Ron Baron Likes Netflix, Not DVDs Through The Mail

Ron Baron, chairman and CEO of Baron Capital, joins ‘Squawk Box’ to discuss the companies he thinks are revolutionzing their industries.

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Transcript

You like Netflix. Well I say to Netflix is interesting company. I thought they disrupted cable television disrupted movies you know when I looked at their company I don't know if 10 years ago 15 years ago when I went out to their facility in Long Island.

And that was weird of taking CDs and DVDs DVDs and sending in the mail in the mail.

A Reed Hastings says Look Ron this is. I said I don't get Netflix with said me. And he said It's about streaming. He says if I wanted to have a business that was sending DVDs through the mail I would have called this DVDs through the mail. We call it Netflix streaming business. So business is now Spotify. They're disrupting Apple Apple disrupted CD business. Charles Schwab they disrupted other bruit other brokerage firms initially the discount broker and now they have invested in them in 1992 they had 60 billion dollars of customer assets there. They're now three and a half true in stocks of 50 or 60 times Space X investing in Space X now.

Space X really interesting that it can't get a private investment for Baron Capital right earned funds. Right. So Barend partners owns bearing books prednisone that SpaceX not a publicly traded and it's public it's private.

Now I don't know how long it will remain private I presume for some period of time. I would love to have. When Shotwell speak at our annual meeting. But basically their disruption is that. It used to be that you would send up these rockets and you'd have Boeing and Lockheed and they'd be spending hundreds of millions of dollars. And you remember when John Glenn goes up and then the stages fall off of the rockets and they throw them away and they burn up in the atmosphere will cost 250000 dollars in fuel to fly for one of these rockets that's 250000 dollars and they throw away hundreds of millions of dollars. So SpaceX says OK what we're going to do is we're going to reuse the rockets over and over and over again we're going to take them up just like you'd see in the movies the space shuttle. Yes. And then land them again and you can't do that. That's like taking a pencil and having it land on the eraser. What they can do it is they approved it. China says Space X is 10 years in a Wall Street Journal editorial they say. China says Space X is ten years ahead of us ahead of China. They say surprisingly it's a private company is ten years ahead of us.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and three kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own 2.5 grams of Gold