Baron Capital, a company owned by renowned and successful investment legend Ron Baron, hosted its annual investment conference which took place at the Metropolitan Opera House in New York City last 6 November 2015. Baron Capital offers a range of mutual funds for investors. The investment conference allows fund managers and the heads of the companies they invest in to meet in public and share their views.
Baron said that his whole career is finding people who could realize degree make it happen, in which to invest and in whom to invest. Him and his mutual funds invested in Tesla Motors 3 years ago, when its stock was only selling around $33 a share. Today, Baron Capital owns 1.3 million shares valued at more than $300,000,000. He told investors, “We question everything. Questioning everything is what gives us confidence to invest in people, another tenet of our investment process. For example, we have made a significant effort to understand Tesla’s culture by tirelessly questioning its executives. As a result, it is unimaginable to me that if a car part or an assembly process wasn’t exactly right and potentially compromised the safety of Tesla passengers, that Elon Musk would lie about it.” The latter remark was a direct message for Volkswagen , which is involved in a massive cheating scandal.
Elon Musk, CEO at Tesla, was the surprise guest at the 24th Annual Baron Investment Conference which drew over 5,000 investors . At the conference Musk said, “We could conceivably go beyond half a million cars there. Long-term, I think we want to try to do several million cars.” When Baron asked him if Tesla could be as big as General Motors or Toyota, Musk replied, “Possibly, it’s not out of the question.”
Musk also made a remark that Tesla could build electric cars with 500 miles of range today, but they would be too expensive and they would have to infringe a little bit on passenger room. He thinks more practical 500-mile cars will be possible in about 10 years.
Tesla plans to launch its Model 3 in March 2016. Musk explained that he felt the forthcoming Tesla Model 3 will have similar traits to the Tesla Model S, from speed to handling to safety. Musk said, “The Model 3 will be a smaller version, 20 percent smaller, comparable in size to say a BMW 3 series or an Audi A4, but it is going to have a similar feel to the S. It will have great acceleration, good driving feel and great cargo space.”
Ron Baron remains positive about Tesla’s stock price. He told the conference, “Five hundred thousand cars a year in 2020. That’s a business of $35 billion or $40 billion a year in revenue. Say they make $6 billion of operating profit before they spend to make themselves grow larger. That means that’s probably worth $120 billion (market cap). Now market value is about $30 billion, so it’s quadruple in five years.” Last year he boldly forecasted that Tesla Motors investors will make ten times their money over the next ten years.