Top-rated fund manager on long-term investing: Be willing to hold a stock for 8 years

Andrew Peck, a top-rated portfolio manager of the Baron Asset Fund, a mid-cap growth fund that's generated annualized returns of 12 percent the last five years, sat down with CNBC's Mike Santoli at the Baron Investment Conference in New York to discuss his approach to long-term investing.

The money manager explains that the typical investment in his fund is held for an average of eight years, a key feature that's allowed him to outperform his peers, in his opinion.

"When I am contemplating a new investment, the question I'm asking myself is, what type of company can I identify that I would feel comfortable owning for that period of time?," he said.

During that analysis, he thinks there are certain characteristics that can help investors identify long-term opportunities. One of them relates to ensuring a company has a "meaningful and sustainable competitive advantage."

"Is the company doing something truly differentiated, and do we think that differentiating factor can persist for an extended period?" he said.

In this wide-ranging interview, Peck, who manages $2.5 billion in assets and has more than 20 years of investing experience, also discusses:

  • How to identify sustainable investment opportunities.
  • His favorite stocks for long-term investors.
  • One of the mistakes investors make when valuing stocks.

This exclusive interview, along with other premium content, is only available to CNBC PRO members.