Hey everybody, this is Dom Nash and in today's video we're listening to Ron Baron the billionaire investor and what he has to say about Tesla the Target price and the outlook for the company. and without further Ado let's watch the video and then I'll give you my honest response back in 2014, right? 2014 was your first purchase of Tesla So I met him in 2010. Yeah uh and uh and when I was interviewing and I say we invest in people, been on people and uh, when he was at our annual meeting last year and I was interviewing him, he says uh, well it took you quite a while to invest in me it was four years actually. So in 2010 I met him, followed it 2014 after the stock had gone up I don't know three or four or five times.

Six times At that point we started investing and we investing. Why What finally dragged you in? Um well I kept following and kept going to visit him and I finally was telling me gee, we're going to grow 50 a year in units as far as the eye can see and he was doing 31 000 cars a year, then 31 000 cars and ultimately uh, you know we had this meeting for a couple hours in Fremont and I walked away with Mike Lippert and I said man I can't believe I don't own this yet. Stock was uh, eighty dollars on their way to 200 up to 20 25 where it come public and uh then we've split since then then. yeah, you've ridden this I mean we're looking at the long-term stock you've re you rode that all the way up? Yeah, we're in it all the way down.

but then back up again. which is what we've seen this year. not quite all the way down. So we invested 380 million dollars and uh, and we made about four billion dollars so far.

Wow. and we've cashed in about a billion and a half. We sold for clients Uh, 6.8 million shares three three years ago at 225 dollars a share, uh, 15 or 20 times and uh, and we now have 17 and a half million shares. Uh and uh.

and I think we're going to make six or seven times I think it's the stock is now 225, 230 50. I think it's going to be 500 in 2025 and I think in 2030, it's going to be 1500. That's my targets. I think when you sold, you sold because you were worried that it was becoming such a huge part of your portfolio.

it had risen so much. and I think at the time you told us he wanted to, it was part of your mandate as your funds. you couldn't have one stock be such a big part of your portfolio. I wanted people to know that I hadn't died and uh, you know that's why they still own the stock.

So I just you know. And and I was getting criticized for being such a large holding and for and I don't normally buy stocks I haven't really since 1992 I've been investing in our funds and uh, but I am allowed to buy private companies and I have a big investment in SpaceX but in Tesla uh I own personally five million shares I bought it after all of my clients that bought their under stock and uh and I said to the board of our mutual funds I said look, I'm not going to buy stock and for myself any longer I'm only going to invest in our funds uh and in private deals but in this instance I think we're going to make 20 times our money I'd like to invest 50 million dollars and uh, and if that works out I've been Baron Capital will be stronger financially and if it does and I can afford to lose, it wouldn't be pleasant. But I will take the chance and I said that uh, if you approve this, I'm the last person to buy I'm not taking anyone's opportunity I try to get everyone else to buy and it wasn't in fact successful. Um and the last one to buy and I would be the last one to sell I will not sell a single share for myself until I sell for all my clients last in last out and so I bought for the clients, we sold about a quarter of their stock I haven't sold a single share personally.

it's it's it's now four and a half billion dollars your Holdings in Tesla That's more than ten percent. If you've got 41 billion dollars in assets under management, it's now more than 10 percent of your funds. Does that get you back to the point where you start to worry it's too big again. Would you sell again for your clients so you're not holding so you're not too beholden to one stock in your funds? Um, it's a little bit less than ten? Um I Think that uh, uh, no, it's not.

It's not anywhere near. I I've been very careful about explaining to people about, uh, the funds that do own this stock and the clients and clients periodically call up and say, you know it's a little bit. uh, too much for me. Can you sell a little bit? Whatever they ask, I'll do and I told them I Think that you're going to make from these levels a double in the next three years and you're going to make after that, you're going to make uh, you know, to a triple again.

So so you can I Think you can make seven times your money over the next uh, seven or eight years? Andrew's got a question too Andrew I Was so so curious if you'd explain what your thoughts were on this opening up of the charging stations that Tesla is doing. It's such a remarkable thing and I think great for the country uh should be good for Tesla but could cut both ways in that it's also creating opportunity for Ford and General Motors um I think that it's not that big a deal economically, not for Tesla Uh, but it's going to make more charging stations available so people will be less worried about buying an electric car thinking that uh, they will be able to charge it wherever they go. Most people charge for cars at home at night. so I don't think it's that big a deal but it will is 4 500 stations right now uh and 45 000 Chargers uh plugs uh this better technology.

It's faster technology it's going to make people. His whole idea is to transform our country and the world uh to uh to electrification to electric cars and this is helpful. So basically you buy a Ford you buy a General Motors car. you're going to be able to charge your cars and not worry about it because you'll be a lot of stations you're going to go to and it's going to make it's going to make it clearer that this is a really coming thing and you have to.

Everyone's gonna. You know. What's really interesting as well is that you know most people would perceive Tesla as Richmond his toy as a card is very expensive. The average car in the United States is now 48 000 a car.

forty eight thousand dollars a court last year. Tesla cars with fifty thousand dollars without a subsidy. This year. they're forty thousand dollars with a seventy five hundred dollar subsidy.

And therefore, they're thirty Three thousand dollars. Thirty Three thousand dollars. You can buy a Tesla when you're buying a regular and that's like a BMW better than a BMW three. And so uh so uh.

The test of why is the Uh is the biggest selling car in the whole world? The Tesla Model three is thirty three thousand dollars and you compare it to any car. This is not a Toyota Toyota Corolla or Byd. This is a Tesla. And when you're buying this car, you get an amazing value.

So it's absurdly cheap. Thirty three thousand dollars for a car. Uh, and people don't realize how cheap it is. So the number One is really cheap.

Number: Cancel that the growth opportunity. Yeah, I Just want to make sure we get to some other stocks too. So okay, so yes. okay.

I'll be conscious. Uh, so uh. so the idea is there's only six percent of cars that are now electric. Uh, and uh, so there's 94 At Orange Uh, there's also a two billion car Fleet uh, one percent as, uh, as uh, electrified.

So there's a really big opportunity for growth. Number one: the charging stations. That's important deal because everyone's gonna now, uh, you know, know that they can charge the course everywhere. Insurance That's another thing that just helps people buy cars.

Uh, Tesla's return on investments. So most companies when they make an investment, they make a 15 returning. Capital That's Target They won't make an investment unless they can make 15 return in equity on the investment on. Capital Uh Tesla When they were making a profit of fifteen thousand dollars required, they built a plant for a million cars and it costs seven billion dollars and that plan would make fifteen thousand dollars in profit.

Acquire. They're making 15 18 billion dollars on a seven billion dollar investment. Let me just interrupt for a second. Morgan Stanley Adam Jonas Yesterday, he's been a big bull on this stock for a long time.

He downgraded it because he said the price is just too high at this point. Still likes the company, but just says it's run pretty far pretty fast. Adam's clients are hedge funds and basically we sold our you know, so it's unusual that the stock went down the day before. Uh yeah, Are you suggesting the hedge fund clients have that information? No.

I don't have no idea, but you're talking to someone all the time. Uh, who has an opinion, an analyst and and he's trying to generate brokerage commissions? I'm trying to be a long-term investor. Long-term investing. That's what we're about.

And so when the stock goes down like it did last year, you don't worry because you figure eventually it's gonna right size Again, most of me I was not worried. Um, but for clients, uh, you know stock went from 300 to 100. Yeah it's now 225. but 250.

it's the same price it was that it was three years ago and the business is three times bigger. The business is three times bigger now. Now they're doing to do a million 82 million cars this year three years ago. uh they were doing 500 000 cars when I sold when I sold our 6.8 million shares.

So basically it's the same price it was three years ago when the business is now three times bigger and so if God could say I have no idea if it's going to be high or low in the short term, you know Elon spoke and Paris at a conference uh last week and he was with uh these, uh, our our no son and or no sunsets in Elon uh you know our businesses in the aggregate Lvmh are 6 000 years old, six and a year teenager. how can you stop? When are you gonna stop embarrassing us? uh with your market cap and he says you know, evaluations are funny? who knows. Um, let's talk about a couple other stuff too. Other things that you like So other stocks we don't care about in this video at least.

So let's go back to Tesla So let's recap what Warren Warren said I have here about 11 points that I jog down as it was talking. Let's go through it real quickly. Number one, he said he invested in people and that what his idea about. Elon Musk greatness.

Think about it this way. if you invest in a company, the number one thing that turns me off of an investment is the quality of the management. The quality of the founders, The quality of the CEO So him starting with that saying hey, I invested in Elon Musk First, it's a huge sign to me that he knows what he's talking about. To me, the quality of management is probably the most predominant factor of a decision to invest in the company and I'm the same way.

Look at Elon Look at his track record. Investing in this guy makes a lot of sense to me. Very much agree with what he said. Now he said that Elon told him back in 2014 they're going to be at 50 growth a year and these numbers? that was nine years ago.

Imagine knowing back then what Illa knew and nobody believed him. Absolutely insane. Yes, he under delivered a little bit on the timelines he over promised on the timelines, but he delivered what he said in 2014. which is another thing that goes to his credit.

As far as quality of CEO Number three, this is really important. So Ron Baron apparently invested 380 million in Tesla that was back in 2014. Um, now they made 4 billion of that original investment. So they 10x their money.

They took out 1.5 billion in profits. Which means they took their original investment. and some. So they took about 3x out of the 10x they've made and the rest of it is still sitting in.

It's actually a very smart strategy when something like goes multi-bagger on you and you have a 10x even if you know that that thing is going to go ballistic. and Ron Baron spoke about it. He said this stock is going to be 500 in 2025 and 1500 in 2030.. So he did say that even if you think that this is a 500 to 1500 stock if it went 10x on you taking out your original investment and a little bit of profit, What he did here: take out 1.5 billion when you invested 400 because you're already saving four billion of on you know appreciation that is completely there for you to take.

So that idea of you know whatever happens now even if Tesla goes bust Ron Baron already did three and a half times his money right? Even this investment goes to zero. That's smart. That's just smart Risk management. I Absolutely love what it did there.

We teach those things on our patient page. Of course you are more than welcome to join. We have a massive massive Community more than 4 000 people on Patreon.com forward slash Tom Nash With each risk management.com into good companies, we teach all of these elements for you, so you're more than welcome to check us out. Join: The theaters start at 5 dollars per month.

We also have the academy tier that's closing real soon, so check it out later. The next thing Ron Baron said here is that he said that he got criticized a lot when the share price went to a hundred dollars, but then again, he didn't sell right? So you will be criticized by your friends, your family, people around you. When things go south about investment. look at Palantir.

When Palantir went down, everybody kept talking about Palantir how I don't know what I'm doing other YouTubers are selling palantir All of a sudden huge pools become huge, Bears, etc etc But I trusted my first. You know my process with Palantir I stayed in Ron Baron crafted his process with Tesla he stayed in. Both of us got rewarded as you can see which is exactly again what we teach on a Patreon Peyton.com forward slash Tom Nash We teach dollar cost averaging into good companies, ignoring the noise, ignoring the fat, ignoring all the criticizers and the naysayers. Just trust you process, trust your theory.

So I absolutely love what he said there. The next thing he said is that he's not going to sell his own personal Tesla shares before all of his clients sell out. So that's another you know sign of faith in the company. and he said that they still don't have 10.

Tesla He cannot go over 10. Remember that so he'll have to sell if they go close to 10 Again Regulatory issues, tax issues, consolidation, a lot of stuff so he's not going to go above 10. And as far as charging goes, they said look, it's not Elon and Tesla is not gonna make a lot of money out of the charging business, but it's good for the total. you know, expansion of the total addressable Market of EVS If the network is offered for everybody, then more EVS will be sold.

the total addressable Market will grow. It's good for a V, is good for the environment and eventually good for Tesla But it's not a huge monetary item for Tesla which we knew. and as far as you know, the model Y, the model 3. he said look, I know that everybody talks about the 25 000 car, but in the US the average cost of car is just under fifty thousand dollars and the model Y is definitely within that range.

and the model 3 is like three. You know, very close even to the Corolla with 33 000. So this already has cars that compete. Look, Model Y sold about 800 000 cars last year.

a Corolla sold 0.1.2 million within a year or two, Model Y is going to be the best selling car in the world and that's what it was hinting on here. and I Have no doubt that's going to happen. When that happens, you'll see another spike in the share price. Um, he.

Also, you know a little bit of a jab towards Pyd is saying well look, you're paying 33 Grand and you're not. It's not like you're getting a Byd and you can hear the discomfort in that brand in his voice. And now he. He's still very bullish on this industry because like one of the things he said is that the dollar Joseph Market here is still massively open.

The adoption rate in the US is like six percent. for EVS, there's 94 of the market still wide open and Tesla is running in the pole position to make it happen. Um, he did say that uh, um, Adam Jones from Goldman Sachs downgraded the stock, but he doesn't pay any attention to that because Adam Jonas is a Trader or at least he caters to Traders and the bank makes money off of actively trading stocks. So he's basically saying that you have to take Adam Jonas and Goldman Sachs opinion with the grain assault about Tesla which I totally agree with.

Um and then he basically said look, the business right now is trading at the valuation of three years ago and it's three times better than it was three three years ago. So what do you do if something is three times bigger, three times better and it's trading at the same price it was three years ago I Mean it's a no-brainer at least if you're on Baron Of course this is not Financial Advice: just my opinion. That's what I Think about the situation. I I Hope you enjoyed this video as always.

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