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BY WARREN BOROSON
NEWJERSEYNEWSROOM.COM
BOROSON ON MONEY
What the Baron funds have done for 18 straight years is unique: Put on an extravaganza just for shareholders. In recent years, it's been at the Metropolitan Opera House.
Free breakfast, free lunch, free t-shirts, talks by people from companies the Baron funds own, talks by the managers of the Baron funds, a talk by Ron Baron himself – and finally, at long last, a celebrity guest.
Guests in the past have included Cher, Billy Crystal, Elton John, Jerry Seinfeld, Bette Midler, and Paul Simon. This year's guest: Rod Stewart.
What a disappointment! Here, I listened dutifully to a lot of sleep-inducing speeches (Ron Baron's was the most boring - if I wanted to hear a talk on the Woes of the World, a stock-picker is not the speaker I would have chosen). As my reward I got Rod Stewart. I listened to a little of his annoying noise, then departed.A woman I met at the parking garage had left early, she claimed, because Stewart had lost his voice two years ago. (But someone who stayed told me the audience loved him.)
Okay, down to business.
***
Spokespeople for companies that Baron funds own were worth listening to, and you might want to investigate their stocks: Strayer Education, Ritchie Bros. Auctioneers, Tetra Tech, Choice Hotels International, and Covance.
Covance was especially interesting, and not just because it's headquartered in Princeton. Value Line gives the stock two stars (above-average performance expected over the next six months to a year), and says nice things about the company's prospects.
The company's chairman and CEO, Joseph Herring, explained that Covance does drug development for top pharmaceutical companies, and business is booming. (It's a CRO - contract research organization.) Covance has offices in 22 countries, and does clinical studies in 32. It has $1.7 billion in annual revenues and more than 10,000 employees. In one case, Covance saved a client $500 million a year - "a great way," said Herring, "to build a relationship." www.covance.com, (888) 268-2623
***
I must confess that if I weren't invited to the Baron's fancy shindig every year, I might not own any Baron funds. In fact, I had to check my records to see which one my family does own. (Baron Growth.)
People living in and around New Jersey should especially be interested in the Baron funds. It is shareholders who don't come to these extravaganzas – mainly, those living outside the Metropolitan area - who subsidize us shareholders who do attend. And it must cost a few million. Renting the Met isn't cheap. And neither, I suspect, are the services of Rod the Noisemaker.
As for the meals, lunch choices included a sandwich of Black Forest ham, Wisconsin cheddar cheese, and green apples on a brioche roll, with mustard chutney. There was also vegetarian lunch, an Asian chicken lunch, and a kosher Asia chicken lunch. Again, costing a pretty penny.
***
All the Baron funds buy growth stocks – companies hot as firecrackers. This strategy doesn't always work. While the funds are doing fine this year, last year was a nightmare. Baron Fifth Avenue lost 38.92 percent, Baron Asset 40.75 percent, Partners 46.67 percent, Growth 39.18 percent, and Small Cap 40.24 percent.
In short, the funds are risky. Not only that, but they're not cheap. Morningstar complains about the funds' "relatively high costs."
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thank you
yours patrick.
P.S. You may wish to pan Rod Stewart, but his record sales (and the enthusiastic standing ovation he received at the end of his set) tell a much different story. I do agree though that Ron Baron should let his long=term performance speak for itself since his speaking style leaves much to be desired.