Ron Baron says buy growth stocks to beat inflation

Published Thu, Apr 7 20229:26 AM EDTUpdated Thu, Apr 7 202211:03 AM EDT

Billionaire investor Ron Baron on Thursday said to buy shares of growth companies to beat inflation. "Everything is inflation," Baron told CNBC's "Squawk Box." "What you have to do is protect yourself against that and investing in growth companies is the way we do that." "What we try to do is to double our money every five or six or seven years by investing in companies that, instead of growing at 7% or 8% a year, are growing at 15% plus a year," he added. The Baron Capital chairman, chief executive and portfolio manager is one of Tesla 's largest shareholders and a longtime backer of the electric vehicle maker and CEO Elon Musk . Baron's comments come as inflation rises at a pace not seen in decades. The U.S. consumer price index for February rose 7.9% from a year ago, the highest level since 1982. Worries about inflation, rising oil prices, the lingering Covid pandemic, the war in Ukraine and the Federal Reserve's plan to hike interest rates and tighten monetary policy have loomed over markets this year. "I worry about this stuff, but I don't think about that," Baron said. "Just think about the long term — what something's going to become as opposed to where it is." "The way we have outperformed over the long term is because we invest in companies when they're investing in themselves," he added. The SPDR S & P 500 Growth exchange-traded fund is down 10.6% in 2022, versus the SPDR S & P 500 Value ETF 's 0.8% dip this year. That compares with the S & P 500's roughly 6% decline. Shopify is one growth name in Baron's portfolio. The stock has struggled this year, down 52.3%. Baron said he has bought "a little bit, but not very much" more during Shopify's downturn. The firm has $200 million dollars invested in Shopify out of about $50 billion, according to Baron. "There's lots of opportunity to provide more services and charge higher prices," Baron said of Shopify. Charles Schwab is a longtime fixture in Baron's fund. He said he has owned Schwab since 1992. Schwab is down 3.8% in 2022. "I have over a million shares ... that I bought then when I had hardly very little money, and I've never sold anything," Baron said of Schwab. "They revolutionized the way you buy mutual funds." As for Tesla, more than 12% of Baron's assets under management are invested in the EV maker. Tesla shares are down about 1% since the start of the year. "I think we're going to make three or four or five times our money in the next ten years in Tesla," Baron said.