Tesla's mostly head Barron: Investing in Tesla has made a huge profit of $6 billion plans to hold it for at least another 10 years

FX168 Financial Newspaper (North America) -- Since billionaire Ron Baron first invested in electric car maker Tesla in 2014, tesla stock held by his eponymous fund has soared to more than $6.1 billion.

With the stock price reaching new highs, he plans to continue to persevere. Tesla's market capitalization has topped $1 trillion this week, making it the second-fastest company to reach $1 trillion in market capitalization.

"It's a normal type of investment — a very long-term investment for us," he told CNBC on Wednesday (Oct. 27). "I think we'll probably be investors for another 10 years, like SpaceX."

Baron Capital Management increased its stake in Tesla between 2014 and 2016. He said the fund initially invested $380 million and had an average cost per share of $43.07. Now, Tesla's stock price is a little more than $1,000 per share.

His fund also holds about 1.3 million shares of Elon Mask's SpaceX, which it first bought in September 2017.

Baron Capital has more than 400 investments in its portfolio, $58.9 billion in assets under management, and generates $54 billion in profits for customers, $6.1 billion of which comes from Tesla, the founder said.

But the longtime Bullish Tesla bull — who predicted the company's valuation would reach $1 trillion years ago and now thinks it will reach $2 trillion — has also expressed skepticism, saying it would not have been easy to hold shares in the early years amid sharp swings in the stock price.

In March, Barron predicted that Tesla's stock price would reach $2,000 per share over the next 10 years and $1,500 per share by 2024. Despite the above predictions, Barron sold 1.8 million shares of Tesla stock for the company's customers in March, a move he called "painful" but necessary to "reduce risk."

Barron's company sold another 41,000 shares of Tesla stock in October, but he remains very bullish on Tesla stock, calling Musk a hard-working, inspiring, "smart guy."

Barron said: "When I first met Elon 10 years ago, I was skeptical that it would work." He also said that in his lifetime, more than 50 car companies he knew failed.

Later, Tesla produced the Model S in 2012, and in his opinion, things began to change.

Still, Barron said even Musk's friends believe the automaker won't be an attractive investment because Tesla's CEO isn't focused on short-term profitability.

Instead, Musk reinvested profits in building new factories, conducting research and launching new models.

"We're investing in self-investing businesses that are cutting current profits to become bigger," Barron said. "That's what he did."

【Advertisement】High winning rate training camp