Muse ai is so impressive by startup standard that it’s hard for imagine meta did it. - Muse was the first to launch phone calls(before instinct) and it’s hard to imagine legal approves it. - Meta tried many times. The first meta AI chatbot was so bad that was laughable. Then the instagram bot didn’t go anywhere either. But third time a charm. - same thing for model: terrible llama4 and things turned around now. - takeaway: it’s ok to fuck up in AI world. Just keep shipping. People will laugh at you but keep shipping. Respect for meta.

The Price of a 100 Bagger Everyone wants to find a 100 bagger. We look at $AMZN, $AAPL and $NFLX and imagine investing $10,000 and watching it become $1 million, but we rarely think about the thousands of difficult days between those two numbers. In hindsight, extraordinary wealth looks almost effortless because history removes the uncertainty that made earning it so difficult. A 50% crash 20 years ago looks like a tiny wrinkle on a chart today, but when half your money is disappearing in real time, you have no idea whether you are looking at an opportunity or the beginning of the end. Great investments disappoint, become expensive, attract competitors and go nowhere for years, repeatedly giving intelligent investors intelligent reasons to sell. The price of a 100 bagger isn’t what you pay for the stock, it is everything you have to endure while owning it. Ironically, losing money isn’t the only thing that separates investors from extraordinary businesses, because making money can be equally dangerous. When $25,000 becomes $250,000, selling doesn’t feel fearful, it feels responsible, creating one of investing’s strangest paradoxes: we spend years searching for an exceptional business and then allow its exceptional success to become the reason we no longer own it. This is why finding a 100 bagger is easier than owning one. Plenty of investors understood that $AMZN was extraordinary long before it became one of the world’s largest companies, but recognizing greatness and allowing greatness enough time to matter require entirely different skills. Finding greatness requires intelligence, while holding greatness requires temperament. Eventually success creates another problem because the investment becomes large enough to frighten you. A $20,000 position feels like an opportunity, while the same position after becoming $1 million suddenly feels like a risk, even though nothing about the business necessarily changed. Sometimes the investment doesn’t become more dangerous, the amount of money simply makes us more afraid. Then there is envy, perhaps the most underestimated destroyer of long term wealth. Your wonderful business might be compounding at 20% while someone else’s stock triples in 6 months, and suddenly an outcome that should make you wealthy begins to feel inadequate. The market doesn’t always need to make your company fail to separate you from it, sometimes it only needs to show you something more exciting. A mature investor eventually learns to watch someone else make a fortune without feeling required to participate. There will always be a stock outperforming yours and an opportunity you somehow missed, but you do not need to own everything that goes up. You only need a few things you understand well enough to stay with when staying becomes difficult. Of course, this doesn’t mean blindly holding forever, because businesses deteriorate and moats disappear. The real skill is distinguishing between a broken stock and a broken business, because a stock can break many times on its journey to becoming a 100 bagger while the business only needs to break once. Patience means surviving changes in price, while stubbornness means ignoring changes in truth. Perhaps that is why 100 baggers are so common on historical stock screens and so rare in actual portfolios. The difficulty isn’t simply identifying an extraordinary company, it is surviving the countless moments when selling it appears perfectly reasonable. Compounding asks us to be right about something important and then resist the endless temptation to interfere with it. So when searching for the next 100 bagger, perhaps the most important question isn’t whether you are smart enough to find one, but whether you have the temperament to experience one. Buying a great business can take an afternoon, while owning it long enough to change your life can take half your life. 🌹

Ajit’s comment here reminded me of one of my favorite lines from Warren: "Most of our results come from about a dozen truly good decisions. That’s roughly one every five years." As true in investing as it is in life.

Back in 2022, $META market cap shed $750 billion in a single year. I published a piece asking: does this make any sense? My answer was no. What followed was one of the great business re-ratings of the past decade. I believe certain elements of that dynamic may be present today.🧵

Baron Capital Supports Elon Musk’s 2025 CEO Performance Award Baron Capital is in support of the proposed 2025 CEO Performance Award. We believe it reflects the same principles of accountability, performance and alignment with shareholder interests that drove Tesla’s past success. The plan ensures that shareholders win first, and that Elon Musk continues to lead Tesla for many years to come. We commend the Board for recognizing this and for working to retain Tesla’s most valuable asset. We believe the 2025 CEO Performance Award is right for the company, right for shareholders and right for the future. Baron Capital has been investing in @Tesla since 2014. Our shareholders and clients have benefited enormously from @elonmusk’s vision, determination and execution. Tesla’s success and its future are inseparable from Elon. Elon is the ultimate “key man” of key man risk. Without his relentless drive and uncompromising standards, there would be no Tesla. He has built one of the most important companies in the world. He’s redefining transportation, energy and humanoid robotics and creating lasting value for shareholders while doing it. His interests are completely aligned with investors. He owns 13% of the company. We will be voting FOR. Supplemental Information When my analyst team met with Elon Musk for two hours in our New York City office in 2010 during Tesla’s IPO roadshow, we thought his plans were more hopeful than plausible. Only one of our Funds made a small investment in Tesla at that time. But because Elon is a very impressive executive, we monitored Tesla closely for the next few years. Our research included several visits to Tesla's factories in Fremont, California and Reno, Nevada and frequent phone calls with Tesla executives including Elon. In 2014 when sales of Model S began to increase significantly, I concluded we had been wrong thinking that Elon would not succeed. From 2014 to 2016 Baron Capital purchased approximately $400 million Tesla shares at prices that were about 13X higher than Tesla's IPO price! Tesla's shares have since increased more than 30X our purchase price in 2014. Baron Capital has earned about $8 billion profits realized and unrealized from our Tesla shares for our clients and proprietary accounts. We began to purchase shares in another Musk business, @SpaceX, in 2017. We have invested about $1.3 billion to date in SpaceX. We have since earned about $4 billion profits realized and unrealized on those SpaceX purchases. Our recent $338 million investment in Elon's @xAI data center, social network and Grok AI, has produced about $340 million profits realized and unrealized to date. Profits earned from Musk-controlled businesses represent about 24% of the $52 billion profits we have earned for clients and proprietary accounts since 1992 when we managed $100 million in assets. Musk entities, due to their significant capital appreciation, now represent about 26% of our Firm's $44 billion AUM. We believe that Baron Capital could earn at least 5X the profits we have generated to date from the Musk ecosystem by 2035. If we are right, the beneficiaries of this success will be the estimated 1 million-plus working class and mass affluent, Baron mutual fund shareholders...their IRAs and 401(k) retirement accounts...as well as our institutional clients including endowments, foundations and sovereigns...and, looking through those entities, millions of additional individuals. Further, we think the impact of our investments in Tesla is far greater than the amounts we manage directly. This belief is based on the fact that virtually every day when I am walking on the streets of New York City or in restaurants or traveling...people approach me to say, "Thank you, Ron. You have changed my life!" That is since, for the past twelve years, I have appeared on CNBC’s Squawk Box three or four times a year and have spoken about Tesla...and lately SpaceX, too...and investors have obviously been watching and listening. Tesla's bonus contract with Elon has been written to achieve an objective to get Robotaxi and Optimus robots to scale. If successful, Tesla could earn $400 billion per year in adjusted EBITDA for an extended period by 2035. That could produce a market capitalization for Tesla of over $8 trillion. We believe by 2045 Tesla value could quadruple its 2035 levels. Tesla’s current market cap is $1.5 trillion. Elon will only achieve his full bonus payout if those objectives are met. Tesla shareholders benefit before he does by reaching aggressive market cap objectives that few believe can be attained. We think it is unlikely at this time anyone, but Elon could accomplish those objectives. We believe Elon is not only perhaps the most extraordinary engineer on our planet but an unusually competent businessperson. If he did not live in this country, we think it improbable there would be electric cars...reusable space rockets...Starlink broadband satellites...self-driving cars...giant storage batteries that can be added to America's electric utility grid quickly to provide required energy for AI data centers’ growth in our country...a satellite system protecting our homeland...super-fast manufacturing lines...AI digitizing physical processes...and who knows what else... We also deem it important that another element in Elon's bonus contract is succession. Tesla has 124,000 employees. The company hires only a small fraction of the millions of applicants from top engineering schools for Tesla engineering jobs. I found the comment of one Tesla Board member to me recently especially memorable: "Other AI businesses hire mercenary engineers. Tesla hires brilliant young engineers and trains them. Why would they ever want to leave?" Elon meets regularly with 30 to 40 engineers at a time in a room to discuss their work in various disciplines. And help solve problems they may be facing. Another Board member noted that when those employees leave the room, most are shaking their heads. The common refrain is that solutions to tasks they had thought unsolvable were outlined by Elon. On the fly. "I can't believe what we are learning," was heard most often from the best and brightest. It is rare that a senior executive challenges his prior assumptions recursively. Elon does. In my opinion, culture and people at Musk companies are unmatched at any publicly owned business I have visited in my 55-year career. That's because of him. From the large pool of awesome, talented engineers Elon is assembling, it should be possible to create an executive team to succeed Elon at some distant future point...if he ever decides he's done... If Elon ever leaves Tesla, we believe it's certainly not to sit on a beach somewhere drinking Mai Tai cocktails! On Mars, maybe. But a beach in the Caribbean? No way. Ron Baron (@RonBaronAnalyst) Founder CEO Baron Capital November 3, 2025 ______________________ You should consider the investment objectives, risk, charges, and expense of any of the Baron Funds carefully before investing. The prospectus contains this and other information about Baron Funds. You may obtain one from its distributor, Baron Capital, Inc., by calling 1-800-99-BARON or visiting BaronCapitalGroup.com. Please read it carefully before investing. The performance data quoted represents past performance. Past performance can be no guarantee of future results. Risks: All investments are subject to risk and may lose value. The discussion of market trends is not intended as advice to any person regarding the advisability of investing in any particular security. The views expressed in this document reflect those of the respective writer. Some of our comments are based on management expectations and are considered “forward-looking statements.” Actual future results, however, may prove to be different from our expectations. Our views reflect our best judgment at the time and are subject to change at any time based on market and other conditions and Baron Capital has no obligation to update them. Portfolio Holdings as a Percentage of Net Assets as of September 30, 2025: Tesla, Inc. - Baron Fifth Avenue Growth Fund (4.3%), Baron Focused Growth Fund (9.7%), Baron Global Opportunity Fund (1.9%), Baron Opportunity Fund (6.0%), Baron Partners Fund (33.2%*), Baron Technology Fund (5.2%); Space Exploration Technologies Corporation - Baron Asset Fund (6.3%), Baron Fifth Avenue Growth Fund (1.5%), Baron Focused Growth Fund (11.6%), Baron Global Opportunity Fund (10.4%), Baron Opportunity Fund (4.5%), Baron Partners Fund (18.1%*); X.AI Holdings Corp. - Baron Asset Fund (3.2%), Baron Fifth Avenue Growth Fund (0.8%), Baron Focused Growth Fund (2.2%), Baron Opportunity Fund (1.2%), Baron Partners Fund (0.7%*). *% of Long Positions. Portfolio holdings are subject to change. Current and future portfolio holdings are subject to risk. BAMCO, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Baron Capital, Inc. is a broker-dealer registered with the SEC and member of the Financial Industry Regulatory Authority, Inc. (FINRA).