Billionaire Ron Baron: Years after financial crisis, investors still fear stocks

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Billionaire buy-and-hold investor Ron Baron said Tuesday he believes stocks are cheap because people are still afraid to put money in the market in the wake of the financial crisis.

"Everyone is afraid because of what happened in 2008 and 2009. They can remember that very clearly," Baron told CNBC's "Squawk Box. He also cited concerns over the flash crashes of 2010 and last summer.

But Baron said he ties the stock market with the economy. "The stock market gets the tailwind from the economy," he said in an interview in which he also talked about stocks he likes such as Tesla and Under Armour and missed opportunities such as Netflix.

When it comes to Tesla, in particular, Baron said Tuesday he thinks the stock is one he could own for another 10 or 20 years.

"The economy doubles in size every 10 years, and what we try to do is double in value every five years" by finding companies with great growth potential, he added.

The chairman and CEO of Baron Capital, with $21 billion in assets under management noted, however, that the economy in the near-term might grow "a little slower because we've got to reduce some of the debt."

Since the terrible 2016 start and the bottom on Feb. 11, the stock market as measured by the has gained nearly 14 percent. As of Monday's close, the S&P was at its highest level of the year, less than 1 percent from its May 2015 all-time closing high.

To watch the broadcast interview in its entirety click here, but you must be a CNBC PRO subscriber.