share and turned a $1.75 billion SpaceX [music] investment that began in 2017 into a roughly $25 billion position. Unbelievable. Welcome to the show, Ron. We're so excited to talk to [cheering] you about it. And with Ron is Michael Baron. Michael is a co-president and a portfolio manager at Baron Capital where he started as a research analyst in 2004. How'd you get in there, man? You got to know the right people. All right. Michael has co-managed the concentrated non-diversified Baron Partners Fund alongside his father since 2018. The fund returned about 25% in 2025 versus just 8.7% for the Russell Midcap growth with Tesla at roughly 27% of the portfolio. He also runs Baron Wealthbuilder and co-manages the Baron First Principles ETF RB with Ron and his brother David. Michael, thank you so much for being [applause] here. Thanks for having me. All right, here's how I want to start. Uh this is a this is a quote. Since their respective inceptions as mutual funds, 15 funds representing 96.2% of Baron Funds AUM have outperformed their benchmarks and 13 funds representing 95.4% of Baron Funds AUM rank in the top 20% of their respective Morning Star categories. Six funds representing 54% of your aumumumumumumumumumumumumumumumumumumumum rank in the top 5% of their categories and Baron Partners Fund is the number one performing mutual fund in the United States since its inception as a mutual fund in 2003. That is outrageous. you you wake up every day and say I'm the I'm the GOAT or I mean how how does it feel I guess how does it feel first of all to be in a one of one in a category of your own? >> Um before we get into that uh just want to say not 55 billion as of June it's 70 billion. All right. I I >> And that and that comes from >> Okay. >> a hund00 million in 1982 1992. 100 million became 70 billion. Uh and so that's one >> and if you wrote your July 2nd your Q2 letter we would have known that. Ron >> I'll never underestimate you again Ron. >> And then and then Tesla Tesla uh we've been investing in Tesla between 2014 and 16. Met him in 2010. It took uh four years and he said what took you so long? Took four years uh before we began to invest. And then between 14 and 16 invested 400 million and uh we made about uh actually I checked today we made $7.7 billion in profit >> on that 4 billion. I think we're going to make five times that next 10-15 years. But the big position we have now that's now about $5 billion of our assets. Uh uh however the big investment we have now is SpaceX. Yeah. >> And that represents as of June about $2 billion. 25 billion out of 70 is Space X. You can't find another fund. >> It's a bet. It's a real bet. >> We don't consider ourselves betting. We consider ourselves investing on the basis of knowledge, not bets. >> You've got Beahones. >> Yeah. Either way, >> either way, it's a conviction. It's a conviction position. you know, Mark uh Hoplamasian, who's the president, chief operating officer for Hyatt, was telling me that he and Tom Prrisker, who's my friend, who's the chairman and biggest owner of Hyatt, said that they marveled and their investor a lot of executives of companies in which we've invested are investors in SpaceX through us. Uh and he said that they marveled at how we were able to in SpaceX instance, how did you ever hold on to that stock straight through you your point about how hard it is not just to be able to find an investment that goes up a lot but to find an investment goes up a lot and not sell it. It's it's much hard especially but is it easier in the private markets with SpaceX? I guess you could have sold some but you could not have sold all even if you wanted to. And uh we started buying we could have sold any day we wanted. >> Yeah. >> Uh we started buying >> SpaceX in 2000. So Tesla was 2014 to 16 and then they did employee tender offers uh every year twice to do a billion dollars and uh they get oversubscribed very quickly. And then Elon started in a private company. Elon started buying some of those employee tenders for himself. >> So great signal. So because we had a uh and he owned 44% of the company and and so so we had this good relationship with him. So we got included and we were treated the same as Saudi Arabia, as Abu Dhabi, as Fidelity. We're a tiny investor and that's how they treated us. It was incredible. And so we invested in the aggregate in 27 discrete transactions since 2017 purchased stock and and we were either the number one or number two or number three purchaser on each of these transactions in in SpaceX 27 times. So we're talking about selling we were purchasing. So other than just these tenders uh we told them that if they ever see any stock that is available we want to buy it. And so we would get these calls and say, "Here's a guy who's been in the Lester for a long time. He's got $25 million for sale. Do you want it?" Said, "Give me a day. I'll call you tomorrow." And they called me, "Call him back tomorrow. We want it. We bought it." So we kept 27 transactions. And uh uh though, and in the aggregate, we invested I think it's two billion so far. Uh and it's now worth about June 25 billion. And then we bought a billion dollars more on the IPO. And the reason we bought the billion, they said, "Well, how come that we bought a billion more because we owned 1.25% of SpaceX and I didn't want to get diluted, right?" And uh but but I think we're going to make that investment where I think from Tesla we'll make four or five times our money next 10 years. We think that in SpaceX we're going to make somewhere uh 20 times 30 times from the IPO price. 20 to 30 times next 10 to 15 years. Incredible business. You think this is going to be the biggest company in the world? >> Yes. >> By by a wide margin? >> I think it's going to be we think it's going to be 20 to 30 trillion dollar value at least $40 trillion. Uh it started off at two trillion as the IPO. Um >> Ron, when people hear that number, it sounds like you're on drugs. >> Um I don't do drugs. I don't I don't drink. Um, >> but you you understand like when people people say, "Well, we're first seeing now the first ever $5 trillion." >> The S&P market cap total is what 70 trillion, whatever it is. So >> 70. >> So people are saying that people are saying that >> I think it might be 80. >> What what your your vision is for something that's never existed before on Earth. So I'm sure you have a great answer for it. >> It's you're right. uh this is a unique business and one of the things we look for all the so so we have so so we have our firm is different than most money managers so we have a mission and the mission is to change lives that's our mission and so when you say have something like a mission then all of a sudden you get better employees than you do because they're working for something not just for themselves and then we have principles that we follow and the principles are how do we do it you know we question everything we do. You talked about gambling before, about betting, we question everything. And I tell the people with whom we work that what I want them to do when they're making our analysts, when they make recommendations to us, I want them to think about if their family, you know, fortune, if their family good well-being depended upon them being right, what would they have to know in order to make that investment? What would they have to know? And I said, 'When when when an when companies come to visit us, which they do every single day, they come to visit us to court us to invest in their businesses. I said, I don't want to see them not typing. I don't want to see them stop asking questions. You ask and there are no dumb questions. You keep asking questions and you ask questions as though your life depends on you don't have to write all the time. I don't expect that. But I do expect you to find out what are the critical elements of a business that make us want to invest in it that make it different than all the other businesses. There have to be and we have to like the people and so so uh you're asking questions and then you're you're betting on people. That's a bet. And the betting on people is you're trying to judge their character all the time. So Buffett says that before he invests in someone they have it's it's integrity is the most important thing then intelligence then energy he says if you don't have integrity and you get someone high energy that's a really bad deal don't do that but basically integrity is the most important part Elon says it's the heart that makes him you know >> is there nothing that Elon has done over the last uh 10 years that you've been invested in Tesla and now SpaceX where you've said to yourself, "Okay, I really like the guy. I really think he has the potential to change the world, but some of these character questions are now tougher for me to answer." Or have you been able to look past the stuff that the media seems to be consumed with? He tweeted this, he said that. Like, what's your what what's your take on the the public persona of Elon versus Elon the business manager? Um, I I I think he really does have a big heart when you think about someone who works or sleeps four or five hours a day, works seven days a week. Um, and if you're worth a trillion or three trillion or five or 10, what difference does it make? And so why are you doing that? And you're doing that because he wants uh humanity to survive and he wants better lives for everyone. The things that he's doing. So normally uh the stock market on our economy double about every 10 years. They make about 2 or 3% a year of real growth and about five four or five% is inflation. So 7% a year growth means you double the economy and double the stock market about every 10 years. The value of money falls in half about every 15 years. four or 5% inflation. Uh so you have to make twice as much in 15 years just to stay even. So what he's doing is that he thinks that with all of the innovations that he's bringing to bear that he's changing everyone. So we think we're changing the lives of people we who with whom we do business. He's changing everyone's life. And I can't even imagine, you know, so growing up what I thought my life was going to be and what my children's lives were going to be and for Michael and for his children and their children. Uh I I can't imagine what's going to happen. He thinks the growth of the world economy of the United States economy is going to instead of doubling every 10 years, he thinks it's going to grow 10 times every 10 years because of what he does. He thinks there's going to be, you know, generational uh change. There's going to be uh guaranteed incomes that people will have and he's going to try to find uh the truth in the truth and the universe. So, what he does is that he has asberers and he was on uh on CNB on on uh what is it? >> Saturday Night Live. >> Saturday Night Live. And uh I gave him a couple jokes and I don't know if he used them. I I think he used one of them. And and uh but when he was there uh it was just you know he said I got asberers and so he's he's a different kind of person. He's the most brilliant engineer on the planet obviously and his vision other people don't have. Nobody thinks about the things that he thinks about. And all these things he does, they all tie together. They all somehow fit together. So you always say, "Gee, I wonder did he ever think of that before he bought that? Did he ever think?" But he's always uh you know trying to to to make everyone's life better. And so all those people who are investor who who work at SpaceX, they're all shareholders of SpaceX. Gives everyone shares. So he wants everyone to participate. Well, we said this earlier this week. Michael and I were talking and I'm pretty sure, I can't prove this, but I'm pretty sure out of every CEO of a publicly traded company, Elon has probably created more million millionaire households. Like, I'm I'm trying to think if there's anyone else, >> maybe Bezos. >> Maybe Bezos, but I'm not sure. Uh because I think the average Tesla employee is probably a higher compensation than the average Amazon employee, but that's not science. I'm just making it up, but I I think between investors and employees, it's got to be Elon Musk. >> I'm sure it's the case. >> Do you think that it's just like the the the uh a lot of the things that people either criticize about Elon Musk or more about style than substance? the way he speaks, the way he handles questions on conference calls, the way he uses social media, and a lot maybe a lot of the things that uh people criticize are really just he's a very different differently behaved person. >> Well, he behaves differently. >> Yeah, >> he's very political. Um he Yeah, I suppose. Um and and if I were, you know, there there's things I I I think that the way he should have gone into the government in my opinion was that it would have been better if he said um in my opinion uh that you know what we're going to do here is we're going to make the government more efficient about the way we issue contracts. We're not going to have cost plus contracts where people are incented to take longer and cost more. We're going to do it for fixed bids. In fact, that's what they do now with defense department now too >> with with with SpaceX. Uh everything for us is fixed fixed price uh and and price is better than everyone else and better quality and delivers on time and stuff works as opposed to not. So he should have been holding himself out as I am a builder. I am the best builder on the planet probably. So when other people take two and three years to build a data center and cost them 40 or 50 billion dollars uh then we build it for a gig uh then we build it uh in six months 122 days. Six months we build it and it cost us a fraction of what it cost them. But we build, you know, Elon thought that there's going to be a short supply of compute. Uh, and he thought that was the limiting factor for all this AI to be effectively working. The LLMs will be working. So other people, Anthropic goes from $9 billion of annualized revenues uh to 45 billion in six months. Uh, and there's a three or four year old company who Elon trained him and ChachiBT. Uh, Elon trained him and so >> Dario and Sam both have that in their family tree. >> Right. Right. >> And and and so uh so he left uh you know and and and Grock got started. >> Right. and and Grock is so far behind, but within the next probably five or six months, uh then we're not very far behind anthropic right now. And and I think that within the next six months, uh we will catch them and be equal. A lot of tests were almost equal right now, but when you're buying stuff from Grock, it's 65% cheaper than Anthropic. 65% cheaper. So, you know, >> use of the model. >> Yeah. So, so if you use our model, you're going to have it uh significantly less fewer tokens than if you're using a Gro and you don't Yeah. Anthropic. So, you don't really need to use as much as they are with uh with anthropic. >> What did you What did you see in Tesla in in 2014 that the rest of Wall Street didn't? Because that predates all of the the models. It obviously predates profitability. It's it's a fairly early stage. I think the IPO was 2010. >> U very little coverage on Wall Street. I know Adam Jonas was writing about it and uh I don't think any asset manager had come in and made a big bet on it. So you were probably the first. What were you why were you able to see more of the future than everybody else? >> Can I jump in for one second just to clarify? We weren't the first and and I don't think we're ever necessarily early on things. You know, we we we met Elon on the IPO. But we had a very small stake right uh due to a private equity investment. >> This is 2011 10. Okay. >> And we spent a lot of time with him, a lot of time with the management team. Took us around four years of of diligence on the company, diligence on on him, what makes him tick, what is he trying to achieve? And at the time, what were they doing? Around 30,000 vehicles a year. >> Yeah. >> Something in that ballpark. Uh one facility over over in uh Fremont, over in California. And we didn't spend time talking about, you know, what are you doing in this one facility or or or or you know, how many vehicles you can actually do in this this one place, but what are they trying to achieve? And and one of the things I noticed in the first one of the first visits is there's a big mission. You know, my dad was just speaking about what our mission is in terms of changing lives. And Elon has a mission for all of his businesses. you know, the and the the mission over at Tesla was to drive humanity to I'm I'm probably butchering a little bit, but drive humanity some kind of renewable resource from energy perspective and nothing to do with with with with vehicles, nothing to do with transportation. It it's, you know, doing good for society, changing us to to a better uh way to consume energy. And when you understand that he is going to be a lot more dynamic than a single business, that's what kind of got us excited. And all of our questioning was really about that. You know, how do you become this much greater business and and what Elon's famous for doing both in Tesla now doing kind of the same similar playbook over at SpaceX. It's about vertical integration. So all the prior automobile companies was about outsourcing. You know, get your seat belts from someone, get your airbags, your wheels from someone else, and everyone takes a little bit of margin. >> If you really want to change the world, you need to do it yourself. You need to drive down costs as low as possible. Um and and he's able to make vehicles now that others cannot possibly uh catch up to. He can and and and I think that Tesla is on the cusp of really transforming itself from a hardware company, you know, selling a selling a box on four wheels, earning a earning a one-time profit to a software company. You know, basically selling the mile. >> So, but while you're invested in it, all of the car people are telling you you're going to lose all your money. It's a zero. So, must have been difficult to tune that out. >> Right. But it's four years. >> Maybe you didn't tune it out. Maybe you you looked at that and said, "They don't get it. They think they're covering a car company." >> Yes. Exactly. Um it took four years of of constantly questioning. He was at our conference last year. Two years ago. >> Um >> last year three [clears throat] times >> and we were talking about that kind of thing. And he says, "You know, what took you so long on me?" Uh you know, doing all that diligence. Where was the hold of I'm like, Elon, you know, look at you. [laughter] You know, he's this crazy guy. You know, I remember you always describe him in the f one of the first meetings coming in unshaven and then uh you know, a different kind of character. Uh but really need to get comfortable on the person, you know, what's motivating them, who they are, what they're trying to achieve, and then trying to independently verify whether or not they can successfully do it. >> So, um Ron, you've done this before. There's a there's a an anecdote about uh Steve Win and being an investor in win resorts for decades or you know just like being able to see through short-term volatility and this is another case where I'm guessing you're betting on the jockey. You're betting on the person as much as you're betting on the the company. um you talk a little bit about some of the similarities between the CEOs who have delivered the most value to you to the Elon Musk situation. So we have um our portfolios are uh you know balanced out where we have 25 30% is invested in companies like SpaceX or like Tesla or like uh uh Nvidia and then uh and then we have the rest of our companies invested in companies that might be valued uh relative to book value, relative to cash flow, relative to earnings per share that are at least doubledigit returns But more consistent, you know, it's not in the sky. It's >> like more convention, more conventional investments. >> Right. Right. >> And uh and it could be hotel companies. It could be an animal hospital company. Uh it could be uh a healthc care uniform company like Figs, which I love. Uh it could be uh a company that uh owns real estate uh like Veil Resort. >> Yeah. when after all when people don't need to work anymore they're going to need to do something. So >> okay >> Ron so most stocks are garbages. Most businesses suck. Henrik Bessenbinder has this famous study where he compares what are the lifetime returns of businesses versus the stock market versus inflation versus cash. And here we go. Just 27% of stocks kept pace with the valuated with with the stock market. which is 27% of stocks meaning 73% lose versus T- billills only 42% of stocks over their lifetime beat treasuries only 48% delivered a positive lifetime return. So it's basically a coin flip of these companies are even going to make money for their shareholders over the time of their listing to the time they die or acquired or whatever. And then the median stock lost 7% over its entire lifetime. So most companies are trash and are not worth investing and certainly not buying and holding. And yet you guys have found a way to buy and hold stocks that have done the opposite that have generated astounding returns. Astounding returns. So I'm curious when did you have this insight? Like how did you know that the money was made by waiting? Because that is extraordinarily difficult. Josh mentioned you held wind for 27 years. It's like unheard of. So, how did that insight come to you so early and how are you finding the stocks that actually are worth buying and holding? >> Well, we do research, but some of it a lot of it comes from my background uh growing up. So, my dad was an engineer for the army and uh I would always ask him and and when I was 1942, he was making $2,500 a year. And then when I was bar mitzvah in 1956, he was making $10,000. And I would ask him all the time, "Are we middle class yet? Are we middle?" And that was when we got to be middle class in 1956. And uh and I noticed uh was couldn't miss it uh when I was growing up that so we lived in a small house and my friends lived in larger houses and they drove Cadillacs and we had an old Ford and uh used cars all the time. And and I was wondering how'd that happen? And and what happened was that they owned a business or they owned a motel or they owned rides on the boardwalk uh or they owned a legal practice. They owned something. They owned it. Uh and uh so so it always made me think about uh you you know owning things is make money. Then my friend in Aspberry Park, his name was Mark Masser. His dad had a real estate business in Ashbury Park and I'm talking to him one day and I'm I just had $1,000 for my boy miss saved up and um and he says you need to invest in the stock market. I said what's a stock? And and he explained to me that it's the easiest thing. you buy something and it's 10 times earnings and they pay you a dividend and every year it becomes more valuable and you don't have to manage it. Said, "Well, that sounds pretty cool." So, I go to my parents, my dad, and say, "I'd like to invest my thousand dollars in stock market." And he said, "Well, uh, I've never invested in stocks. I don't know how to do that." But if you can show me why you know enough to be able to do that, I'll open an account for you at Meil Lynch. I said, "Okay." Uh so I started going after school and reading these reports and then um my savings account was at Mammoth County National Bank in West Alenhurst and it was Alenhurst and brick red brick building the state center was in the top floor pillar building looked substantial and um uh and and you go with your passbook savings account every three months and they stamp in how much interest you made. And so, so I go there and I read a report about him and I said, "I'd like to put my $1,000 into Mammoth County National Bank and this is why." And he said, "Okay, you can do that." And so I bought uh 100 shares at $10 a share and and uh with account at Meil Lynch and uh and then from that point every day the Aspbury Park Press listed the local companies and their prices every day. And so every day I would look up Mammoth County and maybe 15 local companies. >> You remember the ticker? >> No, I don't know. I don't think there was a ticker. I don't know. [laughter] But but but but uh every day the stock I would look at the end of the day and every day it would be 10 10 and an eighth 10 and a quarter 10 and 316 just every day it went up for like six or seven months and then it got acquired at $17 a share and I said >> oh my god >> said I could do this my thousand became 1700 that was you know twothirds of my first year's college >> and and I said wow nothing to this I can do that and so that's how I became interested in investing but it was the idea about owning something and then after I became an analyst in 1970s and did research and sold it to all these institutions and hedge funds and you know Soros is a client, Peter Lynch was a client. Uh, so I had all all of these clients and uh and and every time and my stocks in the 1970s were McDonald's, Disney, Nike. Uh uh and Ken Langon calls me up one day and he says uh he says, "I see you're buying uh a company Dalon." And I said, "Uh yeah." And he says, "Do you know who I am?" I said, "Everybody knows who Ken Langon is." Yeah. And he says, "Uh well, I'd like to have lunch with you." And so we go to lunch at the at the bull and bear at the Waldorf Historia. >> I remember. >> And and I walk in. He's much bigger than I am. And he puts his arm around me and he went to Bucknell just like I went to Bucknell and puts his arm around me and he says, "Guys like us, we got to stick together." And I look around and see if there's someone else he's talking to. He's talking [laughter] to me. And so, uh, so we sit there and he says, "Look, uh, I'm buying Dalon and I think I'm probably they've just come out of bankruptcy and they owned a company, uh, there was a a home improvement company called Handy Dan in California and it was uh, Arthur Blank and uh, um, the other guy uh, were were uh, running it and uh, I was buying it because of them." And and he says, "I'm buying the same thing. I'm buying for clients, he's buying for him. And so, uh, my my motus operendi is I buy a stock, goes doubles or triples, I say buy this, sell this and buy this. So, I get two commissions instead of just one. >> Right? >> So, stock doubles or triples or quadruples and oh, so we share. He says, "Anything I see, I'll show to you, and anything you see, you show to me. We'll split 50/50." Said, "Well, why beat each other up?" I said, "Great. Let's do that." And so we do it and I buy stock at $2 a share and it goes to four, five, $6 a share. I say, "Okay, that's enough. Let's call my clients and get them to sell it and buy something else by Federal Express." And and uh so so we do that and then uh these guys at Handy Dan get fired by the head of uh uh the company Dalon San Francisco. And uh then they go to Ken and Ken raises the money to start Home Depot. So basically I could have invested in Home Depot at the very beginning but I had already sold and so I was gone. >> Well, you got Tesla. >> But so I I started in the business in the same way. The the goal of the firm, the brokerage firm, they told us this is the first thing they told us. We're not in the storage business. We're in the moving business. So, if you were right on a stock almost by accident, the the first instinct is great, I'm going to get two and a half% commission to get out of this. >> Yeah. >> And it just so happens I have another stock that the client should buy right now because they're liquid. And that was I mean that was the way. So, you had this insight that I want to be an owner. I want to own businesses. That's the key. And it dates back to what you saw when you first became aware of money in in in your childhood. And the other thing I always thought about was inflation. And so my parents' first house, so when I was born, we lived in rooms in a home in uh in Redbank, New Jersey. >> Mh. >> And uh and then uh 19 and then we moved to uh Bradley Beach. And then uh 1948 um and we live on top of a garage. And then 1948, my parents bought their first home and people were coming back from uh from the war. And it was $5,000. $5,000 for a 2,000 foot home. And uh and then uh they sold it in 1955 uh for $10,000. That house is now worth $500,000. And then uh they bought another house or built my dad built a house in 1955 for 20,000. That's now worth a million half dollars. >> Wow. >> So basically that happens to be four, five, six% a year. That's what that is. And Michael and I were just talking, we were coming over here and we were talking about land on the ocean. So everything goes up four or five% a year in price except land on ocean that goes up 78% a year and uh or 9%. And I was describing to him how uh some people that not very far away from us uh three or four houses away where Edgy Inlander lives actually two houses away from me in the h in the Hamptons uh that house uh a man comes to visit us in the Hamptons and he's making vials for drugs and he wants us to invest with him, you know, smaller vials and he says oh Ron I lived 12 acres three houses away from you. Uh in uh when my my my parents had a dairy farm and the dairy farm was uh uh the reason we had it there was that it was uh 100 more than a 100 miles from the center of New York City. Yeah. >> And that was important because and that was measured from Columbus Circle. And that was important because if you're more than a hundred miles from the city, what happened is you can sell milk to the government for a$110 a gallon instead of a dollar a gallon. So that's how come they have that's how come they had the land there. This 14 acres or 12 acres on the ocean, >> right? >> And uh and so uh so we're talking for that. He says, "But you know, we sold our land um a long time ago uh for $250,000. that land is now worth >> $80 million now >> between 150 and 200 million. >> Yeah, I bet. >> And and so I was describing to Michael that that what that means is that happens to be in 80 years that happens to be 10 doubles. So 2 4 8 16 32 64 128 256 500,000. So a thousand times. So So basically, you know, whatever you had 80 years ago, 7% a year is a thousand times more today. Wow. >> So, so that's the that's the math. And so the math is if you have
something that's unique, so we're investing in businesses that are unique with people whose character we admire, uh, and we trust. And, and, and to you know, if if Elon does things, um, you know, who am I? You know, we're not active investors who I'm going to tell him how to run a business or what he should be doing or how we should be acting.
Let me discuss this. Both of you can answer this. So, one of the benefits of ownership is all of the upside, as you've laid it out. Tremendous upside to growth. When you're doing 8% a year over 30-year periods of time, holy [ __ ] that's a lot of money. One of the downsides of ownership is you get all the downside. And so, I'm curious how both of you can answer this, how you manage your emotions. So, on a day like today, Tesla is getting the ship beat out of it. It's down 16%. The stock is where it was in August 2025. It's where it was in November 2021. And obviously, this is not the first time, or second, or 100th time that you guys have experienced something like this, whether it's with Tesla or any other monster winner. This is the price, right? No pain, no gain. But on days like this, months and quarters and years like this, how do you, how do you stick with it? What gives you the confidence to say, "We're not leaving. We believe in this, in this vision."
Sure. I'll take the first stab at that, um, on an individual basis. It's very hard to own a stock. It's very hard to own a company if you haven't done the first primary research. And that's what we pride ourselves on, really understanding the business behind it, not really what's happening on a, on a day-by-day basis or a quarter-by-quarter basis. Additionally, owning stocks as an individual is very volatile. You know, you're going to have multiple times like this when all of a sudden something comes out or an earnings report comes out, uh, whether it's SpaceX last week, you know, all of a sudden had a flight not exactly work, or they, they, they scrubbed it and you try again next week. Um, and the impact that has on the stock and, and, and, and what it does, uh, to individuals if they actually just own that one, one security. We want to own stocks in a portfolio where you have different companies that act differently in different market environments, and we really pride ourselves on exactly that. You know, not having a whole portfolio of the Teslas and the SpaceXes when all of a sudden there's this quote unquote risk-off environment. They all move together, and that's what you're kind of seeing right now in the market. The S&P 500, it's no longer 500 companies. It, it's seven or it's eight. Um, eight including, you know, the MAG seven. I like to call it the MAG 8 at this point with, with, with SpaceX. It's obviously not in the index yet, but, but eventually it will be. Uh, the Russell 1000, same kind of thing. You know, very concentrated and, and highly correlated investments. We're growth. We're only growth. You know, we want to do one thing extraordinarily well. That's find these growth, uh, oriented businesses, but they need to work in different market environments. You know, we're talking, we're, as, as a firm, you know, people think of us as, okay, well, you're going to be completely overweight it technology kind of investments. We're not.
>> Discretionary.
>> Yeah. We're, we're, we're actually underweight.
>> The whole market is overweight tech. So.
>> Even, even if you were 30% waiting, you'd be underweight.
So, Michael, your answer makes perfect sense from the portfolio manager point of view. I'm just as a person. Like, are you, you have, you guys have billions of dollars in Tesla and the stock is down 16% today? You're a human being. I imagine that like tonight's going to be a little bit rough. Like, you going to lose sleep over this? Like, how do you, how do you manage your emotions through stuff like this?
I mean, I, I used to, I, I used to, you know, like you said, it's not your first time having a, having a, a down day. Um, first time I had a down day, yeah, it was real tough. It was probably a tough day, tough week, tough month.
A lot of managers when they get into a position, they'll say to themselves, "If X, Y, or Z happen, I'll be wrong and I'll exit the position." It doesn't seem like you guys, uh, go into a position already thinking about what could go wrong. Um, it seems like you guys do all that due diligence, spend all that time with the CEO, and you just say to yourselves, there are going to be good years and bad years, but this is a company that's mission-oriented and we're going to stick it out, and there's probably very little that can change your mind.
Not that very little. The, the reason we would sell a position isn't on timing. And I think that's where the market does. You know, all of a sudden they say, "Hey, is this happening now?" And you're kind of seeing that with, with Tesla. How much are they going to be spending on, on capex? How much, uh, you know, they're getting on the, the robo taxi and how, when's that going to come to fruition? We're, we don't care about timing. We, we care about is this still driving towards what they think we, we can do longer term. And the biggest area that we would sell something is if that competitive advantage deteriorates. You know, people think of us as, hey, you're, you're growth. You only care about growth. Growth's the easiest thing I think to kind of identify. The harder aspect is understanding the people who are running the business and understanding his competitive advantage. Why can other people not do what they're doing? Um, and we feel that in, in Tesla's case, robo taxi, cyber cab will come. Um, it might be pushed out a quarter or two, or even a year. That's okay for us. What's, what's interesting about Tesla now to me, maybe I'm seeing this wrong, >> the competitive advantage they had in EVs, it's not as strong today as it was five years ago. The Chinese are very serious, uh, with EVs. Um, but now if you're an owner of the stock, you're talking about Optimus and you're talking about robots, and Tesla probably has a bigger advantage there than in anything they've ever done.
Remember what I said earlier? Their mission was never about transportation alone. It was about being in and getting us to renewable energy, going into renewable resources.
So they can make 10 million robots a year though, out of, uh, I guess out of Texas. No one else can do anything near that. So like they, I almost would.
He's not talking about 10 million. He's talking about 100 million, and then he's talking about a billion.
So is that how they tend? But so nobody's going to do that. They, they.
No one's going to have any, no one's going to ever do anything like his robots.
Yeah. So, so if you think about how you're able to withstand a share price going down, is that the all the price does is tell you what you can buy and sell a security for in a given day. It doesn't tell you if a company's doing well or not.
You guys aren't getting signal from the fact that the stock is up or down on a given day.
Don't give signals. They just, you know, there are guys who trade and systemic investing. They trade and they make stocks go up and down. They follow the leader down. They follow the leader up. You know, that's not what we do. We try to find businesses in which we can invest. You know, Henry Fernandez says, you know, Ron, uh, what you guys do is you have an ability to see around corners. You know, you can look long-term. Our time horizon is five or 10 years. Other guys are going to say, gee, I understand you're going to make all these billions of dollars of investments, right?
Uh, but, you know what? If I don't perform today, I'm going to get fired. I'm not going to be around for that in 10 years. So, but we can't get fired. We own the business. So basically, uh, the way, and we're the biggest investors in our, in our funds, and the money that we manage. We're the largest investors. And so like 11, 12% of the money we manage is ours. And, and, and so which, considering that was minus $15,000 in debt [laughter] is pretty cool. Um, so, so the idea that we have though is that you're, uh, you know, it's a time, how we think about five and 10 years horizon, and we think about what makes one business different than others. So think about, think about SpaceX. Um, so here he comes along. This is a cool story. He comes along and he's the founder of PayPal, and Elon, and, uh, and then when, uh, he has the idea, then, then his partners want to sell PayPal. Wasn't a good sale, but they sell it, and he gets a hundred or $1110 million, uh, for his share. And so he doesn't need to work anymore at that point. He's a very young man. And, um, and so he goes to his wife and he says, "You know, honey, um, I think, uh, I would like to, uh, uh, spend the rest of my life. I want to have rockets that you can use over and over again like airplanes." And, uh, she says, "Oh, okay." And, and, and he says, "And there's a good chance I will not be successful, and I could lose, you know, everything." And she says, "Well, Elon, we have six children. Uh, what will we do? Where will we live?" And, uh, and he says, "Well, your dad has a basement. We can live in the basement." That's, that's commitment.
And then when, when you think about, uh, what he's done, so then he says, "Okay." And goes to visit, uh, President Putin, and he wants to buy rockets from Putin. And so he goes there and he spends a week there and meets with Putin every day. And, uh, and, and, and, uh, Putin, it's obvious after a while that Putin's giving him the runaround. So he says, "Uh, okay, Mr. President, thank you very much for your time. Uh, but I think I'll be able to do this by myself." And so Putin looks at him and.
>> Build rockets by himself.
>> Build rockets and make them return and land again. And Putin says, "Well, Elon, how are you going to get these to orbit with [snorts] a slingshot?" And so, and that was it. That was the end of the conversation. Elon goes and now it's several years later, and, uh, and we have the first rocket going up and coming back and landing, and it's a very emotional moment for him. And all the cameras are around. They come right up to him and they say, and, and he looks into the camera and he says, "Some slingshot [laughter] for."
>> Right.
>> Uh, but I mean.
>> It's an inside joke for him and Vladimir Putin.
>> Right, right. Okay. And, but it's.
>> Always good to have inside jokes where.
>> So, but, but the idea is that the way we invest is that it's, this is not a one-time thing and then done. We're constantly talking to companies every single day. I talk to companies every day. So is he. Every day you're talking to companies every single day. And my wife says to me, "Ronnie, I don't why are you doing this? Why are you working this way? What, what is the matter with you?" And, and what I do, my life is so interesting to meet these people and speak to them every day and explain to me how their business operates and explain to me what's different about what they do compared to what everyone else is doing. Yeah.
And I say, man, and it strikes the bell. And when you're talking to someone, you say this, you know, why didn't this rocket work right? Why didn't it work? What happened? How come the landing, uh, strip, you know, the, the platform blew up when, and was destroyed? Cost $500 million. How come that was destroyed? What was the matter? And why, why does a landing strip, it's just cement? Why is that so complicated to build? $500 million, and why do you have to build them all around the world? And why do you have so, so you just keep asking questions? And I was speaking to the CFO for, uh, the launch business of SpaceX, um, I guess a couple weeks ago, and she told me that, um, a long time ago, she told me, "He speaks to me more than anyone else." I talk to her every month, couple times, three times a month.
Um, and she says, "I talk to you more than anyone else. Maybe even one of my husbands." [laughter]
Yeah. Uh, and, and the way I talk to her, she's in California, and what I do is that my wife says, "You know, you don't need to work at home." And, and so what I do is she goes to sleep, and then midnight I get up and I go to talk to my late in California. [laughter] But, but she says, "I like talking to you more than other people because they're just interested in, in, in now. And what you're interested in is what you describe to me, what you're, what, how things work."
So, you guys obviously believe deeply in your bones about what you do, your mission, right? It's apparent. You believe it. How long did it take you to train your shareholders to come alongside with you to endure the ups and downs of the businesses that you guys are investing in for years and decades in some cases?
I, I don't think there's necessarily as much volatility in, in our portfolios as you would suspect based on the fact that we are growth equity investors. We're not just Elon Musk, just this, the SpaceX tech of the world. As I was describing earlier, you know, we have these different buckets in the portfolio. Empowering Partners Fund. It, you know, in, in good times, we, we do well. Uh, we keep up with the market and do a little bit better. But I think where we really earn our stripes is in the more difficult time periods in the economy. When, when tech's out of favor, when growth's out of favor, we're showed that we're able to protect investors over the course of an over of an entire cycle. Not in any one given quarter, not any given year, or even, you know, these random one, three, five-year periods. But over the course of of a down market cycle, we've shown that we protected investors. I think one of the worst times, you know, obviously in, in our history, maybe the United States history of investing, uh, was the dot-com burst through the Great Financial Crisis, where had you invested in the market, you lost about a third of your money.
Had you invested with us, we advanced one and a half, 2% annualized in Baron Partners Fund. I'm not sure the exact number, but something in that ballpark. Yeah.
So, you grew 12, 15% >> while the market went down by a third over that, whatever it was, 9, 10 year period of time. You can't come back having lost a third of your money. And you have to have these, these different kinds of of of buckets and and performance, uh, companies that perform differently in different environments. And like I said, you know, you have Baron Partners Fund or concentrated portfolios that have these, these investments with these, you know, big open-ended growth opportunities, but so many of our other portfolios give that balance and balance to our clients and to our advisorss that, like I was saying earlier, if you just buy the S&P, if you just buy the Russell 1000 growth, you're buying seven companies. You're, you're not getting real diversity. And something like we have a Baron Generational Growth Fund, which has lagged over the past, you know, few years because it doesn't own that, it doesn't own this very small section of the market, these big gener, the big, uh, growth ideas, but it has nice steady growth businesses, and the fundamentals of those businesses continue to do well, and actually are an inflection point in improving, yet the sentiment is, we're only going to have seven companies in the future. It's only going to be AI companies doing everything. We're not in, in that mindset, uh, and, and it's not showing up in, in the results of these businesses. The companies are doing better, and, and the valuations are incredibly cheap. You know, 50% off of their highs.
You own some software stocks, right?
Yeah.
You, so you guys are optimistic that some of the AI fears are overblown.
Way overblown if you have something that is proprietary.
>> Such as AI should be an enabler to these businesses, not a, not a.
>> Proprietary data. Msci.
They have proprietary data. They're spending a great deal on, on, on people to gather information to provide to hedge funds, for example. They have, and there's also going after private. No one's done that before. So.
You guys own FactSet too?
Yeah. Um, FactSet is a really interesting story.
Market hates it.
Yeah. We have been, so in the past year, we bought $9 billion [clears throat] worth of stock, and about $5 billion, uh, has been in software companies. So five billion out of nine, uh, for software the past year. And, uh, in fact, then, uh, we have been investor for, uh, a very long time and did well for a long period of time, and then in the past year, the stock has fallen from 500 to 200. It's now 250, and we've been buying it. Has the companies been buying it? So the four or five companies that we've been investing in are software. The companies have been buying in like crazy, and we've been buying right along with the companies, and, uh, and the narrative is they're not going to exist any longer. And the person who is really interesting to me, uh, who runs, uh, FactSet now, replaced the prior CEO who we hadn't had good success with for probably three or four or five years, and, so was vulnerable. Uh, this guy, so he grows up on a farm in India, dirt poor, figures out how to go to the best technical school in India, and goes to the best, uh, uh, you know, business school in India, and then gets recruited by, uh, um, McKinsey and Company. And then the financial crisis hits in, uh, 2008, and McKinsey says, "We'd like you to come to America and to be an advisor." He's 31 years old at the time. "We'd like you to come to America to be an advisor to Tim Gener, right off the farm in India." [clears throat] And so he comes to the United States. He works, uh, for Gener for a year or two. Then Morgan, then then Price, then JP Morgan recruits him, and he works at JP Morgan, and he becomes one of the top candidates, uh, to, uh, to succeed Jamie Dimon. He's now 52. It becomes one of the, the prime candidates, probably in the top 10. They say, "Well, look, you're in the top 10, but you didn't make the top five." He says, "Come out of here." And where does he go? FactSet. So, I tell Michael, say, "This is a really cool company. It hasn't been especially well managed for a few years now, and now it's like a junior Bloomberg, but we got, uh, the big company in the industry is Bloomberg, and they got some vulnerabilities, and we get some special things. And now we drop in this new guy who is unbelievable. We weren't allowed to speak to him until we took his position." And so after that, we spent a bunch of time with him, and he even called me from India. He calls him from India when he goes to visit his family. I mean, really, really good guy. And then of the 11 top executives now at FactSet, eight come from him. And now he's describing to us how all of the services that he's providing are getting embedded in the, uh, in the workflow of the clients that can't be replaced. So basically, he's talking about the data that he has, the relationships he has. He says, "The people in the big companies, they didn't even know who he was." Uh, and, and, you know, they, you know, they were just paying the bills or whatever. And he says, "Well, when we have something that's a commodity type of, uh, service, then we give it to them for really low prices, but that gets us the entree to give them something that they really need for their business, uh, they can't get somewhere else." So, so we find, so whether it's Barris, who has all this insurance data, or whether it's, uh, FactSet, or whether it's Gartner, who has, you know, thousands of of analysts going out and create this great library. So we, so there's companies that have something special that get well, there's no way they're going to exist. That's all going to get replaced by by AI.
Think the LLMs end up having to pay them for this data.
They're enablers of AI.
Okay.
I like, I [clears throat] like that argument. Uh, a lot of people have given up on it because these stocks seem to have no, these stocks seem to have like no one who's willing to come out and say, "No, you don't understand. There's nothing Claude can do if they're not working with this proprietary data set or that data set."
Well, a lot of the information that these companies have or arrangements that they have with Claude. Yeah.
And all those LLMs, uh, they're going to be be commoditized. Uh, and they're all going to, you know, describing before how Grok is 65% uh, as, uh, you know, cheaper than, uh, than Claude.
Yeah. And not as good so far, but it will be. But we got compute. And when we invested in compute, SpaceX did, uh, when we invest in compute, uh, when other people are investing in the LLMs, we can catch them in LLMs. They can't catch us in compute.
And when we've invested in, uh, in Mississippi, as I mentioned before, that was for 25, 30 billion dollars. And we got, we're getting $1.25, 25 billion dollars a month from, from, uh, Anthropic, and getting $900 million a month from, uh, from Google, and I think we're getting about $500 million a month from someone else or 250. So we're getting almost 25, 30 billion a month for something a year rather for something that cost us 25 or 30 billion to build. To show you how scarce it is, we're getting, uh, three times what CoreWeave would get for the same amount of compute. Three times. Why is that? Because we got it. No one else has it. And also our compute is different than other people's compute because it's coherent. Because it's all together. And when it's all together, that means that that it makes each other more powerful. The other thing really interesting about my job, which I told Judy, I said, you know what, that so here I am, I'm 83, and it's still like feels like I'm in college. You know, you get to. And so is.
>> Still learning as things change, keeping pace with it.
>> Every day.
Okay.
Mike, you like having your dad around at work? [laughter]
Um, most days.
Uh, no, obviously he's been incredible to, to learn from at an extraordinary young age. You know, I, I joined the business in, what was it, late 2004, so over 20 years at this point. But I, I jokingly say, you know, my training started probably when I was five or six years old, half jokingly saying this, you know, we would talk about investing, um, from an extraordinarily young age. Never about, you know, what's happening in the stock market, never what's happening in the economy or from a macro perspective, but about companies, what makes one company different, unique, special. And, you know, he gave me that train. He made it fun, made it interesting. I never, people say, you know, were you forced to do this? Um, I don't know. Obviously, it was his grand plan to get both me and my brother into this, but wasn't forced. Uh, but he did make it extraordinarily interesting and, and something, you know, so he obviously trained me, trained my brother. But one thing that he doesn't get enough credit for, I think, is [snorts] obviously he gets credit for being a great investor and building this business, but the people that he's brought into it. You know, so we have what, 45 investment professionals at Baron Capital. Each and every one buys into it, buys into what is a Baron Capital type investment, what is a Baron Capital type portfolio, what makes a company, you know, for us, what makes it special, makes the growth, what makes the people, all those kind of things, all those kind of questioning. So, so we're not a factory. We're not, you know, producing widgets. Um, but it's the people that we have here who get to that right answer more often than not. You know, I, I think that COVID was a tough time for us. You know, it was a tough time. We obviously, I don't know how well we would have survived COVID if it was five, 10 years earlier, if we didn't have the technology to, to, you know, enable work from home. But work from home sucks because you're not with people. You're not with us. That, you know, we have companies come to the office non-stop, and we go see them non-stop. It's never one person in the meeting. And the bad thing about Zoom and COVID was, you press that red button and the meeting ends. You know, we have that hour-long, hour and a half, two-hour long meeting, and then we spend just as much time with the other analysts there to understand, do a deep dive on on what just happened.
A lot of the good stuff happens outside of the official meeting.
Yes. Um, so, so it's, you know, it's my dad is the founder, he's the philosophy, he's all that, but he's training everyone else here to kind of think about investing in this same way. And as you were giving our stats earlier in terms of what percent of our portfolios, you know, beat the index, which is obviously very hard to do, but not just beating by a little bit, top quartile, top 5%, top 1%. It's not just Ron Baron, but it's him, you know, permeating all these different portfolios in terms of how we think about investing over.
I'll let you guys go. We have two, two more things. Baron AI.
I got, I got one more thing. How many more do you have?
Uh, two. And the, and the conference.
Second, people are going to start losing their mind.
And the conference. I thought we have time.
Uh.
All the time in the world.
Well, so let, let's do the conference because I'm fascinated by the fact that I've never been invited to this. I, I got to get myself into the. You guys throw the, I, I would have to guess the literal best event in asset management once a year. For the, for the listeners, this is the the Baron Investment Conference. You do it at the Met here in New York City. Um, you've been doing it forever. These are some of the people that you've had there.
Uh, Pink, Josh Brown.
Pink, Justin [clears throat] Timberlake, Adam Sandler, John Legend, John Mulaney, Bruno Mars, Sebastian Maniscalco, Fleetwood Mac, Steve Carell, Steven Colbert, Seth Meyers. It's just.
How about Paul McCartney?
Paul McCartney.
How about Barbara Streisand? Uh, Celine Dion, Sting, Bon Jovi, Rod Stewart, Jerry Seinfeld.
This is the most. I'm gonna add to that. And by the way, we pay for that. There's no expense for our clients. That's 100% paid for. And not only that, but we give away door prizes every year now of Teslas. We give away. We were giving away two a year, and you have to be in your seat when you're, when your number's called. Okay? And then one year, what happened is that, uh, a young woman came, and if you don't, if you're not there, you don't get it. And, uh, and one year, uh, about three or four or five years ago, a young woman came over to me and said, "You know, I can't believe it. You called my number, and I was in the restroom, and I missed out." Um, so I gave her a Tesla [laughter]. And, and so since then, we've been giving three Teslas a year instead of two a year. But we give, and in addition to that, one of the jobs I had in the summertime was as an ice cream man. And, and, uh, and so someone came to me and the way it worked when I was, when I was driving an ice cream truck is that if you did a bill a day, $100 a day, you made $25. That was a big deal. And so I went to areas that other people didn't go to that they thought was too risky, and I was able to do that $100. And, and now someone came to us and told us about the ice cream trucks that he has, and he was an orphan, and he explained and say, "Okay, we want to invest in your business." So, so we own a couple of trucks, and now every year at the end of our conference, we go to, we have our trucks. They have six trucks.
>> The ice cream trucks pull up.
>> Ice cream trucks. Okay. At the end of the conference. So when you leave the conference, we give you ice cream. It's the best ice cream. Best cones, best ice cream.
>> I love it.
>> So for free. So, so we give t-shirts, we give swag, we give ice cream. Every now and then we'll give a book or something like.
>> So your [clears throat] mutual fund shareholders from around the world come in for this?
>> Around the world. So.
>> Yeah, so, so they get that entertainment as they, you, you just mentioned, but I was just jotting down a few of the people who who have come. Obviously, Elon Musk has been there multiple times. Gwen Shotwell from SpaceX has been there. Uh, Charles Schwab, Steve Wynn, Ralph Lauren, Tom Pritsker, Henry Fernandez, uh, Shopify.
>> I can get you guys Barry Diller. [laughter]
>> Just, I'm just saying that it's really cool. And the next one's November.
>> November 6th.
>> Okay. All right. Executives who don't speak normally at at these kind of investment conferences.
>> Because it's a very different type of investment conference. You know, we tell these guys, don't give your your canned speech. Don't talk about what's happening now and in the quarter.
>> But talk. Yeah. It's exactly who are you? How did you get into this? These are founders of businesses, you know, why, why did you want to found this business? What makes it interesting? What's the vision? Where's this thing going? Um, and have this kind of open dialogue, uh, about who these executives are. And I think that's really what people find very fascinating and differentiated about the conference.
So, so one thing I would add to that is that one year we had Michael, followed by Carlyle. That's David Rubenstein. And so, so I'm sitting on the stage and with Michael, and then Michael goes to get David and bring him across. Do you know who he is?
>> Yes, of course. [laughter]
>> And so to bring him across the stage, and he's going to give a speech. And then, uh, he's standing in front of the audience, 5,000 people. And then Michael walks back to me and says, "Dad, do you know what David just asked me?" I said, "No." He said, "What do you want me to talk about?" [laughter] Yeah. He said, "What, what do you want to talk? What is, what's going on?"
Something tells me David Rubenstein can improvise.
You can, you kind of wind him up and he goes, "But." And then he says, "Okay, I got this. I can give this, you know, who I am. How did I find, found Carlyle and what we're trying to do?" And he says, "By the way, should I be funny?" I said, [laughter] "David, yeah, sure. Be funny."
>> Be David Rubenstein.
>> He was hilarious. Totally hilarious. By the way, I love his show over on on on Bloomberg. Uh, the way he interviews people, it's a very, uh, charismatic guy. I think.
Guys, I, I want to thank you so much for your time, and, uh, it's just, it's been such an honor talking with you, and congratulations on all of your, uh, milestones and success. It's, it's an amazing thing that you've done, and it sounds like nobody is more excited than the two of you to keep doing it, and that's, uh, that's as cool as it gets to me. So, thank you so much.
Thank you. Um, where do we send people who want to learn more about Baron Funds? What's the [music] right, what's the right URL or where can they follow and get more of Ron's commentary or [music] anything that the firm puts out?
>> baroncapitalgroup.com.
>> baroncapgroup.com. [music] Once again, thank you so much, Michael and Ron. We appreciate it. All right. Cheers, guys. Listen from ours. Thank you so much for watching. Thank you for listening. We appreciate you. We'll talk to you soon. Thanks again.
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