1 00:00:02,200 --> 00:00:06,399 Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg 2 00:00:06,480 --> 00:00:10,120 Speaker 1: Radio this weekend. On the podcast, I have an extra 3 00:00:10,280 --> 00:00:14,160 Speaker 1: extra special guest. What can I say? Ron Baron, founder 4 00:00:14,200 --> 00:00:17,360 Speaker 1: of Baron Capital. He's a legend. I don't even know 5 00:00:17,400 --> 00:00:20,439 Speaker 1: where to begin with this guy. He founded Baron Capital 6 00:00:20,440 --> 00:00:24,119 Speaker 1: in eighty two. The performance numbers he's put up have 7 00:00:24,360 --> 00:00:29,360 Speaker 1: just been obscene. Everything he does, he seems to find 8 00:00:29,480 --> 00:00:34,959 Speaker 1: his way to just spectacular returns, whether it's public companies 9 00:00:35,080 --> 00:00:38,800 Speaker 1: or private companies or real estate. Just Google search him 10 00:00:38,920 --> 00:00:42,440 Speaker 1: on East Hampton and the property he bought for a 11 00:00:42,520 --> 00:00:45,760 Speaker 1: hundred million dollars in the midst of the financial real 12 00:00:45,840 --> 00:00:49,360 Speaker 1: estate collapse in oh seven. He turned that into golden. 13 00:00:49,440 --> 00:00:53,920 Speaker 1: I mean, he just has an eye for intrinsic value 14 00:00:54,520 --> 00:01:00,200 Speaker 1: and a process for doing things that really is is 15 00:01:00,280 --> 00:01:04,040 Speaker 1: just amazing. What I ended up doing in this conversation 16 00:01:04,319 --> 00:01:06,840 Speaker 1: was kind of giving him a nudge and men just 17 00:01:07,080 --> 00:01:10,280 Speaker 1: getting out of his way. He just tells all sorts 18 00:01:10,280 --> 00:01:16,040 Speaker 1: of stories about how different investments work out. I asked him, 19 00:01:17,080 --> 00:01:19,119 Speaker 1: what are you doing in the growth space? I really 20 00:01:19,160 --> 00:01:21,680 Speaker 1: know you as a small cap guy, and that's how 21 00:01:21,720 --> 00:01:26,360 Speaker 1: he built his reputation. And he describes the small caps 22 00:01:26,400 --> 00:01:28,520 Speaker 1: that he bought when he was first getting started in 23 00:01:28,560 --> 00:01:32,279 Speaker 1: the eighties. You know, small companies like Disney and Highat 24 00:01:33,000 --> 00:01:37,360 Speaker 1: and International Gaming. And it's hilarious because forty years ago 25 00:01:37,560 --> 00:01:41,280 Speaker 1: those were small cap companies. He just seemed to have 26 00:01:41,360 --> 00:01:45,399 Speaker 1: a knack of identifying the companies that were about to 27 00:01:45,440 --> 00:01:50,080 Speaker 1: go from relatively small two giants. And it's pretty hilarious 28 00:01:50,120 --> 00:01:53,360 Speaker 1: to hear him discuss that when he was a broker 29 00:01:53,360 --> 00:01:56,200 Speaker 1: in the seventies, he was upset because he would buy stocks, 30 00:01:56,920 --> 00:01:59,560 Speaker 1: watch them triple, and sell them and then watch them 31 00:01:59,560 --> 00:02:02,320 Speaker 1: go up thirty acts over the next thirty years, which 32 00:02:02,360 --> 00:02:06,600 Speaker 1: is why his turnover ratio is insane. It's like four percent. 33 00:02:07,160 --> 00:02:10,959 Speaker 1: He's very Warren Buffett like. He never sells. He finds 34 00:02:10,960 --> 00:02:14,560 Speaker 1: a good company and he rides them forever. So he's 35 00:02:14,600 --> 00:02:17,400 Speaker 1: a legend in the industry. I found this to be 36 00:02:17,520 --> 00:02:22,600 Speaker 1: just an endlessly entertaining and fascinating conversation with no further ado. 37 00:02:23,200 --> 00:02:29,000 Speaker 1: My conversation with Ron Barron VI is Masters in Business 38 00:02:29,240 --> 00:02:33,880 Speaker 1: with Barry Ridholts on Bloomberg Radio. My extra special guest 39 00:02:33,960 --> 00:02:38,160 Speaker 1: this week is Ron Barron, founder of Baron Capital. He 40 00:02:38,240 --> 00:02:41,800 Speaker 1: began the firm in n two, and it has become 41 00:02:42,160 --> 00:02:47,919 Speaker 1: known for its long term, fundamental active approach to growth investing. 42 00:02:48,800 --> 00:02:52,919 Speaker 1: Seventeen of their mutual funds have assets of forty nine 43 00:02:53,520 --> 00:02:56,920 Speaker 1: billion dollars. One of the funds run by Ron and 44 00:02:56,960 --> 00:02:59,720 Speaker 1: his son Michael, was up a hundred and forty eight 45 00:03:00,000 --> 00:03:04,160 Speaker 1: sent in. Nearly all of their funds have been beating 46 00:03:04,160 --> 00:03:09,680 Speaker 1: their benchmarks since their inception. Way back in Ron Baron, 47 00:03:10,080 --> 00:03:14,720 Speaker 1: Welcome to Bloomberg. Thanks. So let's go way back to 48 00:03:14,800 --> 00:03:18,519 Speaker 1: your childhood. You you had written you were fourteen when 49 00:03:18,560 --> 00:03:21,119 Speaker 1: you talked to your father into letting you buy your 50 00:03:21,160 --> 00:03:24,840 Speaker 1: first stock. You put a thousand dollars into the market, 51 00:03:24,919 --> 00:03:27,919 Speaker 1: and by the time you hit college it had quadruple 52 00:03:28,080 --> 00:03:31,840 Speaker 1: to four thousand dollars, and you were hooked. You just 53 00:03:31,919 --> 00:03:35,880 Speaker 1: began studying the market almost obsessively. You're right. Tell us 54 00:03:35,920 --> 00:03:39,680 Speaker 1: a little bit about how that led to your interest 55 00:03:39,840 --> 00:03:44,160 Speaker 1: in in being a money manager. Well, my dad was 56 00:03:44,480 --> 00:03:47,120 Speaker 1: an engineer for the army and my mother was a 57 00:03:47,120 --> 00:03:51,720 Speaker 1: buying the agent for the army, and so professionals and 58 00:03:52,560 --> 00:03:57,119 Speaker 1: the people who were most successful we're doctors and lawyers. 59 00:03:57,160 --> 00:04:01,640 Speaker 1: And if you had a house on the on the lake, Uh, 60 00:04:01,840 --> 00:04:03,920 Speaker 1: it was worth fifty thou dollars. Our house is where 61 00:04:04,000 --> 00:04:07,040 Speaker 1: twenty thou dollars. And so I and the guy i've 62 00:04:07,200 --> 00:04:09,440 Speaker 1: on the lake he owned rides on the board, book 63 00:04:09,440 --> 00:04:11,360 Speaker 1: and go of a Cadillac and probably made a hundred 64 00:04:11,400 --> 00:04:14,160 Speaker 1: thousand dollars a year. That's to me with success. And 65 00:04:14,240 --> 00:04:16,520 Speaker 1: so I wanted to be a doctor. I didn't get 66 00:04:16,560 --> 00:04:19,440 Speaker 1: into medical school when you were talking about the first investment. 67 00:04:19,520 --> 00:04:23,640 Speaker 1: I've been working seven four since I've been fourteen. That's 68 00:04:23,640 --> 00:04:26,080 Speaker 1: when you got working papers. So my first job was 69 00:04:26,120 --> 00:04:29,480 Speaker 1: as a caddy. I had all these summer jobs caddy waiter, 70 00:04:30,360 --> 00:04:37,039 Speaker 1: bart m bus boy, lifeguard, uh border ski instructor, cabanah boy. 71 00:04:38,040 --> 00:04:41,560 Speaker 1: One summer I actually had a job where I was 72 00:04:41,600 --> 00:04:45,080 Speaker 1: working nine to five was a lifeguard. At eleven to seven, 73 00:04:45,440 --> 00:04:48,680 Speaker 1: I worked in the emergency room as in orderly and 74 00:04:49,120 --> 00:04:51,320 Speaker 1: people would come in on Saturday night shot or stay 75 00:04:51,360 --> 00:04:53,120 Speaker 1: up that I'd have to hold him down, A skinny 76 00:04:53,120 --> 00:04:56,279 Speaker 1: little kid would hold him down on a gurney until 77 00:04:56,360 --> 00:04:59,640 Speaker 1: the next a kin came and gave permission to operate. 78 00:04:59,720 --> 00:05:01,520 Speaker 1: The bok died while I was holding him. So my 79 00:05:01,600 --> 00:05:05,839 Speaker 1: job was I would have to clean bedpands, I'd have 80 00:05:05,920 --> 00:05:09,560 Speaker 1: to hold people on the on the gurney until they 81 00:05:10,520 --> 00:05:13,440 Speaker 1: until they got permission to op rate, and then UH 82 00:05:13,760 --> 00:05:16,520 Speaker 1: in emergency in the internal in the I c U. 83 00:05:16,640 --> 00:05:19,440 Speaker 1: When people died, I would unplug him and I'd have 84 00:05:19,520 --> 00:05:21,280 Speaker 1: to put the bodies, wrap them in sheets, and I'd 85 00:05:21,320 --> 00:05:23,359 Speaker 1: have to put him in the freezer. That was my 86 00:05:23,440 --> 00:05:27,320 Speaker 1: job eleven to seven for for there in the nine 87 00:05:27,360 --> 00:05:30,440 Speaker 1: to five. So I was always interested in being successful. 88 00:05:30,480 --> 00:05:33,800 Speaker 1: I didn't know exactly what success was. And when I invested. 89 00:05:34,360 --> 00:05:36,880 Speaker 1: When my convinced my dad to allow me to invest 90 00:05:36,920 --> 00:05:38,960 Speaker 1: in stocks, he was never able to invest in stocks. 91 00:05:39,680 --> 00:05:41,960 Speaker 1: When I when you can. When I convinced them, I 92 00:05:42,040 --> 00:05:44,040 Speaker 1: was able to take my thousand dollars they had from 93 00:05:44,040 --> 00:05:47,919 Speaker 1: my boar Misva and I ultimately invested it in UH 94 00:05:48,120 --> 00:05:51,160 Speaker 1: Mommouth County National Bank. My dad said, you know not 95 00:05:51,360 --> 00:05:53,279 Speaker 1: the stock market, but you know. Tell me about a 96 00:05:53,320 --> 00:05:55,520 Speaker 1: company you want to invest in. Explain to me why 97 00:05:55,640 --> 00:05:58,599 Speaker 1: you want to invest in, research it, and if it 98 00:05:58,640 --> 00:06:01,640 Speaker 1: makes sense to me, you can do it. And UH 99 00:06:01,760 --> 00:06:05,760 Speaker 1: the the local bank UH was owned. Mamma County National 100 00:06:05,760 --> 00:06:09,119 Speaker 1: Bank was principally owned by one of the wealthiest people 101 00:06:09,400 --> 00:06:13,080 Speaker 1: in probably the wealthiest person in my neighborhood. Uh and 102 00:06:13,160 --> 00:06:16,559 Speaker 1: he owned that banks, three story red brick building, white 103 00:06:16,560 --> 00:06:21,480 Speaker 1: pillars in front, Virgin style building. Senator of Senator Stout 104 00:06:21,520 --> 00:06:24,080 Speaker 1: from New Jersey had his office in the building. And 105 00:06:24,279 --> 00:06:26,000 Speaker 1: uh and allowed to me. I looked through the company, 106 00:06:26,040 --> 00:06:28,200 Speaker 1: and I missed my dad to let me invest. That's 107 00:06:28,200 --> 00:06:31,080 Speaker 1: where I had my savings. Uh And they were getting 108 00:06:31,160 --> 00:06:32,720 Speaker 1: two and a half percent interest or two and a 109 00:06:32,800 --> 00:06:35,640 Speaker 1: quarter percentials. You're bringing your past book and every quarter 110 00:06:35,720 --> 00:06:39,920 Speaker 1: they print out your interest. So ultimately invested in that, 111 00:06:40,160 --> 00:06:42,120 Speaker 1: and then I would go home. So I was interesting 112 00:06:42,200 --> 00:06:44,960 Speaker 1: girls in sports and and but every day I look 113 00:06:44,960 --> 00:06:46,760 Speaker 1: at the Asbury Park Press and they had ten or 114 00:06:46,760 --> 00:06:49,800 Speaker 1: fifteen local stocks. And every day from the time I 115 00:06:49,880 --> 00:06:53,240 Speaker 1: invested my hundred shares and ten dollars to share, every 116 00:06:53,240 --> 00:06:55,040 Speaker 1: single day the stock you to stay the same. We 117 00:06:55,200 --> 00:06:57,520 Speaker 1: went up in eighth or sixteenth or a quarter every 118 00:06:57,560 --> 00:07:00,360 Speaker 1: single day. And then seven months later, eight month later, 119 00:07:00,400 --> 00:07:03,320 Speaker 1: it was acquired for seventeen dollars when I paid ten 120 00:07:03,440 --> 00:07:05,640 Speaker 1: for it. And so all of a sudden, my thousand 121 00:07:05,640 --> 00:07:08,280 Speaker 1: dollars became worth seventeen hundred. I said, almost gotten nothing 122 00:07:08,320 --> 00:07:11,600 Speaker 1: to this. I want to do this, and uh so 123 00:07:11,600 --> 00:07:15,600 Speaker 1: so I wanted to UH be an investor somehow, and 124 00:07:15,680 --> 00:07:18,400 Speaker 1: I would read about a well known investors, you know, 125 00:07:18,720 --> 00:07:22,640 Speaker 1: UH very side with Manhattan's fund. And then I went 126 00:07:22,720 --> 00:07:26,280 Speaker 1: to UH and I graduated college, didn't get into medical school. 127 00:07:26,800 --> 00:07:30,080 Speaker 1: I didn't want to go to Vietnam UH and UH. 128 00:07:30,520 --> 00:07:34,520 Speaker 1: I had a fellowship PhD fellowship at Georgetown, and I 129 00:07:34,520 --> 00:07:37,520 Speaker 1: thought I would do that for a year and biochemistry 130 00:07:38,000 --> 00:07:41,080 Speaker 1: and ride my motorcycle where my white jacket pretended I 131 00:07:41,120 --> 00:07:44,640 Speaker 1: was a doctor and UH as I did that for 132 00:07:45,440 --> 00:07:49,560 Speaker 1: a year, and I was making sixteen hundred dollars a year, 133 00:07:50,080 --> 00:07:53,440 Speaker 1: and I was working as a bartender UH and a 134 00:07:53,520 --> 00:07:59,640 Speaker 1: waiter at seventy nine UH in Georgetown and UH and 135 00:07:59,640 --> 00:08:03,400 Speaker 1: then the summer on Fridays and Saturdays to make extra money. 136 00:08:03,880 --> 00:08:06,040 Speaker 1: And I was living in a basement in Rock Creek Park. 137 00:08:06,760 --> 00:08:10,200 Speaker 1: And that summer UH one of my friends who actually 138 00:08:10,200 --> 00:08:13,240 Speaker 1: did get into medical school, my best friend. We said, Okay, 139 00:08:13,240 --> 00:08:15,400 Speaker 1: why don't we see if we can sell fuller brushes. 140 00:08:15,400 --> 00:08:17,680 Speaker 1: Maybe we can make money doing that. So we went 141 00:08:18,040 --> 00:08:21,720 Speaker 1: into a neighborhood. We sold the record number of fuller brushes. 142 00:08:22,000 --> 00:08:24,720 Speaker 1: It was a black neighborhood, and sold a record number 143 00:08:24,720 --> 00:08:28,520 Speaker 1: of fuller brushes and Southeast Washington, I think it was. Uh. 144 00:08:28,560 --> 00:08:32,600 Speaker 1: And then UH, when we ultimately went back to deliver 145 00:08:32,679 --> 00:08:36,760 Speaker 1: those brushes, uh, there were no deposits and people wouldn't 146 00:08:36,760 --> 00:08:39,480 Speaker 1: even answer the door. You'd hear a little voice inside saying, 147 00:08:39,679 --> 00:08:42,280 Speaker 1: I mean, mommy, it's a fuller brushman. And they get 148 00:08:42,280 --> 00:08:44,439 Speaker 1: away from the door and said, not a single person 149 00:08:44,480 --> 00:08:47,360 Speaker 1: took a brush that they bought. But but this this, 150 00:08:47,520 --> 00:08:50,640 Speaker 1: it changed my life because we went came to a 151 00:08:50,679 --> 00:08:55,040 Speaker 1: building high rise and uh, and it said absolutely nos 152 00:08:55,080 --> 00:08:57,640 Speaker 1: to listening as I said, okay, Bob, you start at 153 00:08:57,640 --> 00:08:59,439 Speaker 1: the top and I'll start at the bottom. We'll meet 154 00:08:59,440 --> 00:09:01,160 Speaker 1: in the middle. So where you know, we just bang 155 00:09:01,200 --> 00:09:03,600 Speaker 1: on doors. And so we bang on doors, and somewhere 156 00:09:03,600 --> 00:09:06,200 Speaker 1: in the middle of the building, a guy answers the door. 157 00:09:06,600 --> 00:09:09,080 Speaker 1: And he's a few years older than I am. And 158 00:09:09,080 --> 00:09:12,319 Speaker 1: he's well dressed. He has an apartment, and he has furniture, 159 00:09:12,520 --> 00:09:15,640 Speaker 1: and he has windows to look out the sky instead 160 00:09:15,679 --> 00:09:17,520 Speaker 1: of you know, standing on a chair to look out 161 00:09:17,520 --> 00:09:21,520 Speaker 1: at grass, you know, because you're in the basement and uh. 162 00:09:21,760 --> 00:09:24,679 Speaker 1: And he's dressed nicely and he's a wife. She's cooking 163 00:09:24,720 --> 00:09:26,599 Speaker 1: dinner for him in the kitchen and said, what do 164 00:09:26,679 --> 00:09:28,920 Speaker 1: you how come you're not in Vietnam? He says, while 165 00:09:28,920 --> 00:09:32,280 Speaker 1: I'm working in the patent office. I'm a patent examiner. Uh. 166 00:09:32,320 --> 00:09:33,760 Speaker 1: And I said, well, how do you do that? And 167 00:09:33,760 --> 00:09:36,440 Speaker 1: he's making eleven thousand dollars a year. I said how 168 00:09:36,440 --> 00:09:38,920 Speaker 1: do you do that? And he said, well, you take 169 00:09:39,000 --> 00:09:42,280 Speaker 1: the law wars and if you get into a law school, 170 00:09:42,840 --> 00:09:44,560 Speaker 1: then you can get a job in the patent office 171 00:09:44,600 --> 00:09:47,680 Speaker 1: as an examiner. And I said, okay, I want to 172 00:09:47,960 --> 00:09:50,760 Speaker 1: and uh and she invites me and buy some pull 173 00:09:50,800 --> 00:09:54,280 Speaker 1: of brushes actually uh And but the big thing is 174 00:09:54,320 --> 00:09:58,760 Speaker 1: he tells me about here's this critical skills job, about 175 00:09:59,280 --> 00:10:02,920 Speaker 1: that I can it for fit into and uh uh 176 00:10:03,280 --> 00:10:07,080 Speaker 1: and starting salary with seven thousand seven dollars, they go 177 00:10:07,160 --> 00:10:10,440 Speaker 1: from making sixteen a year they bring in a basement 178 00:10:11,200 --> 00:10:15,600 Speaker 1: to making seventy nine dollars a year for the next 179 00:10:15,640 --> 00:10:18,920 Speaker 1: three years and a draft exempt job. And I said, wow, 180 00:10:18,960 --> 00:10:21,160 Speaker 1: that's great. So I took the boards, did a real 181 00:10:21,280 --> 00:10:24,000 Speaker 1: did real well, got into George Washington Law school, went 182 00:10:24,040 --> 00:10:26,520 Speaker 1: to school at night and patent examined in the daytime. 183 00:10:27,120 --> 00:10:29,319 Speaker 1: And then when I got to be twenty six, and 184 00:10:29,480 --> 00:10:32,640 Speaker 1: now I was always interested in stock market. I read 185 00:10:32,679 --> 00:10:35,520 Speaker 1: about it, never had any courses on it, ever had 186 00:10:35,559 --> 00:10:38,680 Speaker 1: any courses economics except for Echo went on one in 187 00:10:38,720 --> 00:10:41,760 Speaker 1: college and then uh, but I read all these books 188 00:10:42,600 --> 00:10:45,640 Speaker 1: and uh. And then I got to be twenty six 189 00:10:45,920 --> 00:10:49,680 Speaker 1: and I couldn't be drafted anymore. And the day after 190 00:10:49,720 --> 00:10:52,920 Speaker 1: my birthday, I quit my job in the patent office 191 00:10:53,120 --> 00:10:56,480 Speaker 1: and they had a going away munch for me at 192 00:10:56,600 --> 00:10:59,080 Speaker 1: the at the holiday in which I was laid for 193 00:10:59,280 --> 00:11:02,880 Speaker 1: across the street from Crystol City in Virginia. I'm late 194 00:11:02,960 --> 00:11:06,160 Speaker 1: for a lunch at a date, you know, girlfriend. And 195 00:11:06,160 --> 00:11:08,400 Speaker 1: as I get there, and I'm late, and everybody understood 196 00:11:08,440 --> 00:11:12,040 Speaker 1: where I was and and so I come in a 197 00:11:12,080 --> 00:11:15,839 Speaker 1: motorcycle and and uh and and and everyone started joking 198 00:11:15,880 --> 00:11:18,920 Speaker 1: around and and my boss was Mr Lieman, and somehow 199 00:11:19,000 --> 00:11:21,719 Speaker 1: he really liked me, and he sort of identified with 200 00:11:22,240 --> 00:11:24,920 Speaker 1: this crazy guy who was young in the long hair 201 00:11:25,040 --> 00:11:28,680 Speaker 1: and boots Stevie war and uh and and somebody liked me, 202 00:11:28,760 --> 00:11:32,560 Speaker 1: and so he was always promoting me and and but 203 00:11:33,840 --> 00:11:36,560 Speaker 1: it was never very good at a patent examiner. But 204 00:11:36,679 --> 00:11:40,680 Speaker 1: he's dead. So his speech's going away speech, uh to 205 00:11:40,800 --> 00:11:45,880 Speaker 1: me at the patent office lunch too, to honor me 206 00:11:45,960 --> 00:11:49,640 Speaker 1: for the school. He says, you know, um, there was 207 00:11:49,720 --> 00:11:54,680 Speaker 1: ah Iron he didn't like being a patent examiner so much, 208 00:11:54,920 --> 00:11:57,360 Speaker 1: and he was okay at it, but you know, it 209 00:11:57,520 --> 00:12:01,199 Speaker 1: wasn't his thing. And but you know, he's always been 210 00:12:01,200 --> 00:12:04,240 Speaker 1: interested in the stock market, and that's he's going to 211 00:12:04,320 --> 00:12:07,680 Speaker 1: go to New York and and find his uh calling. 212 00:12:07,760 --> 00:12:10,600 Speaker 1: But there was another patent examiner he had the same 213 00:12:10,640 --> 00:12:14,000 Speaker 1: idea where he also didn't like being a patent examiner 214 00:12:14,080 --> 00:12:16,240 Speaker 1: so much. And that was a long time ago, in 215 00:12:16,320 --> 00:12:19,440 Speaker 1: nineteen thirties, and and he lived in Switzerland or Germany 216 00:12:20,000 --> 00:12:22,960 Speaker 1: and uh. And that was Albert Einstein, and he did okay, 217 00:12:23,160 --> 00:12:24,680 Speaker 1: and I expect Ron to do okay. So he was 218 00:12:24,720 --> 00:12:27,600 Speaker 1: comparing me to Albert Einstein. Uh. And then I go 219 00:12:27,679 --> 00:12:29,560 Speaker 1: to New York and of course I'm now in debt 220 00:12:29,600 --> 00:12:33,240 Speaker 1: fifteen thousand dollars. I was actually in debt fourteen thousand, 221 00:12:33,280 --> 00:12:36,600 Speaker 1: four hundred fifteen thousand debt, but had six hundred hours 222 00:12:36,600 --> 00:12:39,200 Speaker 1: in cash. I go to live again in a basement 223 00:12:39,320 --> 00:12:42,200 Speaker 1: of one of my friends from college from high school 224 00:12:42,800 --> 00:12:45,640 Speaker 1: and in Maplewood, New Jersey, and I would go every 225 00:12:45,720 --> 00:12:49,680 Speaker 1: day to New York, uh to try to knock on 226 00:12:49,760 --> 00:12:53,080 Speaker 1: doors to to interview for a job as an analyst. 227 00:12:53,160 --> 00:12:55,440 Speaker 1: It was just impossible to get a job. In nineteen 228 00:12:55,480 --> 00:12:58,960 Speaker 1: sixty nine, I was I was unemployed for three months. 229 00:12:59,000 --> 00:13:01,640 Speaker 1: I was running out of money. Called my dad, you know, 230 00:13:02,280 --> 00:13:05,560 Speaker 1: I'm never getting a job on Wall Street. I would 231 00:13:05,559 --> 00:13:08,280 Speaker 1: I would apply for jobs as a chauffeur, thinking that 232 00:13:08,400 --> 00:13:10,520 Speaker 1: for a guy who was ahead of a Wall Street firm, 233 00:13:10,640 --> 00:13:13,000 Speaker 1: thinking that, see if I can talk to him, and 234 00:13:13,040 --> 00:13:14,880 Speaker 1: if I can get a job for him, and maybe 235 00:13:15,600 --> 00:13:18,840 Speaker 1: I can poke my way into some starter job. They're 236 00:13:18,960 --> 00:13:21,840 Speaker 1: like a mail room guy or something. And but no 237 00:13:22,000 --> 00:13:26,679 Speaker 1: jobs and uh and and ultimately I convinced Tony ta 238 00:13:26,679 --> 00:13:29,559 Speaker 1: Bell from Delicated Harvard to Bell, which is part of 239 00:13:29,600 --> 00:13:33,120 Speaker 1: Jenne Moncremer Scott uh to give me a chance, and 240 00:13:33,240 --> 00:13:37,120 Speaker 1: I wrote a hired me in the fall of nineteen 241 00:13:37,160 --> 00:13:41,079 Speaker 1: sixty nine, and I was the research department for Jennie 242 00:13:41,160 --> 00:13:44,840 Speaker 1: Montgomery Scott broken firm in Philadelphia, and they had two 243 00:13:45,200 --> 00:13:49,840 Speaker 1: fifty offices, two fifty brokers in five offices. And Tony 244 00:13:49,920 --> 00:13:52,160 Speaker 1: every week was in a Princeton which is where I 245 00:13:52,200 --> 00:13:55,320 Speaker 1: lived with him at his firm Delicate Harvard to Bell 246 00:13:55,920 --> 00:13:58,080 Speaker 1: and uh and and what I would do is I 247 00:13:58,080 --> 00:14:01,560 Speaker 1: would go. He would every week stocks for me to 248 00:14:01,640 --> 00:14:03,719 Speaker 1: go visit the companies that go visit them, and I 249 00:14:03,800 --> 00:14:06,439 Speaker 1: write a letter and then the letter went to all 250 00:14:06,480 --> 00:14:09,160 Speaker 1: the salesmen. And then so I left Washington making eleven 251 00:14:09,200 --> 00:14:11,800 Speaker 1: thousand dollars a year and here I am making fifteen 252 00:14:11,840 --> 00:14:15,120 Speaker 1: thousand dollars a year and promised me eighteen thousand by 253 00:14:15,160 --> 00:14:17,120 Speaker 1: the end of the year. I didn't get the raise. 254 00:14:17,679 --> 00:14:20,720 Speaker 1: UH and UH and then UH. And then I got 255 00:14:20,760 --> 00:14:23,720 Speaker 1: fired because I wrote a negative report about a company 256 00:14:23,720 --> 00:14:26,920 Speaker 1: that UH that ultimate bankrupt. But I screwed up Jane 257 00:14:27,000 --> 00:14:32,000 Speaker 1: mcgommery Scott forward in the underwriting UH and then UH. 258 00:14:32,160 --> 00:14:33,600 Speaker 1: And it was very easy for me to get my 259 00:14:33,680 --> 00:14:36,960 Speaker 1: next job. And Alan n Abelson from Barrens UH, he 260 00:14:37,160 --> 00:14:39,000 Speaker 1: was he was on my list for this letter that 261 00:14:39,040 --> 00:14:41,600 Speaker 1: I wrote every week. And I wrote a letter every 262 00:14:41,600 --> 00:14:44,760 Speaker 1: week for Jennue mcgommery Scott gave it to their salesman 263 00:14:44,880 --> 00:14:47,240 Speaker 1: that the companies have been to visit go to the 264 00:14:47,280 --> 00:14:51,880 Speaker 1: two fifty brokers in these five different offices or six offices, 265 00:14:52,160 --> 00:14:54,280 Speaker 1: and that was what they sold to their clients every week. 266 00:14:54,320 --> 00:14:57,680 Speaker 1: The companies that have been to visit UH. So ultimately. 267 00:14:58,280 --> 00:15:01,960 Speaker 1: That was for for three years and then UH, now 268 00:15:02,240 --> 00:15:07,880 Speaker 1: I go to UH New York and get another analyst job. 269 00:15:07,880 --> 00:15:10,320 Speaker 1: And then I went became partners with a friend of 270 00:15:10,360 --> 00:15:15,000 Speaker 1: mine from law school and we sold research to two 271 00:15:15,040 --> 00:15:20,560 Speaker 1: hedge funds. I had a hundred clients ultimately and hedge funds, 272 00:15:20,720 --> 00:15:24,600 Speaker 1: mutual funds, anyone who is well known, I would do 273 00:15:24,720 --> 00:15:28,920 Speaker 1: research and sell us them for their commissions. And U 274 00:15:29,320 --> 00:15:32,680 Speaker 1: and I went from from having a negative net worth 275 00:15:33,440 --> 00:15:39,440 Speaker 1: of fifteen thousand dollars in nineteen seventy to getting UH 276 00:15:39,600 --> 00:15:42,200 Speaker 1: to making a million dollars in a year in nineteen 277 00:15:42,240 --> 00:15:45,320 Speaker 1: eighty being worth a million dollars and then nineteen eighty 278 00:15:45,360 --> 00:15:49,000 Speaker 1: two started Barren Capital. At that time we had ten 279 00:15:49,080 --> 00:15:52,760 Speaker 1: million dollars under management and million that's with an emma 280 00:15:53,440 --> 00:15:58,160 Speaker 1: and involved from from one person UH he had who 281 00:15:58,240 --> 00:16:02,440 Speaker 1: saw us and and he had given six people, six 282 00:16:02,480 --> 00:16:07,200 Speaker 1: people who were his favorite stockbrokers in the nineteen seventies, 283 00:16:07,280 --> 00:16:10,000 Speaker 1: seventies six or seventy seven. He gave each of us 284 00:16:10,040 --> 00:16:13,120 Speaker 1: five million dollars after he had had a tough year. 285 00:16:13,200 --> 00:16:15,200 Speaker 1: So they said Quantum said, why don't you have some 286 00:16:15,280 --> 00:16:18,200 Speaker 1: other people manage money for you? And that have just you, 287 00:16:18,320 --> 00:16:22,520 Speaker 1: and he picked his six favorite uh brokers. I was 288 00:16:22,560 --> 00:16:26,040 Speaker 1: one of them, and my five million became worth ten millions, 289 00:16:26,480 --> 00:16:29,880 Speaker 1: and everyone else to buy and sell and trade and 290 00:16:30,000 --> 00:16:33,520 Speaker 1: uh and my my little segments of that quantum fund 291 00:16:34,000 --> 00:16:36,800 Speaker 1: was called Man Drake and Raked the magician Man Drake. 292 00:16:37,120 --> 00:16:38,720 Speaker 1: And what I would do is I would just buy stuff. 293 00:16:38,720 --> 00:16:42,280 Speaker 1: Then I'd hold it and uh and and that's why 294 00:16:42,320 --> 00:16:45,720 Speaker 1: the five million became ten And in nineteen ninety two 295 00:16:46,120 --> 00:16:48,000 Speaker 1: we were up to a hundred and we started our 296 00:16:48,040 --> 00:16:52,680 Speaker 1: first mutual fund. Nineteen eighty seven, Baroness had fund and 297 00:16:53,400 --> 00:16:57,080 Speaker 1: initially eighty two there were three people Susan Robbins, Lynda 298 00:16:57,120 --> 00:17:01,680 Speaker 1: Martinson and me. Uh. Then nine two had a hundred million, 299 00:17:01,760 --> 00:17:04,720 Speaker 1: and maybe we were ten people. Then now we have 300 00:17:04,800 --> 00:17:08,000 Speaker 1: a hundred. Now we have forty nine point one billion, 301 00:17:08,720 --> 00:17:11,240 Speaker 1: and that we've made our clients forty seven billion in 302 00:17:11,280 --> 00:17:18,560 Speaker 1: profits that I've gone from having h you know, negative 303 00:17:18,560 --> 00:17:21,119 Speaker 1: net worth to a million dollar net worth. And now 304 00:17:21,600 --> 00:17:23,520 Speaker 1: Forbes says I'm one of the wealthiest people in the 305 00:17:23,560 --> 00:17:27,960 Speaker 1: country and I have five and five and a half 306 00:17:28,000 --> 00:17:32,760 Speaker 1: percent of the two billion seven of the money that's 307 00:17:32,800 --> 00:17:37,200 Speaker 1: invested in the mutual funds is me, my two sons 308 00:17:37,200 --> 00:17:40,600 Speaker 1: and me. That's an amazing story. I have to ask 309 00:17:40,920 --> 00:17:45,720 Speaker 1: this so I know you primarily as a small cap manager. 310 00:17:46,320 --> 00:17:50,080 Speaker 1: In fact, the Barren Small Cap Funds is up an 311 00:17:50,080 --> 00:17:53,560 Speaker 1: average of eleven point four percent a year since its inception. 312 00:17:54,040 --> 00:17:57,040 Speaker 1: It's benchmark is the Russell two thousand, which is only 313 00:17:57,160 --> 00:18:01,400 Speaker 1: up seven point four percent. Let's discuss a little bit 314 00:18:01,840 --> 00:18:06,360 Speaker 1: how you built your reputation originally around small caps. Tell 315 00:18:06,440 --> 00:18:09,560 Speaker 1: us a little bit about that. Well, Barren Small Cap 316 00:18:09,640 --> 00:18:12,960 Speaker 1: Fund happens to be managed by Cliff Greenberg, not by me, 317 00:18:13,800 --> 00:18:18,000 Speaker 1: and he's done terrific. And Aaron Growth Fund is managed 318 00:18:18,000 --> 00:18:23,119 Speaker 1: by me. Uh and with with Neil Rosenberg and the 319 00:18:23,400 --> 00:18:28,400 Speaker 1: Cager on that one since that inception in its fourteen 320 00:18:28,480 --> 00:18:33,359 Speaker 1: point one six compared to nine point four for the 321 00:18:33,720 --> 00:18:36,320 Speaker 1: for the rest of two thousands, ten and a half 322 00:18:36,320 --> 00:18:40,480 Speaker 1: for the SMP and then uh so all these funds. 323 00:18:41,080 --> 00:18:45,320 Speaker 1: So starting off the idea that we had originally when 324 00:18:45,320 --> 00:18:49,160 Speaker 1: when I was still doing research in the seventies and 325 00:18:49,280 --> 00:18:55,880 Speaker 1: selling it for commissions. My ideas were smaller companies like McDonald's, Disney, 326 00:18:57,000 --> 00:19:01,960 Speaker 1: Federal Expressed, a Nike, Mattel Highest. They were small companies 327 00:19:02,600 --> 00:19:05,000 Speaker 1: billions two or three billion dollars, Mark kept him. And 328 00:19:05,119 --> 00:19:08,879 Speaker 1: my idea was that I was getting about one and 329 00:19:09,280 --> 00:19:12,480 Speaker 1: in commissions for every idea that I had. And so 330 00:19:12,520 --> 00:19:14,480 Speaker 1: I would go around and if I get home to 331 00:19:14,520 --> 00:19:17,480 Speaker 1: spend six or seven or eight hundred thousand dollars on 332 00:19:17,560 --> 00:19:20,200 Speaker 1: the stock, I would make six or seven or eight 333 00:19:20,200 --> 00:19:24,240 Speaker 1: thousand dollars in commissions. And and then uh, it didn't 334 00:19:24,240 --> 00:19:26,080 Speaker 1: take me long to figure out, Okay, well, if I 335 00:19:26,119 --> 00:19:28,040 Speaker 1: got him to buy a stock for six or seven 336 00:19:28,080 --> 00:19:30,560 Speaker 1: or eight thousand dollar commission, then if I'd gone up 337 00:19:30,600 --> 00:19:32,920 Speaker 1: to sell a stock and I would make another six 338 00:19:33,000 --> 00:19:34,919 Speaker 1: or seven or eight thousand dollars in commissions. That's that 339 00:19:35,000 --> 00:19:36,680 Speaker 1: was my my, you know. So that was how I 340 00:19:36,680 --> 00:19:40,560 Speaker 1: paid the rent. And then after about IBus six or 341 00:19:40,600 --> 00:19:43,800 Speaker 1: seven or eight years, uh I was. I looked back 342 00:19:43,840 --> 00:19:46,640 Speaker 1: and I said, man, I am a disaster. I looked 343 00:19:46,680 --> 00:19:49,640 Speaker 1: at all these companies, saying and they had gone up 344 00:19:49,680 --> 00:19:52,480 Speaker 1: so much, and and uh, I said, I could have 345 00:19:52,520 --> 00:19:55,000 Speaker 1: been rich, you know, said, there's all these things. I was, 346 00:19:55,040 --> 00:19:57,359 Speaker 1: what am I crazy? Looking at these things and selling 347 00:19:57,440 --> 00:20:00,280 Speaker 1: them them so quick? And I have destined day land 348 00:20:01,040 --> 00:20:04,639 Speaker 1: with uh with ken Lan gone. And he calls me 349 00:20:04,720 --> 00:20:07,960 Speaker 1: up one day and he says him, ken Lan going 350 00:20:08,160 --> 00:20:11,280 Speaker 1: we went to college together. Uh, he's got ten years 351 00:20:11,280 --> 00:20:12,800 Speaker 1: older than I am, or eight years older than I am. 352 00:20:12,920 --> 00:20:15,520 Speaker 1: Went to buck now and he said, you know, people 353 00:20:15,560 --> 00:20:17,960 Speaker 1: like us, we gotta stay together. Said people like, what 354 00:20:18,040 --> 00:20:20,400 Speaker 1: are you talking about? And say he says, why don't 355 00:20:20,400 --> 00:20:23,080 Speaker 1: we go to lunch? And uh, so we go to 356 00:20:23,160 --> 00:20:26,600 Speaker 1: lunch at h I guess it was lunch at the 357 00:20:26,600 --> 00:20:30,480 Speaker 1: Waldorf and it was the Bull and Bear restaurant. But 358 00:20:30,960 --> 00:20:34,000 Speaker 1: he was in and as I knew him, he didn't 359 00:20:34,119 --> 00:20:38,040 Speaker 1: you know, And he said, look, you're buying this company, Dalen. Uh, 360 00:20:38,080 --> 00:20:40,639 Speaker 1: and I'm buying it just could come out of bankruptcy. 361 00:20:41,240 --> 00:20:44,000 Speaker 1: And it was run by a guy named san Fredcigaloff. 362 00:20:44,680 --> 00:20:48,400 Speaker 1: And there were two guys who had a business inside 363 00:20:48,400 --> 00:20:52,199 Speaker 1: of that that I felt it was really cool. Uh 364 00:20:52,280 --> 00:20:55,320 Speaker 1: Marcus and what was the other guy's name? They both 365 00:20:55,359 --> 00:20:59,440 Speaker 1: were in Handy Dan ultimately became home Depot and uh 366 00:20:59,760 --> 00:21:02,879 Speaker 1: and and so so I invest in this company for 367 00:21:03,040 --> 00:21:07,440 Speaker 1: my clients. And Kenada's INVESTINGLFS run just killing me every 368 00:21:07,480 --> 00:21:10,159 Speaker 1: time I see something. You fight before the stock. Why 369 00:21:10,200 --> 00:21:12,200 Speaker 1: don't we just do something where we split things. You 370 00:21:12,320 --> 00:21:15,119 Speaker 1: take half and I'll take half. I said, fine, that 371 00:21:15,160 --> 00:21:16,800 Speaker 1: sounds good to me. And if I see something, I'll 372 00:21:16,840 --> 00:21:18,320 Speaker 1: show it to you. You see something, you show it 373 00:21:18,400 --> 00:21:20,840 Speaker 1: to me. And was split at fifty fifty. I said great. 374 00:21:20,880 --> 00:21:22,480 Speaker 1: He was buying it for himself. I was buying it 375 00:21:22,640 --> 00:21:27,119 Speaker 1: for my clients. And stop goes from two dollars to 376 00:21:27,920 --> 00:21:31,240 Speaker 1: four or five dollars to share. I sell my stock 377 00:21:31,960 --> 00:21:35,520 Speaker 1: because I made commissions selling and uh. And he hangs 378 00:21:35,560 --> 00:21:39,119 Speaker 1: on and then ultimately, uh, he write refinances the whole thing, 379 00:21:39,200 --> 00:21:42,040 Speaker 1: and those guys who were running handy Dan get fired. 380 00:21:42,119 --> 00:21:44,360 Speaker 1: And then you go to Ken. He raises the money 381 00:21:44,440 --> 00:21:47,240 Speaker 1: for him and builds home. DEEPO, that's home depot. That's 382 00:21:47,240 --> 00:21:49,480 Speaker 1: where it comes from. And if I had been an 383 00:21:49,520 --> 00:21:51,600 Speaker 1: investor and I stayed with it, you know, it would 384 00:21:51,640 --> 00:21:54,880 Speaker 1: have been so much earlier for me to be successful. Uh. 385 00:21:55,280 --> 00:21:58,520 Speaker 1: But but small companies, companies and other people weren't following 386 00:21:58,600 --> 00:22:01,719 Speaker 1: so much that they're growing real, asked uh and uh, 387 00:22:01,840 --> 00:22:05,600 Speaker 1: and that's that's where we focused. The best week for 388 00:22:05,720 --> 00:22:07,840 Speaker 1: the week before I'm writing about this in my current 389 00:22:07,920 --> 00:22:12,080 Speaker 1: quarterly letter. Um, I was. I got a phone call 390 00:22:12,280 --> 00:22:15,000 Speaker 1: from Chuck matheson the same thing happened with me with 391 00:22:15,119 --> 00:22:19,520 Speaker 1: him where I guess in the eighties. Uh, and he 392 00:22:19,680 --> 00:22:23,640 Speaker 1: and I were both buying international game and market Capp 393 00:22:23,800 --> 00:22:25,720 Speaker 1: was a hundred million dollars. He was buying it to 394 00:22:25,800 --> 00:22:28,280 Speaker 1: take it over. I was buying it to make brokerage commissions. 395 00:22:28,880 --> 00:22:32,199 Speaker 1: And uh and and and uh hell he calls up 396 00:22:32,240 --> 00:22:33,399 Speaker 1: and he said, why don't we And it was the 397 00:22:33,440 --> 00:22:35,720 Speaker 1: same kind of split thing. I said, fine, And so 398 00:22:35,880 --> 00:22:38,520 Speaker 1: I make my doubles or triples or quadruples or something 399 00:22:38,640 --> 00:22:41,280 Speaker 1: and uh and he stays with it, and it goes 400 00:22:41,320 --> 00:22:44,800 Speaker 1: from a hundred million dollars of market Capp to ten 401 00:22:44,880 --> 00:22:47,879 Speaker 1: billions ten billion, A hundred millions of ten billion. He 402 00:22:47,920 --> 00:22:49,800 Speaker 1: told me, I was the only guy ever really understood 403 00:22:50,200 --> 00:22:53,639 Speaker 1: what this megabucks was and and how important it was, 404 00:22:53,800 --> 00:22:57,359 Speaker 1: and how it was just leaking up all these slot 405 00:22:57,400 --> 00:23:01,159 Speaker 1: machines and all these different casinos, and uh, says H. 406 00:23:01,760 --> 00:23:05,680 Speaker 1: And ultimately, like in an guess it was around two thousand's. 407 00:23:06,400 --> 00:23:12,960 Speaker 1: Then the government he sent us in New York wanted 408 00:23:13,040 --> 00:23:19,280 Speaker 1: to have independent directors for independent chairman for mutual funds. 409 00:23:19,359 --> 00:23:22,240 Speaker 1: And Chuck came the chairman of our mutual fund company 410 00:23:22,280 --> 00:23:24,119 Speaker 1: of Barren Funds for five years, and we wanted to 411 00:23:24,160 --> 00:23:29,600 Speaker 1: have an independent director, independent executive chairman, and so he 412 00:23:29,680 --> 00:23:32,919 Speaker 1: calls me up about and now he's in his probably 413 00:23:33,320 --> 00:23:36,320 Speaker 1: eighty five, ninety years old, and he's retired and he's 414 00:23:36,359 --> 00:23:39,040 Speaker 1: living in Reno, and last time his home was about 415 00:23:39,080 --> 00:23:41,119 Speaker 1: a year ago, two years ago, and it's visiting a plant, 416 00:23:41,720 --> 00:23:44,800 Speaker 1: Tesla plant in Reno, and he bites me over and 417 00:23:45,000 --> 00:23:47,200 Speaker 1: spent an afternoon with him. It was so much fun. 418 00:23:47,920 --> 00:23:50,760 Speaker 1: But he calls me up and he's now chairman emeritus 419 00:23:50,920 --> 00:23:54,360 Speaker 1: for Barren Funds and chairman emeritiths also from an international game, 420 00:23:54,960 --> 00:23:57,879 Speaker 1: and it calls me up. He said, Ron, congratulations on 421 00:23:58,480 --> 00:24:02,400 Speaker 1: on on Tesla. He says, you know, I never thought 422 00:24:02,480 --> 00:24:04,399 Speaker 1: this would work, and you know you were right, and 423 00:24:04,480 --> 00:24:07,240 Speaker 1: you hung in there and everyone was criticizing you and 424 00:24:07,400 --> 00:24:10,000 Speaker 1: you believed and you were right. I was wrong and 425 00:24:10,040 --> 00:24:13,080 Speaker 1: everybody else was wrong, and you made congratulations on that. 426 00:24:13,920 --> 00:24:19,600 Speaker 1: And uh. And then I'm talking to my trader who's 427 00:24:19,640 --> 00:24:24,159 Speaker 1: been working at Baron Capital since nineteen uh seven. I 428 00:24:24,240 --> 00:24:26,960 Speaker 1: think he told me, uh, And I'm talking to him 429 00:24:26,960 --> 00:24:33,560 Speaker 1: about the conversation uh uh uh Chuck had with me. 430 00:24:33,840 --> 00:24:36,240 Speaker 1: Oh yeah, Chuck. The way he starts the conversation is 431 00:24:36,720 --> 00:24:39,560 Speaker 1: he says, you know when I first met you in 432 00:24:39,640 --> 00:24:43,320 Speaker 1: the nineteen eighties, Uh all you were you were talking 433 00:24:43,400 --> 00:24:48,639 Speaker 1: about with investing in wireless telephones. And he says, and 434 00:24:48,720 --> 00:24:50,320 Speaker 1: this is this is how I started off my next 435 00:24:50,600 --> 00:24:54,760 Speaker 1: shareholder letter, the letter from Ron. It's a Ron. Here's 436 00:24:54,760 --> 00:24:57,920 Speaker 1: the quote. Ron, when I first met you thirty five 437 00:24:58,000 --> 00:25:02,480 Speaker 1: years ago, you were investing in wireless telephones. Wow, that's 438 00:25:02,520 --> 00:25:05,440 Speaker 1: a pretty fear idea. I thought, that's Chucks. He's thinking, 439 00:25:05,720 --> 00:25:09,560 Speaker 1: I'm in the nineties eighties and I'm investing in US 440 00:25:09,600 --> 00:25:13,919 Speaker 1: Cellular and mccau u Cellular, in lynd Broadcasting and uh 441 00:25:14,600 --> 00:25:18,960 Speaker 1: uh George Lindeman's metromobile and uh and he says, Man, 442 00:25:19,040 --> 00:25:21,800 Speaker 1: that's crazy, the wireless telephones. I was thinking about Maxwell 443 00:25:21,880 --> 00:25:24,680 Speaker 1: smart gets smart on television. You know, you take off 444 00:25:24,720 --> 00:25:27,359 Speaker 1: your shoe and you're talking to your shoe and uh 445 00:25:27,520 --> 00:25:31,520 Speaker 1: and and and of course wireless phones. That's that's come 446 00:25:31,760 --> 00:25:35,040 Speaker 1: you know everything. And and then I was talking to uh, 447 00:25:36,440 --> 00:25:42,000 Speaker 1: to David our Trader about conversation. So he says, you know, 448 00:25:42,200 --> 00:25:44,640 Speaker 1: and I was talking about Tesla, and Chuck just called 449 00:25:44,680 --> 00:25:48,520 Speaker 1: to congratulate me about Tesla. And he says, Ron, you 450 00:25:48,680 --> 00:25:51,520 Speaker 1: always invested in things like this you know, when I 451 00:25:51,640 --> 00:25:54,840 Speaker 1: first joined you in the nineteen eighties, you were talking 452 00:25:54,880 --> 00:25:57,720 Speaker 1: about cellular telephones. You were just getting back with Judy 453 00:25:57,840 --> 00:26:01,119 Speaker 1: from a vacation in Italy, a week vacation in Italy, 454 00:26:01,560 --> 00:26:05,760 Speaker 1: and you just, uh said, and everywhere I go, people 455 00:26:05,760 --> 00:26:08,200 Speaker 1: are talking on these little cell phones. This is gonna 456 00:26:08,240 --> 00:26:11,200 Speaker 1: be unbelievable. I have, whether you're rich or whether you're poor. 457 00:26:11,240 --> 00:26:14,240 Speaker 1: At that time, you know, uh, we had bought a 458 00:26:14,440 --> 00:26:18,639 Speaker 1: when we started married Capital, I bought a telephone. I 459 00:26:18,760 --> 00:26:21,680 Speaker 1: bought one. It was five thousand dollars. It was a briefcase, 460 00:26:21,760 --> 00:26:24,560 Speaker 1: the size of a briefcase. And now it's late eighties 461 00:26:24,640 --> 00:26:26,880 Speaker 1: and they're and they're down to smaller phones. They're still 462 00:26:27,000 --> 00:26:29,440 Speaker 1: they look like a um, you know, a brick or 463 00:26:29,520 --> 00:26:32,200 Speaker 1: something the size of a brick. And but you know, 464 00:26:32,720 --> 00:26:34,679 Speaker 1: and he said, and you were talking about it then, 465 00:26:35,119 --> 00:26:36,800 Speaker 1: and that's all you want to invest in then, and 466 00:26:37,119 --> 00:26:39,959 Speaker 1: all these companies, so you always invested in those kind 467 00:26:40,000 --> 00:26:43,199 Speaker 1: of things, and so so the idea was initially, uh 468 00:26:43,320 --> 00:26:47,119 Speaker 1: to investing companies that were worth more than they were 469 00:26:47,119 --> 00:26:49,960 Speaker 1: selling more in the stock market. And if you could 470 00:26:50,000 --> 00:26:53,280 Speaker 1: buy a hotel room, for example, or uh, you know, 471 00:26:53,400 --> 00:26:55,520 Speaker 1: if it cost you a hundred thousand dollars to build, 472 00:26:55,600 --> 00:26:57,560 Speaker 1: and you made ten thousand dollars a year after you 473 00:26:57,680 --> 00:26:59,720 Speaker 1: built it, and you could buy it in the stock 474 00:26:59,800 --> 00:27:03,600 Speaker 1: more could for seven seventy dollars. Uh and and then 475 00:27:03,640 --> 00:27:06,640 Speaker 1: it would go to the value that That's how it started. 476 00:27:07,200 --> 00:27:09,280 Speaker 1: And then, uh, you know when when I when I 477 00:27:09,440 --> 00:27:10,879 Speaker 1: went out of my own, I figured that was a 478 00:27:10,960 --> 00:27:13,120 Speaker 1: safe thing to do. I didn't, you know, I Warren 479 00:27:13,200 --> 00:27:16,639 Speaker 1: Buffetts thing where you buy the cigarette butts on the street, 480 00:27:17,240 --> 00:27:20,159 Speaker 1: and and Mario Gabelly, you know, it's about you know, 481 00:27:20,240 --> 00:27:23,359 Speaker 1: buying things, you know, discounted cash flow. And but that 482 00:27:23,520 --> 00:27:25,920 Speaker 1: wasn't really what I love doing. I loved finding these 483 00:27:26,040 --> 00:27:30,280 Speaker 1: businesses that were that could grow tremendously from from what 484 00:27:30,440 --> 00:27:34,280 Speaker 1: they were now. And and that's where so it started off, 485 00:27:34,760 --> 00:27:37,960 Speaker 1: finding smaller companies that people ignored. But then what would 486 00:27:38,000 --> 00:27:40,400 Speaker 1: happen is that, you know, out of the ten things 487 00:27:40,480 --> 00:27:44,359 Speaker 1: that you bought, uh, two or three would be amazing successes, 488 00:27:44,880 --> 00:27:46,680 Speaker 1: and then uh, you know a few of them would 489 00:27:46,680 --> 00:27:48,760 Speaker 1: be sort of ordinary. The more you brought up and 490 00:27:48,800 --> 00:27:50,600 Speaker 1: the harder it was to sell them to get out 491 00:27:50,640 --> 00:27:52,960 Speaker 1: at the other side, and then they're always you left 492 00:27:53,040 --> 00:27:55,399 Speaker 1: over with things that you know, how do you get 493 00:27:55,440 --> 00:27:58,120 Speaker 1: out of them? And you and the answer was you don't. 494 00:27:58,720 --> 00:28:02,359 Speaker 1: So so I was that interested in that and uh 495 00:28:02,440 --> 00:28:06,400 Speaker 1: and I wanted to have a business that was going 496 00:28:06,520 --> 00:28:10,400 Speaker 1: to last for a long time. And so again going 497 00:28:10,440 --> 00:28:13,120 Speaker 1: back to my parents, I wanted to have a business 498 00:28:13,200 --> 00:28:16,680 Speaker 1: that people uh like my parents, I would be able 499 00:28:16,720 --> 00:28:19,920 Speaker 1: to invest in the stock market. Uh. You know, and 500 00:28:20,000 --> 00:28:24,639 Speaker 1: because I always believed and and uh so so I 501 00:28:24,680 --> 00:28:27,359 Speaker 1: always believe in this sort of thing, and and and 502 00:28:27,520 --> 00:28:30,600 Speaker 1: the idea behind the mutual funds was that here's a 503 00:28:30,680 --> 00:28:33,199 Speaker 1: way that I would be able to give a service 504 00:28:33,320 --> 00:28:36,680 Speaker 1: to people like my parents so they could save for 505 00:28:37,359 --> 00:28:42,120 Speaker 1: their retirements in their life events. I got a phone 506 00:28:42,160 --> 00:28:46,040 Speaker 1: call about so so uh you know. So we have 507 00:28:46,160 --> 00:28:49,800 Speaker 1: a house in Long Island and uh I went in Florida, 508 00:28:49,840 --> 00:28:51,440 Speaker 1: where I am now, and then of course we live 509 00:28:51,440 --> 00:28:55,440 Speaker 1: in New York and uh in our house in Long Island. Uh, 510 00:28:55,960 --> 00:28:59,920 Speaker 1: one of my sons and his wife were staying there 511 00:29:00,000 --> 00:29:04,560 Speaker 1: are about a month or two ago, and we get 512 00:29:05,000 --> 00:29:07,120 Speaker 1: a and he calls me up and he said, Dad, 513 00:29:07,600 --> 00:29:12,280 Speaker 1: I just got four bottles of dom peren young from 514 00:29:13,160 --> 00:29:19,360 Speaker 1: from Uh. He tells me who's from? And I said, oh, wow, Bob. 515 00:29:19,480 --> 00:29:23,120 Speaker 1: He he worked with me when I was at her 516 00:29:23,240 --> 00:29:27,720 Speaker 1: Spells and Stern from deventy three to eighty two. It 517 00:29:27,840 --> 00:29:31,360 Speaker 1: was a retail stockbroker. And he sends me four bottles 518 00:29:31,400 --> 00:29:33,240 Speaker 1: of John Premier. Unit said, man, that's a lot of money. 519 00:29:33,800 --> 00:29:35,760 Speaker 1: I gotta call him to thank them. I can't understand 520 00:29:35,760 --> 00:29:39,440 Speaker 1: why he would send me campaigne. I pulled him up 521 00:29:40,000 --> 00:29:43,280 Speaker 1: and he says, roun Uh. You know when seventy three 522 00:29:43,360 --> 00:29:45,320 Speaker 1: to eight two, when you were working at her Spelled 523 00:29:45,360 --> 00:29:48,080 Speaker 1: and Stern, and then ultimately you and Susan who was 524 00:29:48,160 --> 00:29:51,440 Speaker 1: my assistant left. Susan is now vice president Baron Capital 525 00:29:51,480 --> 00:29:54,920 Speaker 1: and she's our health care analyst. Uh, and left. And 526 00:29:55,000 --> 00:29:57,960 Speaker 1: I said, I have that. And you were selling your 527 00:29:58,080 --> 00:30:02,080 Speaker 1: research to hedge institutions and I saw you were doing 528 00:30:02,800 --> 00:30:06,760 Speaker 1: and and I have and I have retail broker, retail broker, 529 00:30:06,880 --> 00:30:10,840 Speaker 1: and they were my my clients. I pay you back 530 00:30:10,880 --> 00:30:12,959 Speaker 1: then some of your ideas that I said, but if 531 00:30:13,000 --> 00:30:15,080 Speaker 1: I have a chance to invest with you, I am 532 00:30:15,120 --> 00:30:17,680 Speaker 1: going to invest with you. And so when you started 533 00:30:17,680 --> 00:30:19,960 Speaker 1: your first fund in eighty seven, I invested in it. 534 00:30:20,160 --> 00:30:24,280 Speaker 1: And then when you started Barren Parker's funds, and like 535 00:30:24,360 --> 00:30:27,120 Speaker 1: the very cool idea. So I did something that I 536 00:30:27,320 --> 00:30:30,960 Speaker 1: never do, and I advised my clients they should never do. 537 00:30:31,520 --> 00:30:35,240 Speaker 1: I borrowed two hundred thousand dollars to invest in Barrenpartments 538 00:30:35,280 --> 00:30:38,040 Speaker 1: funds I had to invest with you, and and so 539 00:30:38,280 --> 00:30:40,280 Speaker 1: you put in the two And then he said, and 540 00:30:40,360 --> 00:30:43,400 Speaker 1: then after it doubled or tripled, I sold half of it, 541 00:30:44,120 --> 00:30:46,560 Speaker 1: and and I left the other hundred thousand dollars in. 542 00:30:47,280 --> 00:30:49,760 Speaker 1: And the other hundred thousand dollars that I took out, 543 00:30:50,280 --> 00:30:54,600 Speaker 1: I put that into, uh, this little fund of funds 544 00:30:54,920 --> 00:30:59,000 Speaker 1: called Castle, which I wanted to which which which we 545 00:30:59,080 --> 00:31:02,400 Speaker 1: had at Barrens on a parent capital for some of 546 00:31:02,440 --> 00:31:04,680 Speaker 1: the employees to invest in, some of the people who 547 00:31:04,720 --> 00:31:07,160 Speaker 1: I was friends with, and and then some of it 548 00:31:07,240 --> 00:31:10,520 Speaker 1: I was doing myself. And so he says, and then, uh, 549 00:31:10,680 --> 00:31:14,440 Speaker 1: that that hundred thousand dollars left in Barren Partner's fun 550 00:31:15,000 --> 00:31:19,080 Speaker 1: that is now over forty thousand shares a Barren Partner's 551 00:31:19,120 --> 00:31:22,240 Speaker 1: fun It's worth over seven million dollars. So the hundred 552 00:31:22,320 --> 00:31:25,640 Speaker 1: thousand became worth over seven millions. And then the hundred 553 00:31:25,720 --> 00:31:30,360 Speaker 1: thousand I took out that became worth a million seven 554 00:31:31,160 --> 00:31:33,680 Speaker 1: And and he says, and basically I want you to 555 00:31:33,760 --> 00:31:36,120 Speaker 1: know that you've paid for my son to go to 556 00:31:36,240 --> 00:31:38,480 Speaker 1: medical school and just graduated from medical school. You've paid 557 00:31:38,520 --> 00:31:40,880 Speaker 1: for him to go to medical school. In addition to that, 558 00:31:41,000 --> 00:31:44,840 Speaker 1: I have another child's disabled and I never really understood 559 00:31:44,880 --> 00:31:47,040 Speaker 1: how it's going to take care of him for the 560 00:31:47,080 --> 00:31:49,680 Speaker 1: rest of my life. And uh, you've taken care of 561 00:31:49,840 --> 00:31:52,920 Speaker 1: him for the rest of my life. Um, so so 562 00:31:53,400 --> 00:31:56,200 Speaker 1: so here so there isn't anything that you could do 563 00:31:56,680 --> 00:31:59,440 Speaker 1: that I wouldn't that I wouldn't believe in. And I 564 00:31:59,600 --> 00:32:03,360 Speaker 1: walked on the street. My my youngest son got married, 565 00:32:04,160 --> 00:32:08,680 Speaker 1: uh last September, uh a year and a half ago, 566 00:32:09,520 --> 00:32:13,960 Speaker 1: and uh and hiss from from Virginia Beach and his 567 00:32:14,120 --> 00:32:17,320 Speaker 1: parents came up, of course to the wedding and everything. 568 00:32:17,360 --> 00:32:22,240 Speaker 1: We have wedding in our house and uh and when 569 00:32:23,000 --> 00:32:26,800 Speaker 1: uh they came to our office and when uh, we're 570 00:32:26,880 --> 00:32:30,080 Speaker 1: walking home from our office in the General Motors Building 571 00:32:30,840 --> 00:32:34,920 Speaker 1: to our apartment. As we're walking out Madison Avenue, two 572 00:32:35,000 --> 00:32:39,240 Speaker 1: people jumped out of doorways to say thank you, Ron, 573 00:32:39,640 --> 00:32:43,960 Speaker 1: thank you Ron, and uh and Jane's mother who I'm 574 00:32:44,040 --> 00:32:48,800 Speaker 1: walking with, Judy's walking with her dad. Uh, she said, 575 00:32:49,240 --> 00:32:52,800 Speaker 1: does this always happen to you. It's unbelievable. All over 576 00:32:52,840 --> 00:32:55,280 Speaker 1: the place, people are always saying thank you when I 577 00:32:55,400 --> 00:32:58,720 Speaker 1: when we have our annual meeting, they come out of 578 00:32:58,880 --> 00:33:03,200 Speaker 1: our conference afterwards, it's the same thing where they say, gee, 579 00:33:03,240 --> 00:33:05,680 Speaker 1: you know, thank you for my life, thank you for 580 00:33:05,800 --> 00:33:08,920 Speaker 1: doing this, thank you for it's it's amazing. One of 581 00:33:09,000 --> 00:33:12,760 Speaker 1: my this guy who is telling me about Ray Novak actually, 582 00:33:12,840 --> 00:33:17,959 Speaker 1: who was my high school friend who was living in Maplewood, Uh, 583 00:33:18,320 --> 00:33:20,160 Speaker 1: when I was living in his basement trying to get 584 00:33:20,200 --> 00:33:22,720 Speaker 1: a job on Wall Street. He's now a director of 585 00:33:22,800 --> 00:33:26,160 Speaker 1: Barren's funds and he has been for five thirty years. 586 00:33:26,920 --> 00:33:30,880 Speaker 1: And and uh, you know, he calls me up and 587 00:33:30,960 --> 00:33:35,080 Speaker 1: he says, you know, I'm I'm seventy seven now and uh, 588 00:33:35,320 --> 00:33:40,120 Speaker 1: and I've been investing with you, um the very beginning, 589 00:33:40,760 --> 00:33:44,400 Speaker 1: and thank you for all this. You know you I 590 00:33:44,480 --> 00:33:46,680 Speaker 1: don't have to think about stuff anymore. And I was 591 00:33:46,800 --> 00:33:49,040 Speaker 1: for a while, I was trying to pick stocks, and 592 00:33:49,160 --> 00:33:51,640 Speaker 1: you know, I try to read a lot, and he said, 593 00:33:51,680 --> 00:33:55,200 Speaker 1: I can't pick stocks. You know. I come to your meetings, 594 00:33:55,240 --> 00:33:57,840 Speaker 1: you know, to the board meetings every three months, and 595 00:33:58,080 --> 00:34:00,720 Speaker 1: I see what you're doing. And I listened to the 596 00:34:00,760 --> 00:34:03,160 Speaker 1: ANALYSTSIA working for you. There's a hundred and seventy two 597 00:34:03,200 --> 00:34:06,800 Speaker 1: people in now a parent capital and forty one or 598 00:34:06,960 --> 00:34:10,600 Speaker 1: forty two our analysts and portfolio managers has been there 599 00:34:10,600 --> 00:34:14,640 Speaker 1: a really long time. And UH, and I see and 600 00:34:14,800 --> 00:34:17,399 Speaker 1: and well every at all of them a long time. 601 00:34:17,440 --> 00:34:20,799 Speaker 1: And we hire one or two people a year, three 602 00:34:20,960 --> 00:34:24,399 Speaker 1: sometimes and we hired ten or fifteen people a year 603 00:34:24,440 --> 00:34:29,480 Speaker 1: in total. And you know, they could be in risk managements, 604 00:34:29,600 --> 00:34:37,240 Speaker 1: or they can be legal accounting, applying, compliance, sales, hum. 605 00:34:38,600 --> 00:34:43,520 Speaker 1: All these two I t h. Of course, I wouldn't 606 00:34:43,520 --> 00:34:46,680 Speaker 1: have any clues far as what we need to hire, 607 00:34:46,880 --> 00:34:49,680 Speaker 1: because I know what I need to hire for research, 608 00:34:49,760 --> 00:34:51,239 Speaker 1: but all these other people, So I'm in charge of 609 00:34:51,320 --> 00:34:56,040 Speaker 1: forty people, and uh, and Lynda Mornson who is the 610 00:34:56,320 --> 00:35:01,240 Speaker 1: third employee, Susan Robbins and I and Linda Uh. She's 611 00:35:01,280 --> 00:35:05,280 Speaker 1: the president of the firm and chairman of the mutual 612 00:35:05,360 --> 00:35:08,080 Speaker 1: funds or she has all these different titles and chief 613 00:35:08,120 --> 00:35:10,759 Speaker 1: operating after and she's the one who hires all these 614 00:35:10,800 --> 00:35:14,480 Speaker 1: other people that we need. And initially other guys there 615 00:35:14,480 --> 00:35:17,920 Speaker 1: would say, why are we hiring? What is that all about? 616 00:35:18,040 --> 00:35:21,440 Speaker 1: What is this attribute? What do those people do and 617 00:35:21,719 --> 00:35:24,920 Speaker 1: always you know, saying and thinking, See if if we're 618 00:35:24,960 --> 00:35:27,799 Speaker 1: hiring all these other people, then that means that I'm 619 00:35:27,800 --> 00:35:30,719 Speaker 1: going to make less money. And so because some of 620 00:35:30,800 --> 00:35:32,719 Speaker 1: that money is going to them instead it to me. 621 00:35:33,280 --> 00:35:38,320 Speaker 1: That's the mind mindset the people have when um business 622 00:35:38,360 --> 00:35:42,440 Speaker 1: growth and everyone thinks that it's growing because they're great. 623 00:35:42,680 --> 00:35:46,480 Speaker 1: Of course they are great, but everyone thinks everything is 624 00:35:46,520 --> 00:35:48,320 Speaker 1: because of them until they go home at night and 625 00:35:48,520 --> 00:35:51,640 Speaker 1: think about it and to say, oh, maybe it's not 626 00:35:51,719 --> 00:35:54,800 Speaker 1: all because of me. But but then all of a sudden, 627 00:35:55,280 --> 00:35:58,200 Speaker 1: small smaller piece of a bigger pie. Yeah, And but 628 00:35:58,280 --> 00:36:01,000 Speaker 1: then all of a sudden everyone's g I can't write 629 00:36:01,080 --> 00:36:04,880 Speaker 1: my shareholder letters without talking to Claudia. And so Claudia 630 00:36:05,000 --> 00:36:08,560 Speaker 1: is this a young woman who into M I T 631 00:36:08,840 --> 00:36:11,840 Speaker 1: and mask and says all this risk metrics and everything 632 00:36:11,880 --> 00:36:14,520 Speaker 1: that she looks at and explains things to me. But 633 00:36:14,719 --> 00:36:17,719 Speaker 1: she can explain where we're making money, where we're not 634 00:36:17,880 --> 00:36:20,920 Speaker 1: and ron taking this much risk. And and for me, 635 00:36:21,040 --> 00:36:25,040 Speaker 1: I don't really care that much about I have to 636 00:36:25,200 --> 00:36:28,759 Speaker 1: see where I'm making where I'm losing and and uh, 637 00:36:28,920 --> 00:36:31,239 Speaker 1: and to make sure that things don't get too out 638 00:36:31,280 --> 00:36:34,120 Speaker 1: of whack. But for the most part. Uh you know 639 00:36:34,200 --> 00:36:38,719 Speaker 1: Henry Fernandez from from from ms C. I. Uh. So 640 00:36:38,920 --> 00:36:42,040 Speaker 1: he invites me to speak to his board of directors 641 00:36:42,800 --> 00:36:45,800 Speaker 1: and and he says, uh, you know, he wants to 642 00:36:46,200 --> 00:36:50,120 Speaker 1: talk about capital allocations and about investments that he should 643 00:36:50,120 --> 00:36:52,839 Speaker 1: be making and shouldn't be buying back stock or she's 644 00:36:52,880 --> 00:36:56,800 Speaker 1: paying out dividends or she's making acquisitions, or what should 645 00:36:56,800 --> 00:36:59,160 Speaker 1: he be doing? And do I like it? Do I 646 00:36:59,239 --> 00:37:02,360 Speaker 1: like this? And I talked to the board and but 647 00:37:02,480 --> 00:37:05,520 Speaker 1: he says, you know, uh, most of the things that 648 00:37:05,800 --> 00:37:07,719 Speaker 1: we do, I mean that's not what you do. You're 649 00:37:07,760 --> 00:37:11,640 Speaker 1: an investor. I mean you find companies, uh you think 650 00:37:11,760 --> 00:37:15,239 Speaker 1: are going to become dramatically an MSCI said. Henry says, 651 00:37:15,560 --> 00:37:18,200 Speaker 1: you know, run, I would not have a public company 652 00:37:18,280 --> 00:37:21,560 Speaker 1: were not for you, nine in two thousand nine when 653 00:37:21,600 --> 00:37:23,400 Speaker 1: I'm going public, or two thousand and eight when I'm 654 00:37:23,440 --> 00:37:26,840 Speaker 1: going to public, I couldn't go public without you doing it. 655 00:37:27,080 --> 00:37:30,239 Speaker 1: He has an immigrant his parents. Uh they had Uh 656 00:37:30,680 --> 00:37:34,920 Speaker 1: dad was a general in Venezuela and there was a change, 657 00:37:35,480 --> 00:37:38,080 Speaker 1: a coup and they had to flee from the country. 658 00:37:38,120 --> 00:37:40,320 Speaker 1: And he goes to Morgan Stanley. That's what Morgan Stanley 659 00:37:40,400 --> 00:37:45,120 Speaker 1: MSc I uh, and he starts the business and then ultimately, uh, 660 00:37:45,560 --> 00:37:48,239 Speaker 1: he let the Morgan Stanley doesn't bring in public. But 661 00:37:48,400 --> 00:37:51,080 Speaker 1: when he goes public and the market isn't receptives, but 662 00:37:51,200 --> 00:37:54,560 Speaker 1: we even invest in the company, and and then uh, 663 00:37:55,320 --> 00:37:57,399 Speaker 1: and it stopped doubles, and then it goes back down. 664 00:37:57,440 --> 00:38:00,279 Speaker 1: And now we've made about twenty times our money. And said, 665 00:38:00,440 --> 00:38:04,399 Speaker 1: you know, I often I often asked myself that how 666 00:38:04,719 --> 00:38:08,120 Speaker 1: is it. You know, some other guys at Barren Capital sold, 667 00:38:09,000 --> 00:38:11,960 Speaker 1: but you didn't. You always brought more and and you 668 00:38:12,120 --> 00:38:15,080 Speaker 1: hung in there the whole time. And other people were 669 00:38:15,120 --> 00:38:20,960 Speaker 1: criticizing for for this acquisition, but you understand the strategy 670 00:38:21,080 --> 00:38:24,080 Speaker 1: of what we were trying to accomplish. And while that's 671 00:38:24,160 --> 00:38:28,680 Speaker 1: not you know, you're not competing against an index. You 672 00:38:28,760 --> 00:38:31,440 Speaker 1: beat the indexes all the time, but you know, not 673 00:38:31,800 --> 00:38:34,919 Speaker 1: every single year, but over the long term you kill them. 674 00:38:35,480 --> 00:38:40,040 Speaker 1: And but but uh, you know and and and all 675 00:38:40,120 --> 00:38:43,239 Speaker 1: the things I described everyone else about uh, you know, 676 00:38:43,440 --> 00:38:47,919 Speaker 1: volatility and standard deviation, just everything I described everyone else. 677 00:38:48,320 --> 00:38:52,680 Speaker 1: And that's important that they need to have. You're an investor. 678 00:38:53,200 --> 00:38:56,439 Speaker 1: You find these businesses and whether it goes upward down, 679 00:38:56,840 --> 00:38:59,880 Speaker 1: you don't think about it. J. Pritsker, who was one 680 00:38:59,880 --> 00:39:04,399 Speaker 1: of the people who who who was the first really 681 00:39:04,480 --> 00:39:08,160 Speaker 1: mentor when I when I was starting, and and he 682 00:39:08,320 --> 00:39:12,600 Speaker 1: told me I was investment highest and then and and 683 00:39:12,960 --> 00:39:15,839 Speaker 1: he told me once he said, Ron, you know more 684 00:39:15,840 --> 00:39:18,520 Speaker 1: about HIGAHT than I know about Highest. He says, you 685 00:39:18,560 --> 00:39:23,920 Speaker 1: know and and and But the idea was about trying 686 00:39:24,000 --> 00:39:28,600 Speaker 1: to understand the businesses in which we're investing so well 687 00:39:29,280 --> 00:39:31,560 Speaker 1: that you can just ride to it. And he would 688 00:39:31,600 --> 00:39:34,279 Speaker 1: tell me, he says, I don't ever think about the 689 00:39:34,440 --> 00:39:38,640 Speaker 1: price of a stock. But during the day, you know, 690 00:39:38,760 --> 00:39:41,279 Speaker 1: during the year, the only time I ever think about 691 00:39:41,440 --> 00:39:43,800 Speaker 1: stock prices is when I'm either going to buy or 692 00:39:43,800 --> 00:39:46,440 Speaker 1: whether I'm going to sell. Let's talk a little bit 693 00:39:47,160 --> 00:39:51,520 Speaker 1: about how you put the long in long term investing. 694 00:39:52,040 --> 00:39:57,480 Speaker 1: A couple of names you've owned Charles Schwab since Choice 695 00:39:57,560 --> 00:40:02,520 Speaker 1: Hotels since ninety six, Veiled Resources. It's where do you 696 00:40:02,880 --> 00:40:07,440 Speaker 1: get the conviction to be so long term in your 697 00:40:07,560 --> 00:40:12,600 Speaker 1: core holdings. There's something about every business. The most important 698 00:40:12,719 --> 00:40:15,080 Speaker 1: element of a bit. Of course, they got to grow 699 00:40:15,960 --> 00:40:18,080 Speaker 1: and you really got to like and trust the people. 700 00:40:19,000 --> 00:40:24,480 Speaker 1: Uh and uh. But what is important. It's about competitive advantage. 701 00:40:25,239 --> 00:40:28,760 Speaker 1: What is it about these businesses in which you've invested, 702 00:40:29,200 --> 00:40:32,879 Speaker 1: which we've invested, to give them a chance to last 703 00:40:32,920 --> 00:40:35,400 Speaker 1: for a long time and give the pricing power. In 704 00:40:35,480 --> 00:40:38,239 Speaker 1: the case that Chall Schuab, that was the we had 705 00:40:38,280 --> 00:40:43,120 Speaker 1: a mutual fund business and had a hundred million dollars 706 00:40:43,200 --> 00:40:48,240 Speaker 1: in management. Fifty was the mutual fund, fifty was separate accounts. 707 00:40:48,320 --> 00:40:51,520 Speaker 1: We could not make that business grow eight seven it's 708 00:40:51,560 --> 00:40:55,520 Speaker 1: fifty million mutual fund. We had fifty million mutual funds. 709 00:40:55,800 --> 00:40:57,880 Speaker 1: It couldn't make a grow And all of a sudden 710 00:40:57,880 --> 00:41:00,759 Speaker 1: we get into Chall Schwab on the plat forms. We've 711 00:41:00,840 --> 00:41:04,160 Speaker 1: learned about financial advisors. We learned about I had no 712 00:41:04,239 --> 00:41:08,480 Speaker 1: idea who they were, like you r a S and UH. 713 00:41:08,719 --> 00:41:10,560 Speaker 1: We learned about them and we learned that they're clearing 714 00:41:10,640 --> 00:41:13,960 Speaker 1: through Schwab and UH and and they have SWAB has 715 00:41:14,040 --> 00:41:17,239 Speaker 1: a platform, the mutual fund marketplace. And then they had 716 00:41:17,320 --> 00:41:21,680 Speaker 1: once source and we got on UH. We got people 717 00:41:22,480 --> 00:41:25,960 Speaker 1: who were advisors to recommend to charl Schwab, which was 718 00:41:26,680 --> 00:41:30,000 Speaker 1: for twenty th hours we would they would have to 719 00:41:30,080 --> 00:41:32,120 Speaker 1: do the work and they weren't sure they were going 720 00:41:32,200 --> 00:41:36,400 Speaker 1: to have a worthwhile spend on us. Where with the 721 00:41:36,480 --> 00:41:38,279 Speaker 1: demands so we got a whole bunch of people to call. 722 00:41:38,960 --> 00:41:41,960 Speaker 1: They said, okay, we'll put you on, and they put 723 00:41:42,040 --> 00:41:44,440 Speaker 1: us on and we started. UH. They said a lot 724 00:41:44,480 --> 00:41:46,880 Speaker 1: of people know who you are, but UH and I 725 00:41:46,960 --> 00:41:50,400 Speaker 1: how to buy what was telling And we got on 726 00:41:50,480 --> 00:41:54,319 Speaker 1: the platform, are funded well, we got recommended, we got 727 00:41:54,560 --> 00:41:57,440 Speaker 1: uh one of the top fund choices, and all of 728 00:41:57,480 --> 00:41:59,480 Speaker 1: a sudden where we couldn't get any money coming in 729 00:42:00,040 --> 00:42:02,719 Speaker 1: starting in ten thousand a day, fifty thousand a day, 730 00:42:02,760 --> 00:42:06,160 Speaker 1: a hundred thousand dollars a day, and then UH we 731 00:42:06,280 --> 00:42:10,000 Speaker 1: started growing. And so when I saw that happening and 732 00:42:10,120 --> 00:42:12,080 Speaker 1: it all came from Schwab, I said, wow, I better 733 00:42:12,160 --> 00:42:15,560 Speaker 1: really studied charl Schwab, and I started Charles Schwab. And 734 00:42:15,640 --> 00:42:18,480 Speaker 1: I saw that people were leaving big brokerage firms to 735 00:42:18,800 --> 00:42:22,760 Speaker 1: go on their own and then use Charl Schwab to clear. 736 00:42:23,480 --> 00:42:25,640 Speaker 1: And they didn't want to sell the product that the 737 00:42:25,880 --> 00:42:29,359 Speaker 1: brokerage firms that they were working for, we're asking them 738 00:42:29,400 --> 00:42:32,479 Speaker 1: to sell. And they didn't want to just raise money. 739 00:42:32,560 --> 00:42:36,000 Speaker 1: They wanted to uh, to have their own business. And 740 00:42:36,480 --> 00:42:38,640 Speaker 1: and so it made sense to me, And and I 741 00:42:38,800 --> 00:42:43,279 Speaker 1: really like Chuck. In fact, he was just being honored fairly. Uh, 742 00:42:43,719 --> 00:42:47,200 Speaker 1: I guess the last few years, uh at some restaurants 743 00:42:47,239 --> 00:42:51,040 Speaker 1: downtown and uh and and he invited me to be 744 00:42:52,160 --> 00:42:55,759 Speaker 1: one of the people at you know, you know, at 745 00:42:55,840 --> 00:42:59,920 Speaker 1: this lunch, at this dinner, and and then I don't know, 746 00:43:00,040 --> 00:43:02,160 Speaker 1: maybe a hundred people were there, a hundred fifty people 747 00:43:02,640 --> 00:43:05,799 Speaker 1: and see I was up there, and and he said, 748 00:43:05,880 --> 00:43:09,560 Speaker 1: and he called me out from from from the podium 749 00:43:09,600 --> 00:43:13,440 Speaker 1: about how you know, people like Ron Barron were able 750 00:43:13,520 --> 00:43:16,480 Speaker 1: to be offered to his clients, which was a really 751 00:43:16,600 --> 00:43:21,920 Speaker 1: good deal to Joshuab they're responsible. It would be crazy 752 00:43:22,080 --> 00:43:25,600 Speaker 1: for me to have a business like ours that couldn't grow. 753 00:43:25,719 --> 00:43:27,640 Speaker 1: And all of a sudden we get his platform and grow, 754 00:43:28,040 --> 00:43:30,000 Speaker 1: and for me not to realize that was a really 755 00:43:30,080 --> 00:43:32,320 Speaker 1: big opportunity, had an invest in it. So we invest 756 00:43:32,360 --> 00:43:34,399 Speaker 1: in it. We made fifty times their money. Fifty times 757 00:43:34,440 --> 00:43:36,800 Speaker 1: their money so far so far? Are you are you 758 00:43:36,880 --> 00:43:40,400 Speaker 1: still long, Charles Schwab all this time? Yes, that's thirty 759 00:43:40,480 --> 00:43:45,440 Speaker 1: years ago. That's amazing. I know your turnover rate is 760 00:43:45,520 --> 00:43:49,600 Speaker 1: about five to seven percent, and the Baron Growth Fund 761 00:43:49,800 --> 00:43:54,960 Speaker 1: the average turnover is under three. That very much stands 762 00:43:55,000 --> 00:43:59,000 Speaker 1: out compared to your peers who often have turnover rates 763 00:43:59,040 --> 00:44:02,719 Speaker 1: of fifty or a hun or even more than will 764 00:44:02,760 --> 00:44:06,319 Speaker 1: turn over a whole portfolio, you know, twice a year. 765 00:44:07,320 --> 00:44:10,520 Speaker 1: What are the advantages of the buy and sell approach 766 00:44:10,680 --> 00:44:13,719 Speaker 1: that that you've embraced. When I was describing to you 767 00:44:13,800 --> 00:44:17,479 Speaker 1: before about Disney and McDonald's and cetera, Express and Nike 768 00:44:18,600 --> 00:44:22,520 Speaker 1: in the nineteen seventies, uh I had been remained an 769 00:44:22,560 --> 00:44:25,000 Speaker 1: investor in all those companies. They were up fifty sixty, 770 00:44:25,200 --> 00:44:28,560 Speaker 1: and we're investing in Disney in the nineteen seventies, when 771 00:44:28,600 --> 00:44:32,400 Speaker 1: they were building disney World in Florida, they had disney 772 00:44:32,520 --> 00:44:35,759 Speaker 1: Land in California, which was five thousand acres h and 773 00:44:36,160 --> 00:44:40,120 Speaker 1: everyone around them built other properties and made all that 774 00:44:40,239 --> 00:44:42,640 Speaker 1: extra money, and you know, in the Orange Groves in 775 00:44:42,719 --> 00:44:45,880 Speaker 1: California and in Florida, they said, Okay, we're doing this 776 00:44:45,960 --> 00:44:48,879 Speaker 1: differently this time. Instead of having five thousand acres where 777 00:44:48,880 --> 00:44:50,920 Speaker 1: we just have a park, we're gonna buy a hundred 778 00:44:50,960 --> 00:44:54,000 Speaker 1: thousand acres and and we're gonna have the hotels, we're 779 00:44:54,000 --> 00:44:55,880 Speaker 1: gonna have all the other services. We're going to get 780 00:44:55,920 --> 00:44:58,400 Speaker 1: the money from that. So I was investing in Disney 781 00:44:58,600 --> 00:45:03,239 Speaker 1: in the nineteen seventies when they were building Disneyland. I 782 00:45:03,400 --> 00:45:07,080 Speaker 1: was in Disney World. I was investing in McDonald's at 783 00:45:07,120 --> 00:45:11,520 Speaker 1: a time. When I would I would go my girlfriend 784 00:45:11,640 --> 00:45:14,000 Speaker 1: at the time was in Washington, and when I would 785 00:45:14,000 --> 00:45:16,600 Speaker 1: go down to Washington, I would go. Every weekend she 786 00:45:16,640 --> 00:45:18,160 Speaker 1: would come to New York. I would go to Washington 787 00:45:18,719 --> 00:45:21,920 Speaker 1: and and uh, it was big Max. Would I couldn't 788 00:45:21,920 --> 00:45:23,400 Speaker 1: wait to go at a big Max. And they were 789 00:45:23,480 --> 00:45:26,360 Speaker 1: like less than a dollar seventy five eight cents, I 790 00:45:26,400 --> 00:45:29,120 Speaker 1: don't know, And I felt it With the McDonald's, the 791 00:45:29,160 --> 00:45:32,840 Speaker 1: big opportunity was that they were they owned the land 792 00:45:33,400 --> 00:45:38,000 Speaker 1: that was underneath of the franchise's properties, and the Coca 793 00:45:38,080 --> 00:45:42,840 Speaker 1: Cola's were then uh and cents where coke maybe fries 794 00:45:42,880 --> 00:45:46,320 Speaker 1: were ten cents, maybe the Hamburgers were twenty or twenty 795 00:45:46,360 --> 00:45:49,720 Speaker 1: five cents. And said, oh my god, the profit margin 796 00:45:49,840 --> 00:45:52,560 Speaker 1: that they're on the verge of making. They could raise 797 00:45:52,640 --> 00:45:55,279 Speaker 1: the price from ten to fifteen cents and then all 798 00:45:55,280 --> 00:45:57,200 Speaker 1: of a sudden, the extra five cents is all profits. 799 00:45:57,880 --> 00:46:01,000 Speaker 1: Or they could raise the fry from ten cents to 800 00:46:01,040 --> 00:46:04,279 Speaker 1: twelve cents, or apple pie that they had from from 801 00:46:04,320 --> 00:46:06,400 Speaker 1: fifteen cents to twenty cents. So they thought there was 802 00:46:06,400 --> 00:46:09,600 Speaker 1: a tremendous amount of leverage in the pricing that they had. 803 00:46:09,680 --> 00:46:13,640 Speaker 1: And plus they had UH this land and underneath the 804 00:46:13,680 --> 00:46:17,080 Speaker 1: ball of the hotel. So there's something about the business 805 00:46:17,800 --> 00:46:20,839 Speaker 1: that felt Vail was the best mountain I had ever 806 00:46:20,960 --> 00:46:24,000 Speaker 1: seen ski I love skiing. It was the best mountain. 807 00:46:24,080 --> 00:46:27,040 Speaker 1: Other people would have six hundred acres, asked them with 808 00:46:27,040 --> 00:46:31,080 Speaker 1: six hundred acres. They always fourteen thousand acres, And you know, 809 00:46:31,320 --> 00:46:34,640 Speaker 1: and there was and the big opportunity in Bail was 810 00:46:34,719 --> 00:46:38,120 Speaker 1: that when we invested in it in nineteen seventy six, 811 00:46:38,160 --> 00:46:41,040 Speaker 1: it was sixteen or seventeen dollars to share. And then 812 00:46:41,200 --> 00:46:45,160 Speaker 1: Leon So what happened in Vail is that it was 813 00:46:45,239 --> 00:46:49,160 Speaker 1: controlled by a man named George Gillette bar against the 814 00:46:49,239 --> 00:46:53,759 Speaker 1: property and then built the radio station in uh Tallahassee 815 00:46:53,800 --> 00:46:56,920 Speaker 1: I guess it was or somewhere in Florida, and borrowed 816 00:46:56,920 --> 00:46:59,600 Speaker 1: two fifty million dollars in bankrupt Leon black bot the 817 00:46:59,680 --> 00:47:03,120 Speaker 1: dead and turned into the equity UH and then brought 818 00:47:03,160 --> 00:47:05,000 Speaker 1: the company public so you could pay back some of 819 00:47:05,040 --> 00:47:07,799 Speaker 1: the money that he borrowed to buy the to buy 820 00:47:07,880 --> 00:47:11,279 Speaker 1: this and the stock of sixteen or seventeen dollars and 821 00:47:11,360 --> 00:47:16,880 Speaker 1: then Uh, my idea since well ever since yes and bo. 822 00:47:17,239 --> 00:47:19,800 Speaker 1: And what I did was that when he distributed his 823 00:47:19,880 --> 00:47:23,360 Speaker 1: stock at thirty dollars to share in in two thousand 824 00:47:23,520 --> 00:47:27,200 Speaker 1: six to all of his partners, I knew a lot 825 00:47:27,280 --> 00:47:29,560 Speaker 1: of his partners. In fact, one of his partners is 826 00:47:29,600 --> 00:47:32,000 Speaker 1: one of my friends. His name is Billy Mack Matt 827 00:47:32,080 --> 00:47:34,719 Speaker 1: Callie real Estate. In fact, I was just talking to 828 00:47:34,840 --> 00:47:38,040 Speaker 1: him the other day. Uh. We were playing golf in Florida, 829 00:47:38,480 --> 00:47:41,520 Speaker 1: and he said, you know, I only know a few stocks. 830 00:47:41,560 --> 00:47:46,120 Speaker 1: I know you're Tesla told me about I know a ridium. 831 00:47:46,520 --> 00:47:48,200 Speaker 1: I bought a ridium when you told me to buy 832 00:47:48,280 --> 00:47:50,680 Speaker 1: a ridium of seven dollars to share it now forty seven? 833 00:47:51,320 --> 00:47:54,319 Speaker 1: Uh and uh and then veil Uh. I was an 834 00:47:54,680 --> 00:47:58,520 Speaker 1: investor with Leon and then when he sold his distribute 835 00:47:58,520 --> 00:48:01,520 Speaker 1: all the stock at thirty dollars our twenty eight dollars, 836 00:48:02,200 --> 00:48:04,240 Speaker 1: I came to you because you were buying the stock, 837 00:48:04,360 --> 00:48:07,320 Speaker 1: and I said, what should I do? And you told 838 00:48:07,360 --> 00:48:09,680 Speaker 1: me I told him, as a billy, what you should 839 00:48:09,719 --> 00:48:11,680 Speaker 1: do is you should buy all the stock you can 840 00:48:11,760 --> 00:48:14,120 Speaker 1: buy at this price. But if you want to sell 841 00:48:14,160 --> 00:48:16,120 Speaker 1: your stock, I want to buy your stock. And so 842 00:48:16,280 --> 00:48:19,879 Speaker 1: all those guys who I knew from from from from 843 00:48:20,360 --> 00:48:23,120 Speaker 1: Leon Blacks, from Apollo. We're selling the stock. I bought 844 00:48:23,120 --> 00:48:25,160 Speaker 1: it all, and so we bought ten or twelve percent 845 00:48:25,239 --> 00:48:27,680 Speaker 1: of the company around thirty dollars a share is now 846 00:48:27,840 --> 00:48:30,520 Speaker 1: to seven or two eighty something like that. But the 847 00:48:30,600 --> 00:48:33,120 Speaker 1: big idea was that it was the best place you 848 00:48:33,160 --> 00:48:35,320 Speaker 1: could see, and there had been nothing done in the 849 00:48:35,440 --> 00:48:37,879 Speaker 1: town to re gentrify it. And that was a town 850 00:48:37,920 --> 00:48:40,920 Speaker 1: built in the nine eighties, about nineteen eighty, and it 851 00:48:40,920 --> 00:48:43,800 Speaker 1: would really decrepit, and the places would be junkie, and 852 00:48:43,920 --> 00:48:45,920 Speaker 1: you would stay there and you pay five hundred or 853 00:48:46,000 --> 00:48:48,279 Speaker 1: thousand dollars a night, and then you go skiing on 854 00:48:48,320 --> 00:48:50,560 Speaker 1: a mount for forty five dollars. And I said, if 855 00:48:50,640 --> 00:48:54,839 Speaker 1: you made this town better, buy, sell, build, and then sell, 856 00:48:54,920 --> 00:48:57,680 Speaker 1: build and sell, build and sell. Uh, then what would 857 00:48:57,719 --> 00:48:59,840 Speaker 1: happen is that the town would be so great and 858 00:49:00,160 --> 00:49:02,279 Speaker 1: everyone would come there and we would be happy to 859 00:49:02,400 --> 00:49:05,279 Speaker 1: spend anything he charged to stay in the town, even 860 00:49:05,360 --> 00:49:07,200 Speaker 1: if he didn't own it. But we make all the 861 00:49:07,280 --> 00:49:09,359 Speaker 1: money on this on the mountain. Instead of forty five 862 00:49:09,400 --> 00:49:11,399 Speaker 1: dollars a day, he could a hundred dollars a day, 863 00:49:12,000 --> 00:49:14,680 Speaker 1: and so he Uh. He thought that was too risky, 864 00:49:14,840 --> 00:49:17,319 Speaker 1: but he guesked me make a presentation to the board. 865 00:49:17,360 --> 00:49:19,560 Speaker 1: I said, I'm not an active investor. I'm not trying 866 00:49:19,640 --> 00:49:21,120 Speaker 1: to make me do things that this is the way 867 00:49:21,640 --> 00:49:23,440 Speaker 1: that Ron too in risk I'm just want to fix 868 00:49:23,480 --> 00:49:26,120 Speaker 1: it up and sell it. And and and he did 869 00:49:26,440 --> 00:49:30,120 Speaker 1: and uh and then uh and all the people got 870 00:49:30,160 --> 00:49:32,120 Speaker 1: through stock. And then what happened is that the new 871 00:49:32,200 --> 00:49:35,960 Speaker 1: person comes in, Rob Cats Rob. I got so lucky 872 00:49:36,040 --> 00:49:39,239 Speaker 1: with him, and Rob all the ideas that I had 873 00:49:39,480 --> 00:49:43,080 Speaker 1: about building and selling building he took off and he did. 874 00:49:43,560 --> 00:49:45,800 Speaker 1: And in addition to that, he took a ski task. 875 00:49:45,840 --> 00:49:48,080 Speaker 1: And now he sells more than half of the tickets 876 00:49:48,120 --> 00:49:50,560 Speaker 1: in advance before the season even starts, before we know 877 00:49:50,719 --> 00:49:53,120 Speaker 1: it's in the snow. And as a results of that, 878 00:49:53,719 --> 00:49:57,080 Speaker 1: we have half the ski pass and sold an import 879 00:49:57,120 --> 00:49:59,520 Speaker 1: of a networking mountains that he can sell, for example 880 00:49:59,560 --> 00:50:02,360 Speaker 1: in the north East. Now we can sell people go 881 00:50:02,560 --> 00:50:05,239 Speaker 1: skiing in Bail from the Northeast. They couldn't get there 882 00:50:05,280 --> 00:50:08,000 Speaker 1: before and now they can buy the tickets. Uh there, 883 00:50:08,400 --> 00:50:10,719 Speaker 1: and so we have all this money in until and 884 00:50:11,080 --> 00:50:13,800 Speaker 1: and then what what happens is that instead of charging 885 00:50:14,120 --> 00:50:16,600 Speaker 1: my hundred dollars that wanted to charge. He now charges 886 00:50:16,640 --> 00:50:20,200 Speaker 1: two hundreds to ski in the mountain. And uh, and 887 00:50:20,239 --> 00:50:23,040 Speaker 1: then he has his whole network that he's a speeder 888 00:50:23,280 --> 00:50:26,280 Speaker 1: for the skip geest a ticket but the best mountain, 889 00:50:26,600 --> 00:50:29,840 Speaker 1: and he's got the best distribution system and uh and 890 00:50:30,000 --> 00:50:33,680 Speaker 1: and uh and it's a great brand and these a 891 00:50:33,719 --> 00:50:38,040 Speaker 1: spectacular So Ron, I get the sense that your experience 892 00:50:38,680 --> 00:50:43,040 Speaker 1: as a stockbroker buying and selling those companies that kept 893 00:50:43,120 --> 00:50:46,520 Speaker 1: going up even after you sold it very much impacted 894 00:50:46,640 --> 00:50:52,320 Speaker 1: how you behave as a mutual fund manager. You learned 895 00:50:52,760 --> 00:50:55,400 Speaker 1: you had such a terrible experience selling winners in the 896 00:50:55,520 --> 00:50:59,400 Speaker 1: seventies that in the eighties and nineties you decided, I 897 00:50:59,719 --> 00:51:02,560 Speaker 1: just can't get rid of these really good companies with 898 00:51:02,840 --> 00:51:07,400 Speaker 1: great growth prospects. Yes, that's it, that's the whole idea. 899 00:51:07,760 --> 00:51:11,720 Speaker 1: And if they have competitive advantage. So so the big picture, 900 00:51:12,360 --> 00:51:16,360 Speaker 1: the big picture I have is that my parents, so 901 00:51:16,480 --> 00:51:19,800 Speaker 1: when we bought when I was five years old, and 902 00:51:20,239 --> 00:51:25,120 Speaker 1: so I'm born in and we live in a we 903 00:51:25,239 --> 00:51:28,960 Speaker 1: live for that was during the war and we're living 904 00:51:29,360 --> 00:51:32,279 Speaker 1: in my my parents and I of course I didn't 905 00:51:32,280 --> 00:51:34,319 Speaker 1: know what I was doing. I'm a year old living 906 00:51:34,440 --> 00:51:38,440 Speaker 1: in Red Bank, New Jersey, in three rooms owned by 907 00:51:39,040 --> 00:51:43,400 Speaker 1: a racist, uh who is a Helen racist or husband's 908 00:51:43,440 --> 00:51:45,560 Speaker 1: fighting in the war and my dad's working for the 909 00:51:45,719 --> 00:51:49,880 Speaker 1: army and we're living in these three rooms. In we 910 00:51:50,000 --> 00:51:52,200 Speaker 1: go live in Bradley Beach, which is just out of 911 00:51:52,239 --> 00:51:57,640 Speaker 1: Astbury Park, and we live in a garage apartment. Detached 912 00:51:57,719 --> 00:52:03,000 Speaker 1: garage apartment. Where are they It's so small that they 913 00:52:03,040 --> 00:52:05,640 Speaker 1: have to have the refrigerator as the fit. They kitchen's 914 00:52:05,719 --> 00:52:08,719 Speaker 1: outside on the porch. Uh. And so we lived there 915 00:52:08,800 --> 00:52:12,520 Speaker 1: until forty eight. My parents by their first house for 916 00:52:12,640 --> 00:52:16,279 Speaker 1: five thousand dollars in Wana Massa, also outside of Astbury Park, 917 00:52:16,400 --> 00:52:21,400 Speaker 1: five thousand dollars. Then in nineteen they sell it for 918 00:52:21,480 --> 00:52:24,480 Speaker 1: ten thousand dollars to build a twenty thousand dollar house 919 00:52:24,560 --> 00:52:27,160 Speaker 1: in west down Hurst, also outside of Astbury Park. So 920 00:52:27,520 --> 00:52:30,880 Speaker 1: to those houses, for example, I went back three or 921 00:52:30,920 --> 00:52:34,279 Speaker 1: four or five years ago to see to see those 922 00:52:34,320 --> 00:52:38,360 Speaker 1: houses eleven twenty two Grassmarer Avenue, five forty two Deal Parkway, 923 00:52:38,840 --> 00:52:41,920 Speaker 1: UH and I go look at those houses and the 924 00:52:42,000 --> 00:52:45,239 Speaker 1: house on on in Wana Massa that's the one they 925 00:52:45,280 --> 00:52:48,200 Speaker 1: sold for ten thousand. It was every single house on 926 00:52:48,280 --> 00:52:51,160 Speaker 1: the street was the same they're coming back after World 927 00:52:51,200 --> 00:52:53,480 Speaker 1: War Two. They're all the same. They were like one 928 00:52:53,640 --> 00:52:55,800 Speaker 1: was yellow and one was brown, and one had a 929 00:52:55,840 --> 00:52:58,359 Speaker 1: little brick front and one had a car port. They're 930 00:52:58,360 --> 00:53:00,799 Speaker 1: all the same. In my house with a second from 931 00:53:00,840 --> 00:53:02,799 Speaker 1: the corner. It was the nicest house in the block. 932 00:53:02,840 --> 00:53:05,359 Speaker 1: I was still proud. They had a little a little 933 00:53:05,440 --> 00:53:08,479 Speaker 1: fence around the front yard maybe the quarter acre house. 934 00:53:08,920 --> 00:53:11,359 Speaker 1: And they had put a dormer on the route. Uh 935 00:53:11,520 --> 00:53:14,000 Speaker 1: so therefore then extra rooms. I'm standing there looking at 936 00:53:14,040 --> 00:53:17,720 Speaker 1: this house taking pictures of it, and a big giant 937 00:53:17,760 --> 00:53:20,239 Speaker 1: guy comes to the door. Don't wanted to shoot me 938 00:53:20,360 --> 00:53:22,319 Speaker 1: or something, thinking that, you know, who is this guy? 939 00:53:23,000 --> 00:53:25,040 Speaker 1: I go up to him and I said, you know, 940 00:53:25,160 --> 00:53:28,120 Speaker 1: I I'm Ron Barron and this was I was the 941 00:53:28,160 --> 00:53:30,839 Speaker 1: one who lived in this house for the just when 942 00:53:30,880 --> 00:53:32,799 Speaker 1: it was built, a brand new house. And he said 943 00:53:32,800 --> 00:53:35,400 Speaker 1: I know your name actually, and I said wow, and 944 00:53:35,600 --> 00:53:37,560 Speaker 1: and it turned me turned out that this guy is 945 00:53:37,640 --> 00:53:42,080 Speaker 1: the construction guy and his wife is a is a nurse. Uh. 946 00:53:42,360 --> 00:53:46,160 Speaker 1: And he said it works at night and uh. He says, 947 00:53:46,160 --> 00:53:47,640 Speaker 1: come on. And I couldn't come in because they had 948 00:53:47,680 --> 00:53:50,640 Speaker 1: dogs and I were afraid of dogs. But I said, 949 00:53:50,680 --> 00:53:54,160 Speaker 1: what's this house worth he says, three thou dollars. I said, wow, 950 00:53:54,520 --> 00:53:56,759 Speaker 1: my parents wore made a bad sale. And then I 951 00:53:56,840 --> 00:54:00,040 Speaker 1: go to the other house that the gil Parkway in 952 00:54:00,200 --> 00:54:02,319 Speaker 1: West down Earth, the same thing that was the one 953 00:54:02,360 --> 00:54:04,920 Speaker 1: they built for twenty and they sold ultimately for a 954 00:54:05,040 --> 00:54:08,640 Speaker 1: hundred when my dad retired. That's also worth three hundred, 955 00:54:08,719 --> 00:54:12,880 Speaker 1: three hundred, fifty four thous and and so so I 956 00:54:13,040 --> 00:54:17,080 Speaker 1: think about it in terms of inflation. And when when 957 00:54:17,600 --> 00:54:20,360 Speaker 1: I was young, and I thought, a hundred thousand dollars 958 00:54:20,800 --> 00:54:23,239 Speaker 1: for the guy who lived on the corner and drove 959 00:54:23,280 --> 00:54:26,320 Speaker 1: a Cadillac and we had an old Ford. Uh. And 960 00:54:26,560 --> 00:54:29,320 Speaker 1: he had a house on the on the lake, and 961 00:54:29,400 --> 00:54:30,759 Speaker 1: we had a house in the middle of the block. 962 00:54:30,880 --> 00:54:33,279 Speaker 1: In a quarter of April or something like that, I said, 963 00:54:33,640 --> 00:54:36,680 Speaker 1: and and and uh. And he owned rides on the 964 00:54:36,760 --> 00:54:40,640 Speaker 1: boardwalk and a real estate guy. And I said, boy, 965 00:54:40,640 --> 00:54:43,440 Speaker 1: I want to be successful like that. But but again, 966 00:54:43,480 --> 00:54:45,759 Speaker 1: a hundred thousand dollars that was a hold the money 967 00:54:45,760 --> 00:54:48,399 Speaker 1: in the world. And and they had a fifty thou 968 00:54:48,600 --> 00:54:51,960 Speaker 1: dollar house, And so I said, how do you have that? 969 00:54:52,160 --> 00:55:00,680 Speaker 1: And and so the concept of inflation, concept of what 970 00:55:00,960 --> 00:55:03,400 Speaker 1: things cost. When I was in when I graduated college 971 00:55:03,440 --> 00:55:07,800 Speaker 1: in nineteen sixty five. My last year in college was 972 00:55:09,080 --> 00:55:12,000 Speaker 1: you know, my everything was thirty five dollars. When my 973 00:55:12,040 --> 00:55:14,880 Speaker 1: first year was twos, my kids was fifty or sixty 974 00:55:15,120 --> 00:55:19,160 Speaker 1: seventy thousand dollars. When my grandchildren are going to the 975 00:55:19,239 --> 00:55:22,279 Speaker 1: school right now, Uh, there are six and eight years old, 976 00:55:22,360 --> 00:55:25,040 Speaker 1: and I think their school must be fifty thousand dollars 977 00:55:25,040 --> 00:55:26,960 Speaker 1: a year, sixty thousand dollars year, and they've got the 978 00:55:26,960 --> 00:55:30,239 Speaker 1: school anymore, that's a virtual. So whether it's a car 979 00:55:30,840 --> 00:55:33,239 Speaker 1: when I when when I bought a two forty z 980 00:55:34,080 --> 00:55:37,840 Speaker 1: uh for when I came to New York, uh for 981 00:55:37,960 --> 00:55:41,880 Speaker 1: two thousand dollars or twenty dollars, And now they're I 982 00:55:41,920 --> 00:55:44,359 Speaker 1: don't know it, twenty or thirty thousand dollars for these cars. 983 00:55:44,960 --> 00:55:50,319 Speaker 1: So so yeah, and and my salary of seventy nine 984 00:55:50,320 --> 00:55:54,160 Speaker 1: when it's a patent examiner, those are now sixty thousand dollars, 985 00:55:54,239 --> 00:55:57,440 Speaker 1: seventy thousand dollars. So my big picture is that the 986 00:55:57,600 --> 00:56:02,200 Speaker 1: value of your money bowls and every seventeen years. So 987 00:56:02,320 --> 00:56:05,560 Speaker 1: if you have a hundred thousand dollars today, in seventeen years, 988 00:56:05,600 --> 00:56:08,480 Speaker 1: you have fifty thousand dollars of buying power in seventeen 989 00:56:08,520 --> 00:56:12,360 Speaker 1: more years, seventeen more years of the twelve. So basically 990 00:56:12,480 --> 00:56:16,120 Speaker 1: I think that the stock market, uh is the hedge 991 00:56:16,560 --> 00:56:21,160 Speaker 1: against against the devaluation of your currency. So the stock 992 00:56:21,239 --> 00:56:25,120 Speaker 1: market basically doubles every ten or twelve years. So historically 993 00:56:25,560 --> 00:56:28,680 Speaker 1: it's about ten percent a year including dividends, so it's 994 00:56:28,680 --> 00:56:30,840 Speaker 1: two or three and that's because it keeps up with 995 00:56:30,880 --> 00:56:32,960 Speaker 1: the economy. Two or three percent reel or three or 996 00:56:33,000 --> 00:56:36,000 Speaker 1: four percent inflation. People say it's now inflation. You go 997 00:56:36,160 --> 00:56:37,960 Speaker 1: try to hire someone for the same price that they 998 00:56:38,040 --> 00:56:41,080 Speaker 1: paid last year and you'll find out how much inflation is. Ron. 999 00:56:41,200 --> 00:56:43,240 Speaker 1: Let me, let me tell you a little bit about 1000 00:56:43,280 --> 00:56:46,680 Speaker 1: a bad sale you made. Those two forty z s 1001 00:56:46,840 --> 00:56:50,719 Speaker 1: that car you had, they become very collectible and nice 1002 00:56:50,880 --> 00:56:55,120 Speaker 1: versions of them today from the seventies. Nice versions go 1003 00:56:55,320 --> 00:57:00,719 Speaker 1: for thousand dollars. Wow, we know when when when I 1004 00:57:00,920 --> 00:57:03,880 Speaker 1: bought it? And when I bought it, this must be 1005 00:57:04,200 --> 00:57:13,920 Speaker 1: in nineteen nineteen seventy, nineteen seventy. Uh. Then what happened 1006 00:57:14,280 --> 00:57:20,920 Speaker 1: is that the list price was dollars and in order, 1007 00:57:21,000 --> 00:57:24,200 Speaker 1: but there was a waiting list had mispriced it. There's 1008 00:57:24,240 --> 00:57:26,320 Speaker 1: a waiting list on those cars, and you had to 1009 00:57:26,360 --> 00:57:29,240 Speaker 1: paid the deal or cash, you know, a bribe. You 1010 00:57:29,320 --> 00:57:31,320 Speaker 1: had to give him three or four or five hundred dollars. 1011 00:57:31,720 --> 00:57:36,000 Speaker 1: So basically it cost me three thousand dollars for this 1012 00:57:36,160 --> 00:57:38,720 Speaker 1: price car, so I can get it immediately. It put 1013 00:57:38,800 --> 00:57:42,520 Speaker 1: an orange car, and then uh and then two or 1014 00:57:42,560 --> 00:57:45,240 Speaker 1: three or four years later the price had gone up 1015 00:57:45,640 --> 00:57:47,960 Speaker 1: and I sold the car. I bought it for three 1016 00:57:48,040 --> 00:57:51,480 Speaker 1: thousands when it was listed for hundred, and after I 1017 00:57:51,600 --> 00:57:53,480 Speaker 1: owned it for three or four years, I sold her 1018 00:57:53,520 --> 00:57:56,400 Speaker 1: for thirty hundreds or thirty sold it for more than 1019 00:57:56,440 --> 00:57:58,840 Speaker 1: I paid for it, and I paid over list when 1020 00:57:58,840 --> 00:58:02,160 Speaker 1: I bought it originally, So it doesn't surprise me. I 1021 00:58:02,240 --> 00:58:07,320 Speaker 1: guess that. Yes, So what they do with those cars 1022 00:58:07,440 --> 00:58:10,760 Speaker 1: is they do a full frame off restoration. They take 1023 00:58:10,840 --> 00:58:13,400 Speaker 1: them apart down to the last nut and bolt, and 1024 00:58:13,440 --> 00:58:17,680 Speaker 1: then rebuild them the practically brand new forty year old cars. 1025 00:58:18,320 --> 00:58:21,640 Speaker 1: Ron you've mentioned Matt Calli earlier. I want to share 1026 00:58:21,680 --> 00:58:26,920 Speaker 1: a quote of yours about real estate that I found intriguing. Quote. 1027 00:58:27,400 --> 00:58:30,720 Speaker 1: We believe there is a strong case to allocate capital 1028 00:58:31,160 --> 00:58:35,480 Speaker 1: to real estate in the public markets in an actively 1029 00:58:35,760 --> 00:58:39,720 Speaker 1: managed strategy. So so let's discuss how you do that, 1030 00:58:39,880 --> 00:58:44,200 Speaker 1: how do you actively manage real estate investments in the 1031 00:58:44,280 --> 00:58:48,200 Speaker 1: public markets. So we have a utual fund. It is 1032 00:58:48,240 --> 00:58:51,320 Speaker 1: probably ten years old. I think it must be certainly 1033 00:58:51,320 --> 00:58:55,240 Speaker 1: in the top one percent of real estate utual funds. 1034 00:58:56,160 --> 00:58:59,920 Speaker 1: Instead of just investing in reads, uh, we invest income 1035 00:59:00,000 --> 00:59:02,560 Speaker 1: the needs that are sea corps. And it can be 1036 00:59:02,880 --> 00:59:06,480 Speaker 1: a hotel business like a high for example. Or it 1037 00:59:06,520 --> 00:59:11,200 Speaker 1: can be a a service business like co Star, which 1038 00:59:11,320 --> 00:59:15,479 Speaker 1: enables people to walk around and buy apartments. Our rent 1039 00:59:15,520 --> 00:59:19,200 Speaker 1: apartments when you walk by the building, and will show 1040 00:59:19,240 --> 00:59:21,880 Speaker 1: you instead of looking at the newspaper for the department, 1041 00:59:22,160 --> 00:59:25,000 Speaker 1: Um that might be for sale, you can actually walk 1042 00:59:25,080 --> 00:59:27,240 Speaker 1: by one and you can look at it on your 1043 00:59:27,320 --> 00:59:31,320 Speaker 1: iPad and you can see what that apartment, whether it's available, 1044 00:59:31,360 --> 00:59:33,800 Speaker 1: and how much the rent is and go in and 1045 00:59:34,320 --> 00:59:37,600 Speaker 1: u and rented and uh so. Or it could be 1046 00:59:37,640 --> 00:59:41,280 Speaker 1: a tracks where it's going out there and building uh 1047 00:59:41,440 --> 00:59:48,480 Speaker 1: you know decks over again with wood that's uh you know, 1048 00:59:48,600 --> 00:59:53,040 Speaker 1: composite and it's better than the traditional would last longer 1049 00:59:53,160 --> 00:59:58,600 Speaker 1: and uh and it looks more attractive. So it's not 1050 00:59:58,880 --> 01:00:01,880 Speaker 1: just investing in wreaths. Or it can be investing in 1051 01:00:02,000 --> 01:00:07,400 Speaker 1: a gaming company, uh, like a like a a Penn Gaming, 1052 01:00:08,280 --> 01:00:13,240 Speaker 1: which which has sold the real estate that it owns 1053 01:00:13,320 --> 01:00:16,400 Speaker 1: but operates the properties. Now you have a play in 1054 01:00:16,560 --> 01:00:20,320 Speaker 1: pen and I've investing with Peter Carlino in Penn Gaming 1055 01:00:20,920 --> 01:00:24,480 Speaker 1: since Three Mile Island right after you know, there was 1056 01:00:24,560 --> 01:00:27,040 Speaker 1: a I don't remember what year it was, but it 1057 01:00:27,040 --> 01:00:31,880 Speaker 1: was in nineteen seventies, I think somewhere where uh you know, 1058 01:00:32,000 --> 01:00:35,920 Speaker 1: there was a nuclear explosion at three Mile Island in 1059 01:00:36,120 --> 01:00:41,240 Speaker 1: Pennsylvania and in Harrisburg and went to visit him something. 1060 01:00:41,360 --> 01:00:43,959 Speaker 1: Sometime after that he was going public for the first time, 1061 01:00:44,520 --> 01:00:46,760 Speaker 1: and I think the market cap and his company was 1062 01:00:47,040 --> 01:00:49,640 Speaker 1: twenty five or thirty million dollars. He ultimately sold a 1063 01:00:49,680 --> 01:00:53,640 Speaker 1: company for seven billions. So so you find these people 1064 01:00:54,320 --> 01:00:59,400 Speaker 1: and uh that that you can trust and you think 1065 01:00:59,440 --> 01:01:02,360 Speaker 1: are really capable. You know, do I do I really what? 1066 01:01:02,480 --> 01:01:06,480 Speaker 1: I trust this person to manage money for my family. 1067 01:01:07,080 --> 01:01:10,360 Speaker 1: That is that's something I would feel comfortable choosing them 1068 01:01:10,920 --> 01:01:14,600 Speaker 1: to be someone who would be uh in charge of 1069 01:01:14,760 --> 01:01:17,480 Speaker 1: the assets that my family has. I wor wasn't here 1070 01:01:18,160 --> 01:01:20,240 Speaker 1: and so it's the same kind of idea. So what 1071 01:01:20,400 --> 01:01:25,040 Speaker 1: we're doing is like with Peter Carlino, there isn't anything 1072 01:01:25,360 --> 01:01:30,440 Speaker 1: this guy told me that he's ever not performed. And 1073 01:01:30,600 --> 01:01:34,800 Speaker 1: Stewart Fatum from Choice Hotels. Uh, there isn't anything I know. 1074 01:01:34,880 --> 01:01:37,720 Speaker 1: Stewart ptom a thousand times. When I was in the 1075 01:01:37,760 --> 01:01:43,160 Speaker 1: patent office in Washington, I borrowed, UH. Somehow I had 1076 01:01:43,200 --> 01:01:45,720 Speaker 1: to get two thousand dollars because a Manner of Care 1077 01:01:45,880 --> 01:01:49,760 Speaker 1: was going public in sixty nine. That was a company 1078 01:01:49,840 --> 01:01:52,120 Speaker 1: his father had started. And man of Care was a 1079 01:01:52,200 --> 01:01:55,320 Speaker 1: nursing home company, and I had read about NINETI they 1080 01:01:55,360 --> 01:01:59,000 Speaker 1: had the nursing homes and medicare that I kind of 1081 01:01:59,080 --> 01:02:02,920 Speaker 1: figured out somewhere, and and Washington Post wrote these stories 1082 01:02:03,000 --> 01:02:05,480 Speaker 1: best that I got invest in that company, and so 1083 01:02:05,560 --> 01:02:08,000 Speaker 1: I invested. I borrowed two thousand dollars to get a 1084 01:02:08,080 --> 01:02:12,720 Speaker 1: margin account and UH a thousand dollars in patting office 1085 01:02:12,720 --> 01:02:16,160 Speaker 1: credit union, three hundred hours from household finance, three hundreds 1086 01:02:16,240 --> 01:02:19,320 Speaker 1: from beneficial finance. Somehow I came up with another four 1087 01:02:19,360 --> 01:02:21,640 Speaker 1: hundred dollars. They have no idea how, but I had. 1088 01:02:22,120 --> 01:02:25,000 Speaker 1: I got the two thousand dollars to open up an 1089 01:02:25,040 --> 01:02:28,800 Speaker 1: account it I think the firm was called Reynolds UH company, 1090 01:02:29,360 --> 01:02:33,560 Speaker 1: and and invested in Manner Care and manner of Care 1091 01:02:34,280 --> 01:02:39,080 Speaker 1: uh was ultimately went up a thousand times from thousands 1092 01:02:39,120 --> 01:02:42,080 Speaker 1: of times, since the company had a book value of 1093 01:02:43,240 --> 01:02:45,720 Speaker 1: twelve million dollars when it went public, and it came 1094 01:02:45,800 --> 01:02:48,520 Speaker 1: public at twenty million dollars when first trade. You know, 1095 01:02:48,720 --> 01:02:51,400 Speaker 1: I p O twenty million dollars. That's the value of 1096 01:02:51,400 --> 01:02:54,960 Speaker 1: the whole company. It was. We became in the seventies, 1097 01:02:55,120 --> 01:02:58,360 Speaker 1: I was recommending the stock to my institutional clients. In 1098 01:02:58,400 --> 01:03:02,600 Speaker 1: the eighties, We'll be came the largest institutional shareholder of 1099 01:03:02,720 --> 01:03:06,280 Speaker 1: manner Care and it was sold ultimately for Carlisle roof 1100 01:03:06,360 --> 01:03:09,040 Speaker 1: for four and a half billion work point three four 1101 01:03:09,160 --> 01:03:12,080 Speaker 1: point four four from five something like that. And but 1102 01:03:12,200 --> 01:03:16,280 Speaker 1: before it was sold Choice Hotel. Now we got Choice 1103 01:03:16,320 --> 01:03:19,560 Speaker 1: Hotels is now a d stock and our cost is 1104 01:03:19,640 --> 01:03:24,440 Speaker 1: maybe originally three dollars. So and Stewart being him one 1105 01:03:24,480 --> 01:03:28,280 Speaker 1: of those people anything he said, there's good to be 1106 01:03:28,320 --> 01:03:30,400 Speaker 1: at J Prince who was one of those people. Anything 1107 01:03:30,440 --> 01:03:32,840 Speaker 1: they said. Prince who used to say to me run 1108 01:03:33,560 --> 01:03:36,200 Speaker 1: Now I would talk to about contracts and and he 1109 01:03:36,240 --> 01:03:40,320 Speaker 1: would say, ron a contract doesn't mean anything. If you 1110 01:03:40,440 --> 01:03:43,720 Speaker 1: have to have a contract to enforce an agreement, you're 1111 01:03:43,760 --> 01:03:46,800 Speaker 1: doing business with the wrong person, because that just because 1112 01:03:46,920 --> 01:03:50,320 Speaker 1: any good lawyer can break any single contract you have, 1113 01:03:50,640 --> 01:03:53,000 Speaker 1: So you have to look, you only have the contracts. 1114 01:03:53,120 --> 01:03:55,640 Speaker 1: You can keep track of what the deal was not 1115 01:03:55,720 --> 01:03:58,400 Speaker 1: so you can expect to enforce it. So, Ron, let's 1116 01:03:58,400 --> 01:04:01,360 Speaker 1: talk a little bit about one of your are bigger holdings. 1117 01:04:01,440 --> 01:04:06,640 Speaker 1: You've been a buyer of Tesla since the stock has 1118 01:04:06,720 --> 01:04:11,920 Speaker 1: just exploded last year it was up over six Is 1119 01:04:11,960 --> 01:04:14,360 Speaker 1: there any upside left here? Where do you think the 1120 01:04:14,400 --> 01:04:17,840 Speaker 1: stock goes from here? Well, we bought stock in Tesla. 1121 01:04:18,440 --> 01:04:22,440 Speaker 1: We spent three eighty five million dollars between two thousand 1122 01:04:22,480 --> 01:04:26,000 Speaker 1: and fourteen and two thousand and sixteen by eight million 1123 01:04:26,080 --> 01:04:32,440 Speaker 1: shares a million one shares, and uh, the average prices 1124 01:04:33,160 --> 01:04:35,960 Speaker 1: forty to share forty two dollars to share is now 1125 01:04:36,080 --> 01:04:40,640 Speaker 1: eight hund sixty and eight hund fifty, and so it's 1126 01:04:40,680 --> 01:04:43,120 Speaker 1: now a hearing fifty billion dollar market cap. Who is 1127 01:04:43,240 --> 01:04:47,040 Speaker 1: forty to forty five billion when we started. Uh, I 1128 01:04:47,200 --> 01:04:49,880 Speaker 1: think that in and I've been saying this for a while. 1129 01:04:50,400 --> 01:04:52,680 Speaker 1: When we bought it, I thought that we would make 1130 01:04:53,200 --> 01:04:56,400 Speaker 1: twenty times our money. We've been twenty times our money 1131 01:04:57,120 --> 01:05:01,480 Speaker 1: and so far, and I think that it's going to 1132 01:05:01,600 --> 01:05:05,479 Speaker 1: be a two trillion dollar company over the next ten years, 1133 01:05:05,600 --> 01:05:07,840 Speaker 1: eight or ten years. That's two thousand dollars a share. 1134 01:05:08,760 --> 01:05:12,800 Speaker 1: And uh, and can we get lucky? Yeah, I can 1135 01:05:12,880 --> 01:05:16,120 Speaker 1: get lucky. And and UH to phil Us, autonomous driving 1136 01:05:16,880 --> 01:05:18,560 Speaker 1: takes off the way I think it could be, that 1137 01:05:18,600 --> 01:05:22,080 Speaker 1: could be worth another five billion or trillion dollars. Uh. 1138 01:05:22,840 --> 01:05:26,320 Speaker 1: Ride sharing could be a really big deal. Uh. The 1139 01:05:27,200 --> 01:05:29,760 Speaker 1: solar roofs, that could be a nice business form the 1140 01:05:29,840 --> 01:05:34,400 Speaker 1: battery business. Now, when they build factories, the factories they 1141 01:05:34,440 --> 01:05:38,040 Speaker 1: build or for tund fifty thousand cars a year of 1142 01:05:38,080 --> 01:05:42,240 Speaker 1: production and a factory when they built them in California, 1143 01:05:43,000 --> 01:05:45,080 Speaker 1: when they built it in the first one in Fremont, 1144 01:05:45,160 --> 01:05:48,720 Speaker 1: that was about seventeen thousand dollars of capital spending a car. 1145 01:05:49,040 --> 01:05:53,280 Speaker 1: Now in China about four thousand dollars a car, and 1146 01:05:53,400 --> 01:05:56,320 Speaker 1: the factory in China is probably a two hundred fifty thousand. 1147 01:05:56,320 --> 01:05:58,200 Speaker 1: People thought it was gonna be a hundred fifty thousand 1148 01:05:58,320 --> 01:06:02,760 Speaker 1: car factory, and that was the opportunity people perceived. And 1149 01:06:03,160 --> 01:06:05,640 Speaker 1: but we thought that they do millions of pars a 1150 01:06:05,720 --> 01:06:08,280 Speaker 1: year in China and that one factory they built so 1151 01:06:08,440 --> 01:06:11,160 Speaker 1: far is a two hundred fifty thousand par factory a year, 1152 01:06:11,800 --> 01:06:15,320 Speaker 1: and which is now at the rate it's producing, and 1153 01:06:15,640 --> 01:06:17,720 Speaker 1: that's making somewhere around two and a half billion dollars 1154 01:06:17,720 --> 01:06:20,320 Speaker 1: a year. So they invested a billion as making two 1155 01:06:20,320 --> 01:06:22,120 Speaker 1: and a half day. And when you invested in McDonald's 1156 01:06:22,120 --> 01:06:24,560 Speaker 1: a long time ago, you can invest a million dollars 1157 01:06:24,640 --> 01:06:27,360 Speaker 1: as a franchise a and if you work, you know, 1158 01:06:27,720 --> 01:06:30,400 Speaker 1: crazy hours and you put on your apron and got 1159 01:06:30,480 --> 01:06:33,200 Speaker 1: old dirty, maybe you can make a quarter of million 1160 01:06:33,200 --> 01:06:35,600 Speaker 1: dollars a year from million dollar investment. These guys have 1161 01:06:35,680 --> 01:06:37,560 Speaker 1: a billion dollar investment to making two an a half 1162 01:06:37,680 --> 01:06:41,320 Speaker 1: day in a year. Uh. Pretty wild, Like when when 1163 01:06:41,360 --> 01:06:44,160 Speaker 1: he goes into China and uh, they spend two million 1164 01:06:44,200 --> 01:06:47,920 Speaker 1: dollars two billion dollars in the first hotel in Macau 1165 01:06:48,720 --> 01:06:50,840 Speaker 1: and uh, and they gave him they were so happy 1166 01:06:50,920 --> 01:06:53,600 Speaker 1: that he came. He gave him land that he sold 1167 01:06:53,640 --> 01:06:55,680 Speaker 1: for a billion dollars. He has a billion dollars net 1168 01:06:55,840 --> 01:06:58,320 Speaker 1: and he started making a hundred million dollars a month. 1169 01:06:58,600 --> 01:07:02,280 Speaker 1: But this is a testla they make a billion a 1170 01:07:02,360 --> 01:07:04,080 Speaker 1: billion dollar investments and they make two and a half 1171 01:07:04,120 --> 01:07:05,840 Speaker 1: billion a year. They're gonna do the same thing in Germany, 1172 01:07:05,880 --> 01:07:09,080 Speaker 1: the same thing in Texas. What about SpaceX which Elon 1173 01:07:09,200 --> 01:07:12,920 Speaker 1: Musk also wait one more thing, and and it tests 1174 01:07:13,400 --> 01:07:16,480 Speaker 1: the battery business, which I think the car business could 1175 01:07:16,480 --> 01:07:18,640 Speaker 1: be a six or seven hundred billion dollar business and 1176 01:07:18,720 --> 01:07:21,560 Speaker 1: revenues a year and making two hundred million dollars a 1177 01:07:21,720 --> 01:07:24,360 Speaker 1: year two hundred billion a year in ten years. So 1178 01:07:24,560 --> 01:07:26,480 Speaker 1: that's how you get to this two train dollar value. 1179 01:07:26,720 --> 01:07:29,040 Speaker 1: But that's not including the batteries. He thinks that the 1180 01:07:29,080 --> 01:07:31,880 Speaker 1: battery can be also a business as big as the 1181 01:07:31,920 --> 01:07:34,720 Speaker 1: car business. So think about that. So here he thinks 1182 01:07:34,760 --> 01:07:37,120 Speaker 1: he's gonna go from five thousand cars a year to 1183 01:07:37,560 --> 01:07:40,560 Speaker 1: twenty million cars a year, and he thinks his battery business, 1184 01:07:40,560 --> 01:07:42,480 Speaker 1: who is gonna be the biggest car business. So I'm 1185 01:07:42,520 --> 01:07:45,280 Speaker 1: talking about the two trillion dollars because of the cars. 1186 01:07:45,520 --> 01:07:48,040 Speaker 1: I'm not talking about it for the batteries as far 1187 01:07:48,080 --> 01:07:51,360 Speaker 1: as space X. But that is is that that's the 1188 01:07:51,480 --> 01:07:55,240 Speaker 1: business that But we're an investor. We own a little 1189 01:07:55,240 --> 01:07:58,000 Speaker 1: bit less than one percent. It's a private company, and 1190 01:07:58,200 --> 01:08:02,200 Speaker 1: the value on its forty billion maybe and that was 1191 01:08:02,240 --> 01:08:05,080 Speaker 1: where we started with Tesla. I think that SpaceX is 1192 01:08:05,120 --> 01:08:07,360 Speaker 1: on the way to two trillion dollars also, so I 1193 01:08:07,440 --> 01:08:09,400 Speaker 1: think that in TESTA, we're gonna make a triple in 1194 01:08:09,520 --> 01:08:12,360 Speaker 1: ten years. I think that in space X we're gonna 1195 01:08:12,360 --> 01:08:15,680 Speaker 1: make thirty to fifty times in ten years. Uh. And 1196 01:08:15,840 --> 01:08:18,920 Speaker 1: one of the big reasons for that is that in 1197 01:08:19,040 --> 01:08:22,759 Speaker 1: the nineteen sixties when we started, you know, when President 1198 01:08:22,840 --> 01:08:25,680 Speaker 1: Kennedy's they were going through the moon. Uh and uh 1199 01:08:25,920 --> 01:08:28,840 Speaker 1: the rockets that he used there were disposable hundred million 1200 01:08:28,880 --> 01:08:31,120 Speaker 1: dollars rockets to the million dollar rockets they used one 1201 01:08:31,160 --> 01:08:32,960 Speaker 1: time and then it burns up. I was when I 1202 01:08:33,040 --> 01:08:34,640 Speaker 1: was working in the patent office, by the way, just 1203 01:08:34,760 --> 01:08:37,760 Speaker 1: as a little side here, when one of the things 1204 01:08:37,840 --> 01:08:40,200 Speaker 1: I did was I gave the patents on the nose 1205 01:08:40,439 --> 01:08:43,240 Speaker 1: on the coatings that were used on the capsules that 1206 01:08:43,320 --> 01:08:46,000 Speaker 1: returned to Earth, so all those capsules to make them 1207 01:08:46,040 --> 01:08:48,040 Speaker 1: not burn up. I was the one who gave the 1208 01:08:48,080 --> 01:08:53,240 Speaker 1: patents on that stuff. It's amazing. Uh. So yeah, full sir, 1209 01:08:53,880 --> 01:08:57,360 Speaker 1: and and so with h with with SpaceX, the competitive 1210 01:08:57,360 --> 01:09:00,680 Speaker 1: advantage that they have, the competitive advantage that test has 1211 01:09:00,800 --> 01:09:04,360 Speaker 1: this battery stuff. A competitive advantage of space X had 1212 01:09:04,880 --> 01:09:07,040 Speaker 1: is that they use the rockets over and over again. 1213 01:09:07,520 --> 01:09:10,880 Speaker 1: So the fuel to get into outer space is maybe 1214 01:09:11,400 --> 01:09:15,880 Speaker 1: an orbit maybe five thousand dollars a million dollars. Uh, 1215 01:09:16,040 --> 01:09:18,360 Speaker 1: And the rockets are a hundred two or a million dollars. 1216 01:09:18,760 --> 01:09:21,360 Speaker 1: They're throwing away a hundred two or million dollars instead 1217 01:09:21,400 --> 01:09:24,040 Speaker 1: of just spending the rock in the fuel over and 1218 01:09:24,120 --> 01:09:26,920 Speaker 1: over again. So now Tesla, the invention that they have 1219 01:09:27,720 --> 01:09:30,320 Speaker 1: is that they use the rockets over and over and 1220 01:09:30,439 --> 01:09:34,080 Speaker 1: over again. And so everyone said, man, you can't do that, 1221 01:09:34,400 --> 01:09:38,400 Speaker 1: you know, you know, landing a rocket on a platform 1222 01:09:38,560 --> 01:09:41,559 Speaker 1: in the ocean that's moving, they could use it again 1223 01:09:41,600 --> 01:09:44,479 Speaker 1: and again. That's insane. Nobody could do. That's like dropping 1224 01:09:44,520 --> 01:09:46,840 Speaker 1: a pencil from your from your hand, landing on the 1225 01:09:46,960 --> 01:09:50,720 Speaker 1: racer and standing up doesn't work. He did it. And 1226 01:09:50,840 --> 01:09:53,320 Speaker 1: so it's so if someone else is going to do 1227 01:09:53,360 --> 01:09:59,120 Speaker 1: with China. When they were successful at this landing these rockets, 1228 01:09:59,360 --> 01:10:01,400 Speaker 1: China had an a toorial in the Wall Street Journal 1229 01:10:01,920 --> 01:10:07,880 Speaker 1: and they said, congratulations Elon Musk, But boy, are are 1230 01:10:08,160 --> 01:10:12,960 Speaker 1: brilliant Chinese engineers. You're really missing out. You're getting beaten 1231 01:10:13,439 --> 01:10:16,280 Speaker 1: not by a country, you're getting beaten by a guy. 1232 01:10:16,800 --> 01:10:18,519 Speaker 1: But no matter with you, you've got to catch up. 1233 01:10:18,560 --> 01:10:21,840 Speaker 1: And they and they think and the China, uh, you know, 1234 01:10:22,240 --> 01:10:25,080 Speaker 1: editorial and the Wall Street Journal was we think we 1235 01:10:25,200 --> 01:10:27,360 Speaker 1: are I don't remember if it's five years behind or 1236 01:10:27,439 --> 01:10:31,240 Speaker 1: ten years behind, but way behind Elon Musk behind the 1237 01:10:31,280 --> 01:10:35,240 Speaker 1: unit based behind Elon Musk. Um. So. So the idea 1238 01:10:35,280 --> 01:10:38,560 Speaker 1: here is that there's three there's seven billion people on 1239 01:10:38,680 --> 01:10:42,040 Speaker 1: Earth or seven half billion, and uh, and half of 1240 01:10:42,120 --> 01:10:44,400 Speaker 1: them don't have internet. If you happen to live in 1241 01:10:44,479 --> 01:10:48,320 Speaker 1: East Hampton or Vale or or even Palm Beach. Uh, 1242 01:10:48,439 --> 01:10:53,200 Speaker 1: there's uh, there's not good reception for internet. And so 1243 01:10:53,400 --> 01:10:57,519 Speaker 1: the big opportunity and the relatively short term is that 1244 01:10:57,720 --> 01:11:03,320 Speaker 1: they can get they can have very low cost of launch. 1245 01:11:03,400 --> 01:11:07,560 Speaker 1: So Elon Musk, company, Google and seven we are a 1246 01:11:07,640 --> 01:11:11,240 Speaker 1: little bit less than one. And I think that this 1247 01:11:11,520 --> 01:11:17,240 Speaker 1: uh internet to the broadband, from satellite to your home, 1248 01:11:17,600 --> 01:11:21,599 Speaker 1: you're going to be an unbelievable business. Unbelievable and uh 1249 01:11:22,000 --> 01:11:25,840 Speaker 1: because there's so many people that needed. So so this 1250 01:11:26,040 --> 01:11:28,439 Speaker 1: is like the utility, this is like water, and this 1251 01:11:28,640 --> 01:11:32,280 Speaker 1: is like electricity. You've got to have broadband and if 1252 01:11:32,320 --> 01:11:35,000 Speaker 1: you want to if you want to cut that down 1253 01:11:35,680 --> 01:11:38,800 Speaker 1: on the inequality, this president of the world, you've got 1254 01:11:38,880 --> 01:11:40,920 Speaker 1: to have people educated the way you're getting educated as 1255 01:11:40,920 --> 01:11:45,320 Speaker 1: a broadband do you own any other non public companies 1256 01:11:45,439 --> 01:11:48,800 Speaker 1: or is this is SpaceX the only private firm your 1257 01:11:49,400 --> 01:11:55,320 Speaker 1: Barren Funds investment. We own Rivan, which is another UH 1258 01:11:55,920 --> 01:11:59,439 Speaker 1: electric car company, a small position than that, and that's 1259 01:11:59,479 --> 01:12:03,360 Speaker 1: on twenty present by Amazon and UH we have a 1260 01:12:03,439 --> 01:12:07,680 Speaker 1: small position in that. We're just investing right now in 1261 01:12:07,840 --> 01:12:11,720 Speaker 1: Cruise that's another private company that's going to do a 1262 01:12:11,880 --> 01:12:16,000 Speaker 1: car service UH or the autonomous driving in UH in 1263 01:12:16,120 --> 01:12:20,120 Speaker 1: San Francisco and UH very shortly that's about to start. 1264 01:12:20,560 --> 01:12:23,600 Speaker 1: We're investors in that. And then we're investors in a 1265 01:12:23,680 --> 01:12:27,719 Speaker 1: couple of small investments that were investor in a battery company. 1266 01:12:28,439 --> 01:12:31,880 Speaker 1: The Goldman Sacks also a very small investment. Baron Growth 1267 01:12:31,960 --> 01:12:36,840 Speaker 1: Fund has this investment. UH and UH. The big problem 1268 01:12:36,880 --> 01:12:39,320 Speaker 1: with the electric vehicles is where the batteries coming from. 1269 01:12:40,000 --> 01:12:45,120 Speaker 1: And and and this company Goldman Sacks sponsored in Volkswagen 1270 01:12:45,439 --> 01:12:50,439 Speaker 1: is the the big customer for making these batteries in 1271 01:12:50,880 --> 01:12:55,280 Speaker 1: in Europe and using hydropower Norway hydropower and then a 1272 01:12:55,360 --> 01:12:58,439 Speaker 1: farmer's network to allow farmers to get better seed and 1273 01:12:58,520 --> 01:13:01,640 Speaker 1: lower prices. We're investor in that. So we have a 1274 01:13:01,760 --> 01:13:04,240 Speaker 1: bunch of small investments, but we have in Bearing Growth 1275 01:13:04,280 --> 01:13:08,680 Speaker 1: fund for example, about a bunch of investments that we 1276 01:13:08,760 --> 01:13:12,240 Speaker 1: invested ten twenty million dollars that are worth two million, 1277 01:13:12,240 --> 01:13:16,640 Speaker 1: three hundred million dollars. It was I had sold a 1278 01:13:16,720 --> 01:13:20,160 Speaker 1: little bit of Tesla, and I wanted people to see 1279 01:13:20,960 --> 01:13:23,120 Speaker 1: what I'm doing you so they don't think that I've 1280 01:13:23,200 --> 01:13:25,280 Speaker 1: died and the only reason we still own test this 1281 01:13:25,400 --> 01:13:29,400 Speaker 1: because I'm dead. So so so, so I put a 1282 01:13:29,520 --> 01:13:33,040 Speaker 1: note up on our website. I said that what happened 1283 01:13:33,200 --> 01:13:37,800 Speaker 1: is that, uh, it became a very large percentage of 1284 01:13:37,920 --> 01:13:40,360 Speaker 1: a few funds that we managed, bearing Partner's Fund, bar 1285 01:13:40,439 --> 01:13:43,560 Speaker 1: and Focus Growth Fund, one off shore fund that we have, 1286 01:13:44,360 --> 01:13:47,439 Speaker 1: and so its results of that, I decided it would 1287 01:13:47,479 --> 01:13:52,759 Speaker 1: be a prudent for me as as a business owner, 1288 01:13:52,840 --> 01:13:55,639 Speaker 1: not just as an investorment a company to show people 1289 01:13:55,760 --> 01:13:59,519 Speaker 1: that actually we do take profits on occasion and uh 1290 01:13:59,680 --> 01:14:02,320 Speaker 1: you know when when when it's something not because there's 1291 01:14:02,360 --> 01:14:04,439 Speaker 1: something wrong with the business troup because I'm afraid about 1292 01:14:04,520 --> 01:14:07,719 Speaker 1: the volume of alatility in the stock, but rather because 1293 01:14:08,520 --> 01:14:11,240 Speaker 1: I want to show people that we're responsible. So out 1294 01:14:11,280 --> 01:14:14,720 Speaker 1: of the eight million shares, uh that that we have 1295 01:14:15,880 --> 01:14:20,240 Speaker 1: eight million one shares, we sold five thousand shares for 1296 01:14:20,520 --> 01:14:24,960 Speaker 1: our clients at at at four hundred and fifty and 1297 01:14:25,200 --> 01:14:31,360 Speaker 1: five thousand shairs remember of course, uh, five thousand shares 1298 01:14:31,720 --> 01:14:37,000 Speaker 1: at six fifty and two hift thousand shares at at 1299 01:14:37,040 --> 01:14:43,280 Speaker 1: eight d fifty, and so basically us it's painful every 1300 01:14:43,320 --> 01:14:48,840 Speaker 1: time I've sold it. But people just say, gee, how 1301 01:14:48,920 --> 01:14:51,360 Speaker 1: can you? Don't you ever sell? That's a matter with you. 1302 01:14:51,880 --> 01:14:55,400 Speaker 1: And and but for so, what I did in in 1303 01:14:55,560 --> 01:15:00,760 Speaker 1: Tesla is that I said that that now I will 1304 01:15:00,840 --> 01:15:03,240 Speaker 1: be I'm not buying stocks. I only invest in our 1305 01:15:03,280 --> 01:15:07,320 Speaker 1: mutual funds. And that was the commitment I made. And 1306 01:15:07,400 --> 01:15:11,840 Speaker 1: since with a couple of little, tiny exceptions, and the 1307 01:15:11,920 --> 01:15:14,920 Speaker 1: exceptions where when we wanted to have a large cap 1308 01:15:15,000 --> 01:15:18,680 Speaker 1: growth fund, I said, okay, this ten million dollars just 1309 01:15:19,840 --> 01:15:25,320 Speaker 1: without knowing anything about Berkshire Hathaway and Goldman Stacks and Cloudcom. 1310 01:15:25,400 --> 01:15:29,640 Speaker 1: You're not really doing research. I'll best tenny stocks and 1311 01:15:30,000 --> 01:15:32,840 Speaker 1: and see how they do, and I'll compare that that's 1312 01:15:32,920 --> 01:15:36,479 Speaker 1: my benchmark against our large cap growth. So we did that, 1313 01:15:36,760 --> 01:15:38,360 Speaker 1: and I did a couple of little things like that 1314 01:15:38,520 --> 01:15:41,439 Speaker 1: is what I did. And then uh, then when Testa 1315 01:15:41,520 --> 01:15:44,000 Speaker 1: comes along, I said, geez, this is gonna be this 1316 01:15:44,160 --> 01:15:47,519 Speaker 1: monster company, and uh. And what I want to do 1317 01:15:48,439 --> 01:15:50,479 Speaker 1: is I went to the board and I said, in 1318 01:15:50,560 --> 01:15:52,880 Speaker 1: two thousand and fourteen and two thousand and sixteen, I 1319 01:15:52,960 --> 01:15:55,360 Speaker 1: wrote all the stock I could buy for a couple 1320 01:15:55,439 --> 01:15:57,840 Speaker 1: of funds that I managed, and most of the mutual 1321 01:15:57,880 --> 01:16:02,200 Speaker 1: funds at Bearing Capital, which all are uh real estate 1322 01:16:02,600 --> 01:16:08,160 Speaker 1: or healthcare or fintech or emerging markets or small camp 1323 01:16:08,360 --> 01:16:11,280 Speaker 1: they can't own Tesla, and so I and a couple 1324 01:16:11,280 --> 01:16:14,080 Speaker 1: of guys that could own it. I tried to persuade him, 1325 01:16:14,080 --> 01:16:17,120 Speaker 1: and I wasn't successful. I said, I'm not used taking 1326 01:16:17,160 --> 01:16:20,559 Speaker 1: anyone's opportunity. If I invest in this, I'm not gonna 1327 01:16:20,600 --> 01:16:23,800 Speaker 1: do it personally, but I'd like to take fifty million 1328 01:16:23,840 --> 01:16:28,640 Speaker 1: dollars on behalf the Barren Capital and invest it in Tesla. Uh. 1329 01:16:28,800 --> 01:16:30,880 Speaker 1: And I think I can make a billion dollars on it, 1330 01:16:31,520 --> 01:16:34,599 Speaker 1: and I can afford to lose fifty million. It wouldn't 1331 01:16:34,600 --> 01:16:36,760 Speaker 1: be pleasant, but I can afford to lose it, but 1332 01:16:36,880 --> 01:16:39,240 Speaker 1: I can't afford not to make a billion. And if 1333 01:16:39,320 --> 01:16:41,360 Speaker 1: I do make it, I'll give some of the profits 1334 01:16:41,400 --> 01:16:43,880 Speaker 1: to people who work at Barren Capital. In addition, at 1335 01:16:43,920 --> 01:16:46,160 Speaker 1: Barren Capital would just be stronger. And my goal is 1336 01:16:46,240 --> 01:16:48,320 Speaker 1: to make it. They asked for a hundred years. So 1337 01:16:48,400 --> 01:16:50,479 Speaker 1: I wanted to be have a stronger balance sheet, even 1338 01:16:50,520 --> 01:16:52,919 Speaker 1: stronger than it does now, and they gave me permission. 1339 01:16:52,960 --> 01:16:55,920 Speaker 1: I said, I'm committing that I will be the last 1340 01:16:55,960 --> 01:16:59,400 Speaker 1: person to sell. So I'm the last person to buy 1341 01:17:00,000 --> 01:17:01,799 Speaker 1: because no one else is going to buy a parent capital, 1342 01:17:01,840 --> 01:17:03,200 Speaker 1: and I'll be the last one to sell. I'm not 1343 01:17:03,200 --> 01:17:05,559 Speaker 1: gonna sell anything until all of the shares are sold 1344 01:17:05,640 --> 01:17:08,880 Speaker 1: by all of my clients. And the directors of Barns 1345 01:17:08,880 --> 01:17:12,040 Speaker 1: Fun said, that makes it sounds reasonable. Uh, and it's 1346 01:17:12,080 --> 01:17:14,560 Speaker 1: fine to go do it, And so I did that, 1347 01:17:15,439 --> 01:17:18,320 Speaker 1: and uh it turned into way after a five or 1348 01:17:18,360 --> 01:17:23,120 Speaker 1: one split a million one shares. So uh, I told, uh, 1349 01:17:23,439 --> 01:17:27,400 Speaker 1: you know, so when the five hundred million two shares 1350 01:17:27,439 --> 01:17:30,240 Speaker 1: that we sold so far for clients I haven't sold 1351 01:17:30,280 --> 01:17:33,400 Speaker 1: a single share, fifty million became eight hundred fifty eight 1352 01:17:33,439 --> 01:17:37,080 Speaker 1: hundred sixty million or eight nine hundred millions something like that. Okay, 1353 01:17:37,360 --> 01:17:41,000 Speaker 1: that's not too bad a return. Oh, pretty cool. And 1354 01:17:41,320 --> 01:17:43,720 Speaker 1: I think that there's three more times to come from that, 1355 01:17:44,640 --> 01:17:49,160 Speaker 1: and uh and then over ten years and so so 1356 01:17:49,800 --> 01:17:53,200 Speaker 1: very easy. The advantage that we have is that just 1357 01:17:53,600 --> 01:17:56,320 Speaker 1: hardly I don't know any people. I'm sure they must 1358 01:17:56,320 --> 01:17:58,519 Speaker 1: be out there, but I don't know people who are 1359 01:17:58,520 --> 01:18:01,960 Speaker 1: investing for other. People said, I'm gonna make a ten 1360 01:18:02,200 --> 01:18:06,040 Speaker 1: ten year investment for a twenty year investment in a company, 1361 01:18:06,680 --> 01:18:09,679 Speaker 1: and as long as the fundamentals are as I expect 1362 01:18:09,800 --> 01:18:12,320 Speaker 1: him to be, stay with it, and I'm not going 1363 01:18:12,360 --> 01:18:15,720 Speaker 1: to worry about the price in the meantime. And you 1364 01:18:15,800 --> 01:18:19,320 Speaker 1: know so, so that's what I do. And as long 1365 01:18:19,360 --> 01:18:24,599 Speaker 1: as the fundamentals for here the business fundamentals PROTESTA. From 1366 01:18:24,640 --> 01:18:28,080 Speaker 1: the time we invested in it in two thousand fourteen 1367 01:18:28,760 --> 01:18:31,840 Speaker 1: UH to last year, the business grew from two lays 1368 01:18:31,880 --> 01:18:34,719 Speaker 1: and eight h to twenty five billion dollars in sales. 1369 01:18:34,800 --> 01:18:37,360 Speaker 1: The stock price didn't change, went up and down, up 1370 01:18:37,400 --> 01:18:38,720 Speaker 1: and down, up and down, and then went up ten 1371 01:18:38,760 --> 01:18:42,360 Speaker 1: times to the stock price caught up to U to 1372 01:18:42,439 --> 01:18:45,800 Speaker 1: the business, and now the business is going to grow 1373 01:18:45,880 --> 01:18:48,880 Speaker 1: faster than the stock price over the next ten years. 1374 01:18:49,040 --> 01:18:51,880 Speaker 1: I think, Wow, that's amazing. Let me let me throw 1375 01:18:51,960 --> 01:18:55,960 Speaker 1: you a curveball for our last question. You're ready for this? Ye? 1376 01:18:56,520 --> 01:19:00,960 Speaker 1: You You grew up in Asbury Park and years after 1377 01:19:01,080 --> 01:19:04,960 Speaker 1: you left, you were sort of unhappy because the Asbury 1378 01:19:05,080 --> 01:19:09,560 Speaker 1: Park football team ended up winning the state championship, but 1379 01:19:09,640 --> 01:19:12,800 Speaker 1: they were disqualified, and you were so unhappy about it. 1380 01:19:13,439 --> 01:19:16,640 Speaker 1: You bought trophies for the teams and got rings for 1381 01:19:16,880 --> 01:19:22,719 Speaker 1: all the players that were inscribed with undefeated on the field. 1382 01:19:23,200 --> 01:19:26,400 Speaker 1: Tell us about that. I read the article in the 1383 01:19:26,680 --> 01:19:32,799 Speaker 1: New York Times that described that, and uh, I felt badly. 1384 01:19:32,880 --> 01:19:35,519 Speaker 1: I mean, when I went to high school, it was 1385 01:19:35,680 --> 01:19:40,760 Speaker 1: a minority high school. I mean it was black and white. Uh. 1386 01:19:41,000 --> 01:19:45,120 Speaker 1: And maybe it was about that. Maybe it was two 1387 01:19:45,200 --> 01:19:47,400 Speaker 1: thirds white and one third black, or maybe it was. 1388 01:19:48,600 --> 01:19:51,080 Speaker 1: And there were two thousand kids there, and now there's 1389 01:19:51,120 --> 01:19:54,439 Speaker 1: a thousand kids when this happened, and it was virtually 1390 01:19:54,439 --> 01:19:58,640 Speaker 1: all minority, and uh, and the shining and it was 1391 01:19:58,760 --> 01:20:03,280 Speaker 1: eighteen or employment in Asbury Park, and the board walk 1392 01:20:03,360 --> 01:20:07,080 Speaker 1: was a mess, and I felt badly and and and 1393 01:20:07,520 --> 01:20:09,120 Speaker 1: so here are these kids. And there were two kids 1394 01:20:09,160 --> 01:20:13,320 Speaker 1: who were ineligible and they played on the team. And uh, 1395 01:20:13,680 --> 01:20:16,479 Speaker 1: because that day they first, I think it was, they 1396 01:20:16,520 --> 01:20:19,280 Speaker 1: were they went eight and oh or nine and oh, 1397 01:20:20,040 --> 01:20:22,360 Speaker 1: and all of a sudden went we took away all 1398 01:20:22,400 --> 01:20:25,160 Speaker 1: the victories and went oh and nine. And so I said, 1399 01:20:25,200 --> 01:20:27,760 Speaker 1: oh my god, this is this is everything for this town. 1400 01:20:28,520 --> 01:20:30,840 Speaker 1: And so I said that maybe it's something I can do. 1401 01:20:31,400 --> 01:20:33,360 Speaker 1: And it was this trophy case in the front of 1402 01:20:33,479 --> 01:20:37,800 Speaker 1: the school, uh, where he said, bought the trophies for 1403 01:20:38,320 --> 01:20:41,720 Speaker 1: and with the scores for every game that they had, 1404 01:20:41,720 --> 01:20:43,960 Speaker 1: and it's had undefeated on the field, and then every 1405 01:20:44,000 --> 01:20:47,479 Speaker 1: football player's name I had inscribed on there. And then 1406 01:20:47,520 --> 01:20:49,719 Speaker 1: I bought them rings that said undefeated on the field. 1407 01:20:50,200 --> 01:20:54,320 Speaker 1: And Springsteen UH read about it. And then he gave everyone, 1408 01:20:54,360 --> 01:20:58,680 Speaker 1: including me, baseball jackets, football jackets. It's said the same thing, 1409 01:20:58,760 --> 01:21:02,799 Speaker 1: undefeated on the fields I got. I got Springsteen jacket 1410 01:21:03,280 --> 01:21:06,600 Speaker 1: from that would be Bruce Springsteen of Asbury Park. I 1411 01:21:06,680 --> 01:21:12,720 Speaker 1: also have another story about Springsteen when when we when 1412 01:21:12,800 --> 01:21:16,840 Speaker 1: when I have my nineteen eighty we have our first child, 1413 01:21:17,120 --> 01:21:20,400 Speaker 1: Judy and I and we didn't have a weekend house, 1414 01:21:20,439 --> 01:21:24,479 Speaker 1: and we bought uh this this old house built in 1415 01:21:24,560 --> 01:21:28,680 Speaker 1: eighteen sixty on two and a half acres on Navasink 1416 01:21:28,760 --> 01:21:33,879 Speaker 1: River Road, nine Navastink River Road, uh and overlooking Rumson, 1417 01:21:34,040 --> 01:21:36,640 Speaker 1: overlooking the Navasink River and to the leftist so the 1418 01:21:36,720 --> 01:21:40,519 Speaker 1: ocean maybe sixty ft high and so and and it's 1419 01:21:40,600 --> 01:21:43,800 Speaker 1: now eighty and we paid two fifty dollars board in 1420 01:21:43,800 --> 01:21:48,360 Speaker 1: the middle of these fifteen acre states. Bon Jovi was 1421 01:21:48,479 --> 01:21:51,759 Speaker 1: on the street and Uh Roger Pensky was on the streets. 1422 01:21:51,800 --> 01:21:54,280 Speaker 1: They had big houses. We had this tiny little house 1423 01:21:55,720 --> 01:21:58,479 Speaker 1: and uh with a with a with a dirt basement, 1424 01:21:58,960 --> 01:22:01,320 Speaker 1: and so we have it were two and a half years, 1425 01:22:01,479 --> 01:22:04,760 Speaker 1: three years, and now we have two children. We have 1426 01:22:05,200 --> 01:22:07,439 Speaker 1: Duty's dad living with us, and we have a nanny 1427 01:22:08,120 --> 01:22:10,719 Speaker 1: and we're bursting at the Season's house. The guy knocks 1428 01:22:10,760 --> 01:22:14,080 Speaker 1: on our door and says, uh, I'd like to buy 1429 01:22:14,160 --> 01:22:16,559 Speaker 1: your house. And I said, well, it's not for sale, 1430 01:22:17,200 --> 01:22:21,160 Speaker 1: and uh, he says, well, how about for fos I 1431 01:22:21,240 --> 01:22:24,560 Speaker 1: said just a second. But it was the door to 1432 01:22:24,600 --> 01:22:27,040 Speaker 1: see Duty somebody wants to buy a house for four 1433 01:22:27,080 --> 01:22:30,559 Speaker 1: hunderzo dollars because she says sell it. So I opened 1434 01:22:30,600 --> 01:22:32,519 Speaker 1: the door and said, you just bought a house. And 1435 01:22:32,840 --> 01:22:36,160 Speaker 1: it turns out that this was a lawyer representing Springsteen. 1436 01:22:36,680 --> 01:22:39,200 Speaker 1: So he bought that house and he lived in it 1437 01:22:39,439 --> 01:22:42,840 Speaker 1: for he had a habit by he just gotten married 1438 01:22:43,400 --> 01:22:46,800 Speaker 1: and he needed to have it by Um I think 1439 01:22:46,840 --> 01:22:50,120 Speaker 1: of it like December fifteenth or as well. He wanted 1440 01:22:50,160 --> 01:22:55,040 Speaker 1: to have it for a celebration in December uh, and 1441 01:22:55,400 --> 01:22:56,920 Speaker 1: so we sold it to him at the end of 1442 01:22:56,960 --> 01:23:00,840 Speaker 1: the summer and you know, no problem. And then uh. 1443 01:23:01,040 --> 01:23:05,400 Speaker 1: And then what he did afterwards is that uh. For 1444 01:23:06,080 --> 01:23:08,920 Speaker 1: I was an the borter harvest man and he which 1445 01:23:09,000 --> 01:23:11,439 Speaker 1: is a day school and my kids went to and 1446 01:23:11,840 --> 01:23:15,880 Speaker 1: he would give us regularly when when they would have 1447 01:23:16,080 --> 01:23:19,880 Speaker 1: these auctions, I would call him his agents, who turns 1448 01:23:19,920 --> 01:23:23,120 Speaker 1: out now with the agents my friend. But I would 1449 01:23:23,120 --> 01:23:27,040 Speaker 1: call the agent and he would give us, uh, you know, 1450 01:23:28,680 --> 01:23:31,719 Speaker 1: record albums that would say he would autograph I would 1451 01:23:31,720 --> 01:23:36,679 Speaker 1: say R C. K. Rocket and then exclamation points Bruce 1452 01:23:36,720 --> 01:23:40,360 Speaker 1: Springsteen and I WoT auction for you know, hundred dollars 1453 01:23:40,400 --> 01:23:42,120 Speaker 1: to or whatever it was I would get, you know, 1454 01:23:42,320 --> 01:23:45,599 Speaker 1: get these these gifts, uh, that he would put out 1455 01:23:46,479 --> 01:23:50,840 Speaker 1: to raise money for Horseman. That's Ron, Thank you so 1456 01:23:51,000 --> 01:23:53,559 Speaker 1: much for being so generous with your time. We've been 1457 01:23:53,640 --> 01:23:57,479 Speaker 1: speaking with Ron Barron, founder of Barren Capital. If you 1458 01:23:57,720 --> 01:24:01,080 Speaker 1: enjoy this conversation, well, be sure and check out any 1459 01:24:01,120 --> 01:24:05,000 Speaker 1: of the other four d previous interviews we've had over 1460 01:24:05,040 --> 01:24:09,960 Speaker 1: the past six years. You can find those at Apple, iTunes, Spotify, 1461 01:24:10,200 --> 01:24:14,599 Speaker 1: wherever you feed your podcast fix. We love your comments, 1462 01:24:14,840 --> 01:24:19,759 Speaker 1: feedback and suggestions. Right to us at m ib podcast 1463 01:24:19,840 --> 01:24:23,320 Speaker 1: at Bloomberg dot net. Gives a review on Apple iTunes. 1464 01:24:23,520 --> 01:24:26,200 Speaker 1: If you would like to get my free daily reads, 1465 01:24:26,280 --> 01:24:29,040 Speaker 1: you can sign up for that at rid Halts dot com. 1466 01:24:29,479 --> 01:24:32,920 Speaker 1: Be sure and check out my weekly column at Bloomberg 1467 01:24:33,000 --> 01:24:38,080 Speaker 1: dot com slash Opinion. Follow me on Twitter at rit Halts. 1468 01:24:38,640 --> 01:24:40,439 Speaker 1: I would be remiss if I did not thank the 1469 01:24:40,560 --> 01:24:44,559 Speaker 1: crack team that helps put these conversations together each week. 1470 01:24:45,040 --> 01:24:50,280 Speaker 1: Reggie Bazil is my audio engineer, Michael Boyle is my producer. 1471 01:24:51,200 --> 01:24:55,200 Speaker 1: Atika val Bron is our product manager. Michael Batnick is 1472 01:24:55,320 --> 01:24:58,760 Speaker 1: up my head of research. I'm Barry RIH Halts, and 1473 01:24:58,920 --> 01:25:02,880 Speaker 1: you've been listening to Master's in Business on Bloomberg Radio.