Elderly Insights and Financial Strategies from Billionaire Investor Bill Baron
Elderly Insights and Financial Strategies from Billionaire Investor Bill Baron
In 2024,Permabull and wealthy investment manager Ron Baron had a prosperous run. From an investment perspective, the 81-year-old strategist has long been known as Elon Musk's most ardent supporter, thanks to his fund's substantial investments in Tesla and SpaceX, which have seen significant growth since early November.
The firm's top fund, the $7.3 billion (assets) Baron Partners Fund, which allocates 40% of its assets to Tesla, has gained 37% year-to-date primarily due to Tesla's over 75% price increase so far this year. Another 17% of the portfolio is invested in SpaceX.
Baron's clients, many of whom are retirees with a taste for high-risk investments, are accustomed to Baron's bold moves paying off: Since its inception in 1992, the fund has delivered an annualized average return of almost 15%. According to Morningstar data, the Partners Fund has consistently ranked among the top mutual funds in the country due to an average annual return of 31%, 22%, and 21% over the past five, ten, and fifteen years respectively.
Baron's other big mutual fund is the $7.7 billion (assets) Baron Growth Fund, which focuses on small-sized U.S. companies with substantial growth potential. The fund has underperformed this year—up only 3%, mainly because it doesn't have any exposure to Tesla or SpaceX. However, since its inception in 1994, the fund has posted an average annualized return of over 12%.
In recent years, no investment has yielded larger profits than Baron's long-standing bet on Tesla. He initially invested approximately $400 million in the company between 2014 and 2016 at an average price of around $10 to $12 per share.
"Elon will become the first person to ever surpass a net worth of more than $1 trillion," Baron predicts. Musk recently surpassed a net worth of more than $400 billion, according to our estimates.
After Tesla surpassed a market capitalization of $1 trillion following Trump's election win on November 8, Baron predicted the electric car company would be worth up to $5 trillion within the next decade. "If Musk is successful with robots or autonomous driving, it could be even more than that," he adds.
Although Baron admits there were some fund outflows due to Tesla stock's lackluster performance in the last two to three years, he remains optimistic about its future. He reduced the position in 2021—from a 45% allocation in the Baron Partners Fund—mainly to diversify the portfolio. Baron has no plans to further decrease his current position.
Baron's personal fortune has grown alongside his profitable Tesla investment. His net worth has risen to $6.5 billion, according to our estimates, up from $5.1 billion earlier this year. Baron founded his firm, Baron Capital, in 1982 with just $10 million under management and quickly built a reputation as a respected buy-and-hold investor. He now manages $48 billion across 19 funds.
Despite his age, Baron maintains that he feels as energetic as a teenager and has no intention of retiring: “I want to manage $200 billion in ten years, not $50 billion,” says Baron, referring to his assets under management. “Then after that, in the next ten years, I want my sons and executives to double it again.”
Baron is equally enthusiastic about Musk's privately-owned rocket company, SpaceX. In early December, the company's valuation increased to $350 billion due to a secondary share sale—a 67% increase from its previous valuation of $210 billion in June. Baron's stake in the company was worth roughly $2.6 billion before the latest funding round.
Baron sees significant returns on his investment, predicting the company will reach a valuation of $400 billion by 2027 and $600 billion by 2030. “SpaceX is building the railroad to space, and the reusability of its rockets is a major competitive advantage,” says Baron. He is also particularly bullish on the company's Starlink internet broadband service, which is now being adopted by several major U.S. and international airlines: “Everyone will want it.”
Baron remains optimistic about Musk's new role in government—specifically being tapped by Trump to help lead the newly created Department of Government Efficiency (DOGE). Baron believes Musk's involvement in "axing burdensome regulations" will be beneficial for the markets, and it may help address the growing U.S. deficit issue.
Baron furthermore points to SpaceX's efficiency compared to its competitors—such as lower costs and quicker timing—arguing that Musk can bring some of that same efficiency to the government. “Trump has one of the brightest minds on the planet by his side, and he's listening to him,” says Baron.
Frequently praised investments of Baron's include entities such as the New York-based financial market platform MSCI and the Colorado-based ski resort operator Vail Resorts. Despite experiencing lower performance than the S&P 500 this year, Baron maintains that these companies represent excellent long-term, resilient businesses with distinct competitive edges or expansion potential. He appreciates Vail's increasing demand, not to mention its strategy of securing a significant portion of its income before the winter season even begins by selling most of its passes well in advance. As per reports, an impressive 2.3 million guests have already bought season passes ahead of the 2025 season, representing roughly 75% of all skier visits. The global exposure and advantages from the transition to passive investments, Baron underscores, are attributes of emerging market exchange MSCI.
Tending to possess minimal exchange frequency, Baron aims to double the investment return within a five-year period. He increases his sale of company shares only when growth slows down or the business fundamentals undergo significant changes. Once such events transpire, he quickly offloads the shares and moves on to new ventures, he opens up. In the past year, he has offloaded shares in companies like the Chinese search engine Baidu and the casino operator PENN Entertainment (previously known as Penn National Gaming).
Concerning future plans, Baron's firm has also started evaluating active ETFs, although it has been a staunch resister of such a trend in passive investing. Prompting him to reconsider this, his sons, Michael and David, have been actively urging him to expand the firm in this direction. "I've been opposed to ETFs for a long time, but there are considerable tax benefits," Baron acknowledges.
In his own words, Baron expresses his desire to grow even bigger, “I’ve got to be much bigger.” Likely, he's been motivated by his associate Musk's remarkable success. “I want to be a trillion-dollar firm.”
- Baron Capital's significant investments in Tesla and SpaceX, led by Ron Baron, have been a major contributor to the firm's top fund, Baron Partners Fund's, year-to-date growth of 37%.
- At the Baron Conference in 2024, Elon Musk, the CEO of SpaceX, might discuss the company's plans and achievements, as Ron Baron is known for inviting influential figures to his annual events.
- Baron Capital's stake in SpaceX increased in value after Donald Trump's election win, as the company's valuation surpassed $210 billion due to a secondary share sale in early December.