So Ron Baron The billionaire speaks for the first time since Elon had this really weird conference call about the earnings in which he basically said that the world is coming to an end, everybody should run and hide, etc etc. Crashing the stock price now Ron Baron comes out for the first time and talks about why he isn't selling any Tesla stock. Since you first invested, the stock is up some, 1600% Why did you first buy Tesla and why not sell it now and lock in these games now? I'm not going to take a side on the conference call. In fact I don't think El did anything wrong I thought he was a little bit Melancholy but I mean he always plays down, he under promises and overd delivers.

That's what Elon does. So I never felt any type of way about it, but a lot of people get stressed out and Ron Baron is here for the rescue. especially after Elon Musk is now worrying about the Cyber truck and the US consumer. I met Elon in 2010.

It took me four years of doing doing research before we ultimately decided to invest and we invested between 2014 and 2016. We invested a total of approximately Uh $400 million. $380 million in three years is when we were buying the stock and that was it and the average Uh price and uh, We've made about 20 times our money since then. Uh, we made uh at the peak and we've probably made about five, five and a half billion dollars in profits so far.

and I think we'll make another five times in the next seven or eight, or nine, or 10 years. So basically in this clip they asked him one thing which is Hey Ron the stock is up 1, 1600% Since you bought, you've put in 400 million, youve made 20x on your money. Why not sell your Tesla shares? You're up 20x my guy. kind of.

That's the question that they were asking. And then he goes on this very interesting monologue in which he lists all the reasons why he's not selling any Tesla stock despite what seems to be a bad conference call. what made us buy it is that, uh, he is a mission driven person. Uh, his idea was to, uh, try to convert the United States the world from using petrol to using electricity.

uh I Thought initially it was unlikely he'd be successful. That's when I met him in 2010 2014 I had become convinced he would become successful. So so basically we invested because I thought there was a big upside I thought he was a brilliant guy I still think that uh, we continue to work on our research and Company all the time. Um, virtually every week we're talking to someone there I was out in Paloalto a week ago and I was there for an afternoon and I met with two Executives who were the people who were in charge of autonomous driving and also in charge of uh of compute of when Inidia does the chips.

So what what? we're always doing. We're trying to understand how a business operates and what's special about it and why other people can't do the same thing. And in the case of Tesla we are convinced that people cannot do what they're doing and that ultimately it's not just going to be a car company. it's not just going to be a battery company, but ultimately all the other car companies which 50 years ago elected to become much more profitable.

and Outsource supplies and compute to other people. We're going to be like Intel was inside of computers. This is going to be Tesla inside of cars. All the cars are going to be used in Tesla autonomous driving.

No one else can possibly compete. I'm not going to sell Tesla shares because Elon Musk is the CEO He's the founder. He's the living breathing Spirit of Tesla and he's a mission-driven guy who always delivers and he also says, look, I'm investing in people This guy is the best CEO in the business. He's proven it time and time and time again.

I'm not going to bet against him. In fact, he said, look, we're going to make eight or nine times their money from this point on on Tesla How about that? So if you kind of translate it, what he's talking about is what? $2,000 per share? $1,500 per share I mean you do your math. But what he also said look, Elon made us a lot of money. He made our clients a lot of money.

It's not as if Elon just lost the ability to generate cash flow and create evolu. EV revolutionary products literally out of thin air. I Mean the guy knows what he's doing. He has some sort of a quality of R&D which is unrivaled.

If you look at other car companies, other energy companies, other robotic companies, they're all good companies. but the quality of Tesla R&D research and development of Tesla is rivaled who else even comes close to? Tesla Full Step driving. Autonomous driving right now is a wide open road for Tesla Literally to conquer. Nobody is even second.

There's nobody close with Miles with amount of data with quality with how close they are to actual autonomous driving. How about robotics? How about energy? How about all that stuff? I Don't want to regurgitate the same of things, but he's The quality of R&D is so much better than anybody else. So he's not only first and is leading. he's getting a faster and he's leading more and more as time goes by.

So his lead actually grows exponentially. Who's going to catch him? And even though the markets are not that good right now, Tesla is still the best in the business, Why bet against it now? He also said, look, Tesla is much more than a car company. In fact, it's much more than an energy company what he's talking about in his mind: I think is the fact that he sees FSD full set driving is the real engine for this for the business for Tesla because it says look, whether Tesla sells 5 million cars or 20 million cars, it doesn't matter. The way he sees it is that FSD becomes an industry standard much like in this example he used Intel chips became an example, right? They became a standard in the future.

Every single car you're going to see on the road is going to have Tesla FSD in it. Why? Because there's nobody comes close and they're almost done. So if Tesla is going to making so much money off of Licensing their FSD technology to every single car company out there, they're much more than a car company and much more than an energy company. They software company.

in fact, a software company with a monopoly on a very valuable service. You've invested essentially not only in these two companies in a big way, but in one man. Um, how do you account for that risk reward? You know there's something known as a keyman risk H How do you? How do you uh, think about about that bet? know? Um, when I was in Paloalto uh, they gave us access Elon gave us access to meet with the head of compute uh and also over the head of autonomous driving. and U for a half hour piece.

He doesn't want those people talking to investors. He wants them working in the business and the compute person uh his dad was an immigrant coming from Ireland and uh he worked in a kitchen and he goes to school and he becomes the Uh a computer a brilliant computer guy and he gets a job at Apple ultimately and he runs the Apple uh the Apple business Apple Compute very very important business and then he gets recruited to go to to Tesla and he's now eight years at Tesla uh running that business He says he has no turnover this everyone there who works for him is wealthy uh but there's all a a mission. So I said well so why did you leave Apple uh to go to Tesla he say Well Ron uh at Apple I had a very important role there and uh and Tim and Steve Jobs never came to visit me once. not once and for when he's at Tesla Elon comes in every you know every quarter for a couple three hours and we talk and he comes off initially with a big broad question and then he drills down and uh question he he says I can answer question first and then gets to the keeps drilling down and and he says oh my God how could he ask that question how do I not know the answer to that one? So so the basic is he says there is not another company that he's aware of where there's an engineering a brilliant engineer with a photographic memory who remembers everything and can transport information that he gets from one area to another.

So it's a brilliant guy. He cares about everything he does and he he is interested in how everything works. So U James Gman goes to visit him from Morgan Stanley goes to visit him and tells me about uh this the story about walking through the factory and stopping at every every station and him knowing the name of everyone there and what everyone does and warther. Isaacson tells me who wrote the book on Elon tells me he's walking through.

he was with him for two years and he says one example Ron because I'm walking through a plant with them and some Engineers working on on a valve that they can't figure out how to make it work and Elon looks at it as he's just on the Fly looks at it he says do this, do this and then keeps walking. They try it and it works and so everything this guy does is uh is like that. So so now how do I get comfortable with one person uh being so brilliant being in charge. this is like Da Vinci this is like a businessman.

Da Vinci If you are an individual and you are a graduate of a top engineering school, you want to work for either SpaceX or Tesla. So you want to work with other billion people, you want to work on a mission. You want to work in something that's really important. You want to work in something that you think is going to be relevant and uh and fascinating with other people like you.

And he gets the greatest people he has. Three and a half million people apply for jobs last year at SpaceX and Tesla three and a half million people 30,000 jobs. It's harder to get into getting a job at Tesla and SpaceX than to go into Harvard So they have amazing Engineers that are all you know. motivated, highly motivated to accomplish a goal.

and that's what they're going to do. so. so whether Elon there, of course it's riskier when the company's smaller than when it becomes larger. but as you get as you grow, I'm betting he's going to stay alive for at least five or 10 years.

I think that's a good bet. We'll see you got plenty of security, just switch gears. Uh, We've we've had a surge in yields. Uh, this year the FED has raised, uh, raised quickly and often to uh, fight thicky inflation.

Now we have two Wars going on around the globe. Just recently, a hedge fund Legend Paul Tutor Jones said it's really tough to own stocks here given the geopolitical risks and the US fiscal situation. Do you want to own stocks from here and and what is your outlook for the stock market and the economy right now? So so I started as an analyst in 1970 and I was in debt and living in my friend's basement. uh and I had $600 of cash and my credit was so bad that when I wanted to get a telephone I couldn't get a telephone, they said they don't want a $600 deposit.

I said if I give you $600 I won't have money to get to work and I won't be able to pay the bill every month and they said I'm sorry we can't give your phone So ultimately there was a a pay phone in the lobby and I asked the doorman to please answer the phone uh Ron Baron's residence Mr Baron's residence and so so girls will be calling and so so answer the phone and then uh, just ring me up and I'll run down the stairs and they'll think I have a butler. So that was my plan originally and so I had you know zero and uh and in fact I know Paul terer Jones from 1987 and he and I were on Baron's round Table together for several years and you know, amazing guy and he called the market crash in 1987 and that's what made him so successful I think he would have been successful Anyway, he's a really smart guy and but he's a Trader I'm an investor and so the way I look at the world is that when I became interested I Went to law school at night on A scholarship and worked in the patent office at daytime in 1960s and that was draft exemp. I didn't have to go to Vietnam uh but um uh when when I think about in the 1960s uh when Robert Kennedy ran for president the real Robert Kennedy I ran for president 1968 the GDP of our country was $800 billion. It's now 27 trillion.

So basically it's up. So in the 1960s there were assassinations. there was Vietnam there was March on Washington there were civil rights uh President Kennedy was assassinated Martin Luther King was assassinated Robert Kenny was assassinated I mean just the cities were on fire, they were being burned U because of after King was killed and uh and yet you know it feel like everything's coming apart and yet the Dow Jones was then a thousand. uh it's now 3 4,000 34 times and the and the GDP was then 800 billion.

it's now 27 trillion 34 times. So basically and that's about 7% a year growth. uh and it's about four or five% inflation and about 2% re and I happen to think that you know in since now we are to 2023 you know we had a pandemic. Uh, we have war going on in Ukraine we have a horrible war going on in Israel Uh we have uh you know inflation.

you had inflation in 1960s. Also interest rates higher now five or 6% Uh, when Vulker was there, interest rates were 18% and and you had a terrible recession. So we've had recessions and yet the Market's up 34 times. And and with no with one year of good news one year 1989 when the Wall came down between East and West Germany one year the news was good.

Every other year it's been bad news and yet the Mar. So the reason for that is because the value of your money falls in half about every 14 or 15 years. Regardless of what they tell you, we're going to have 2% inflation. Yeah for a little bit, but then it'll go back up to four or five again.

But an average, it's going to be four or five% for my entire lifetime. That means everything doubles in price every 14 or 15 years. And the way you can hedge against that is you can invest in the market which goes up about 10% a year. Know on average you know with including dividends and everything.

So the way I think about it is that the Investments that I have are investments for the long term in businesses where I think we're going to double our money over a period of time instead of it of of of 10 years we're going to try to double their money every five years. He also says look at at this point even if you think that the market is weak, the macro, etc etc etc, you're talking about the leader. So you're investing in the leader. So what's going to happen if the market goes south? everybody is kind of Wishy wasy.

They're going to get annihilated the leaders. Will Survive and then when the storm blows over, they're going to clean out house. if. remember that boat that the forest gum bought in Batra and then every other boat got destroyed and his accidentally survived.

and then he became the Shrimp King of the of the river. It's literally what he's talking about Ford GM and all. They're basically hanging out by thread if Tesla survives and they go away. Tesla makes a ton of money now.

Um, he also talks about the fact that he thinks Tesla sells 15 to 20 million cars in the future I Know this sounds like a lot, but he's talking about the way way far away future and even that is kind of insane to think about today. But look, if he's right, if he's talking about 15 to 20 million cars and 100% of the licensing Market of FSD the current valuation is way way below where it should be now. I Don't know if he's right or wrong about this. it's your choice.

I'm way closer to the opinion that he right, that is wrong. so on that. Spectrum I'm way way way closer to Ron Baron than to the fact that he might be wrong. But he also tells this interesting story about how engineering is so good at Tesla because they have literally the best people now.

the numbers are insane. For every 3 and a half thousand jobs you got 3.5 million applicants, They have literally the best people come in there. so if you already have the best technology, you have the best margins, you have the best machinery, and you have the best people. I Mean you're literally going to win.

Obviously on top of it all, he talks about El being kind of the Midas Everything he touches becomes gold and he says look, there's a keyman risk here. When he talks about this little story I believe IL is going to stay alive for the next 5 to 10 years. What is actually referring to is the keyman risk because IL is the living breathing Spirit of the company. There's a fear that if he goes out and goes away or something happens to him, the Tesla gets wrecked.

Tesla already has a self- sustained independent operation. It's not about El anymore. Obviously it's great to have him there and he's a huge huge asset for Tesla But even if El steps away tomorrow, remember, he stepped away for a whole year working on this Twitter Exting Nothing happened to Tesla I Mean Tesla has independent existence. It's not just about IL anymore.

That's a fable now. Um, he also talked about generally the market about how the market is weak right now and people projecting some you know, a horrible macro that's going to bring down the economy says look, the United States is still the best economy in the world and zoom out and you'll find out that it's always been good to investors to be in the money. I've talked about it myself multiple times: United States have the best borders, It has the strongest army. It's the world's Reserve currency for the next 50 to 100 years at minimum.

Friendly neighbors to theth South friendly labors to the to the to the north, massive resources, food and energy I Mean who's going to compete with the US economy Look, the Eviden is right now 11 straight rate hikes in a row 5% GDP and the pandemic and couple Wars And he basically said look, it's never a bad time to bet on the US economy. At worst, you're going to do 10% a year if you stay in the index at best. If you mix it up with some good choices, you're going to make 20% a year. If you you know, pick good companies like Tesla etc etc.

So I couldn't agree more every time I hear Ron Baron speak The man is on point and shout out to El for being the OG If you like this channel, subscribe. If you're not, don't subscribe. I'll see you in the next video.