Billionaire buy-and-hold investor Ron Baron said Friday he sees three factors driving the stock market in the long term: the economy, low interest rates and low oil prices.
The economy should grow "very nicely" over the next 20 years, Baron told CNBC's "Squawk Box" from the Metropolitan Opera House in New York City, where he's holding his 24th-annual investment conference.
That, in turn, would pull the stock market along because the Dow Jones industrial average historically tracks the economy, he said, noting the Dow is trading around 18,000 and the U.S. economy is worth $18 trillion.
The Dow, and the Nasdaq composite were on pace for a sixth-consecutive positive week for the first time this year, despite modest losses in the past two sessions.
As Thursday's close, the Dow was still fractionally positive for the year, while the S&P was up nearly 2 percent and the Nasdaq was almost 8.3 percent for 2015.
In testimony before a House panel Wednesday, Federal Reserve Chair Janet Yellen reiterated the possibility of an interest rate increase in December, if the economic data cooperates.
A key factor in the Fed's decision came Friday morning, when the Labor Department reported strong October employment figures.
With all the talk about when the Fed might hike rates for the first time in nine years, the Baron Capital chairman and CEO said rates will likely stay low for a long time, despite possible any near-term moves.
"The big picture that we have is that the country is heavily in debt," he said. "We're in the process of deleveraging. The idea that interest rates are going to go up a lot anytime soon is a fallacy. [They're] going to go up but ... not a lot."
The notion that easy monetary policies since the 2008 financial crisis have artificially inflated stocks should not be a factor for long-term investors, he said. "All those are very short term." He believes the stock market is currently "normally priced."
Against the backdrop of higher rates and global turmoil created by a slowdown in the Chinese economy, the U.S. stock market took a dive over the summer after a relatively stable first seven months of the year.
On Aug. 25, the Dow, S&P, and Nasdaq dropped to their closing lows of the year. Over the next month or so, all three of those measures tested but did not breach those levels. Since the end of September, stocks have risen by low double digits.
Baron also predicted cheap oil for a long time because decades of prices way above the cost of production led to a boom in exploration and discovery of new stores of crude in the U.S. and around the world.
"You have huge amounts of reserves that we don't need," he said. "Any time oil prices go up, you're going to be met by this extra reserve which will force it back down again."
Baron formed the investment company that bears his name in 1982 when the per-barrel U.S. crude prices were in the high $30s and the Dow was around 880.
With $25.1 billion in assets under management, Baron Capital manages 13 mutual funds with investments in about 450 companies.
— CNBC's Lori Ann LaRocco contributed to this report.