Ron Baron - The Bear Baiter

“The Bigger the Bear the Better the Opportunity”

Ron Baron

Ron Baron

Ron Baron is a Wall St veteran who began as a junior stock analyst and today manages $6 billion in assets. Some of his early clients were the other rising stars of Wall Street: names like Peter Lynch, Julian Robertson and George Soros. Ron made his career as a short-seller in the 73/74 bear market and considers bear markets "perfect opportunities to make money". In 1982 Ron struck out on his own, founding Baron Capital Management, a registered investment advisor, which led to the Baron family of funds. He prefers to work in a slow, steady-growth economy with no interest rate volatility. They say, "when everyone else want to sell, Ron wants to buy." Ron sees it differently. He sees it as commonsense.?- We buy stock that can double its price in 3-5 years - and then redouble; companies who're growing faster than the economy and have long term sustainability.?- We're not looking to mirror any index - we're putting together a portfolio of great businesses with long-term growth potential.?- We intend to lose less money during bad markets and keep pace when markets are strong.

Ron observes - the average small cap growth mutual fund has an annual turnover of 113%; they own stocks for 9-10 months. Our turnover is 20%; we own stocks 4-5 years ... some for 10-15 years. Because we think long term and most investors think in quarters this creates great opportunities. We invest in mega-trends - broad societal and demographic trends, like boomer demands for healthcare, entertainment, recreation and comfortable retirement. Trends that nothing will stop. Trends that are not whims or hot flushes.

These solid social changes or developments will play out over years and years - even decades. We invest in businesses that meet these new needs. For example – we invest in education because it is in demand and will stay in demand for years. 75% of the population has no college degree - can't readily get a job or advance due to lack of qualifications. Security is a new trend since 9/11. There are growth opportunities in marketing personal background data for insurers - publicly available data. ("If the 1990s were about technology, this decade will be about security.")

Rather than directly investing in technology, we invest in companies that leverage off it. Example - not the Internet itself but companies who will use its capacity to accelerate communication or access to information. Or companies that teach new technology or consult it or use it to expand their businesses. Ron invests a fair amount of heart in his judgments too. He talks about "investing in people ... not just buildings" and tells how he "kicks the tires" when inspecting companies - but that's homespun chaff compared to his wish to be "solving problems for America and helping fellow citizens fulfill their aspirations". It's this human element that adds extra character to the Baron funds.

Ron Baron is the founder, president, chief executive officer, and chairman of Baron Asset Management Company and Baron Capital Group (and its subsidiaries) and is the principal owner of Baron Capital Group. He has managed the Baron Growth Fund since it began and it is now in the top 10% of its category.

Ron Baron's Scorecard

These five criteria contribute to the selection process which helped us to choose Ron Baron as one of our select group of Money Masters.

1 Manager Tenure Check!
2 Performance Results Check!
3 Style Consistency Check!
4 Regulatory Compliance Check!
5 Availability Check!

The fund we are investing in to gain access to Money Master Ron Baron is:

Fund Name:Baron Growth
Fund Symbol:BGRFX
Fund Summary:

Baron Growth Fund seeks capital appreciation. The fund invests primarily in common stocks of smaller growth companies (market value under $2.5 billion) selected for their capital appreciation potential.

Baron Funds
  • Total assets under management - $18.3 billion (as of 6/30/08).
  • Founded in 1982 by Ron Baron.
  • The firm takes a long-term view, investing in businesses that show open-ended growth potential and the capacity to double in size within four years.
  • Businesses that provide a unique product or service appeal most - ideally linked to a secular mega-trend; a broad societal or demographic trend.
  • Stocks are bought at a below-value price and typically are held an average of eight years. This strategy helps to reduce risk and provide higher tax efficiency.

* Notes: The 10-year average return shown for BGRFX is for the 10-year period 01/01/02 - 12/31/11. The average was calculated by adding the results for the 10 consecutive calendar years shown and dividing that result by 10.

The 10-year average return and 10 individual annual performance results are shown with all dividends and gains reinvested and are net of all fund fees. All fund expenses have already been deducted from the percentage results shown.

Source for Calendar year results: Zephyr StyleADVISOR

Past performance is no guarantee of future results. Actual future results will vary.

The Retirement Corporation of America (RCA) is under no obligation to use featured managers or funds and will change managers should they fail to meet our selection criteria.

Information pertaining to RCA's advisory operations, services and fees is set forth in RCA's current disclosure statement (copy available upon request from RCA).