Ron Baron told CNBC on Tuesday that investors can learn as much, if not more, from their mistakes than their successes.
The billionaire buy-and-hold stock specialist talked about his lessons from two stocks: Under Armour, which he got really right, and Netflix, which he got really wrong.
Starting with Under Armour, Baron told "Squawk Box" he's made at least 10 times his money. "We recently bought, in the past week, 1.5 million [additional] shares, when the stock has come down a couple points because they lost a customer."
He started buying UA shares in 2005.
Instead of doing $5.1 billion in sales this year, Baron expects Under Armour to have $4.9 billion. But his message to investors who want to be in stocks for the long haul is: "Nobody is going to think about this in a few years."
"What I think about is the company is going to go from $5 billion to $20 billion in 10 years or eight years," he said. "When they get there, they'll make a 15 percent profit margin."
"I think we're going to make three or four times, probably four times [our money] in the next 10 years in Under Armour," said the chairman and CEO of Baron Capital, which has $21 billion in assets under management.
Patience is proving profitable for Baron with Under Armour.
By contrast, Baron said he pulled the sell trigger too early on Netflix, a stock he bought in the early days of the tech company.
Baron recalled conversations with Netflix chief Reed Hastings, who tried to make the case that the company was going to be a whole lot more than just a DVD movie rental by mail business.
"I couldn't understand why other people didn't do" DVDs by mail, Baron said, adding he did not get the concept that Netflix was going to move to movies over the internet as its name suggests.
Netflix stock hit a wall in 2011 as customers reacted negatively to new pricing and the later-abandoned plan to separate its DVD service from the faster-growing internet streaming.
"[When] the stock fell from $150 to $50 or something like that, [Hastings] was saying, 'You got to buy the stock,'" Baron said, referring to Netflix share prices before the 7-for-1 stock split last summer.
"So I invested in the company at $50 or $60 or $70," Baron said. "And it goes up a bit, and I say I don't understand it well enough and I sell it. And then it goes up 10 times."
"It's the stupidest thing. I totally blew that one," he admitted.
"So you make mistakes," Baron said. "You learn from them. You learn probably at least as much from your mistakes as you do from the big gains you've had."
In Tuesday's CNBC interview, Baron also said the overall stock market was cheap and Tesla Motors could eventually be one of the world's biggest companies.
To watch the broadcast interview in its entirety click here, but you must be a CNBC PRO subscriber.