Ron Baron, a well- known professional investor, recently told CNBC that he has made profits — over-time —- of $6 billion on his investment in Tesla. He also stated he plans to remain a shareholder for at least another 10 years. Those are some bold statements. As a big fan of Ron Baron —I’m kind of miffed that he never asked my thoughts, but I will forgive him.
That said, a GOOD friend of mine, who also owns a relatively large profitable stake in Tesla, asked if it was time for him to take some profits. My response was pretty simple. In the long-term view — my view is that if you believe in Telsa and have a diversified portfolio — you could just follow Ron Baron.
Ron’s firm, known as Baron Capital, has approximately $60.0 billion in assets under management. He claims he still owns 6 million shares of Telsa. Doing the quick math, that equates to ownership of $1.182 billion of Telsa. Although this sounds like a lot, it is only approximately 2.0% of his total assets. In other words, despite the bold statements, Ron’s position is relatively reasonable based on his total portfolio.
He is really taking a prudent view.
Thus, if you relatively own a lot of Telsa, I suggest you take a look at what percentage of assets it is of your total stock portfolio —–as well as your total net worth. If it is higher than 3% —we would caution you and suggest more diversification within your holdings.
Although we agree that Elon Musk is brilliant and a genius, his management style is volatile. The recent Twitter acquisition he personally made is somewhat a distraction. But worse, if he dies, it will be difficult for Telsa to replace him, and your portfolio could be in for a shock.
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