Giving Thanks to Innovators Who Create Dividends in Investing and in Life

Giving thanks to innovators who create dividends in investing and in life seems fitting to include among the many blessings I hope we all enjoy.

I want to share several of my key reasons for giving thanks to innovators who create dividends in investing and in life. Many of those dividends come in future years that depend on taking vital steps forward now.

One example of innovation comes from entrepreneurs like Elon Musk, the founder and chief executive officer of Tesla (NASDAQ: TLSA) and the chairman of SpaceX. I have followed the auto industry since my boyhood years growing up in car-producing Michigan and I also turned a fascination about space and rockets into a beat early in my journalism career. I have observed that successful companies in both industries typically become large cash flow generators and ultimately dividend payers.

Giving Thanks to Innovators Who Create Dividends in Investing: Own It!

Despite Tesla and SpaceX needing to put capital into growth right now to establish themselves as market leaders in their respective fields, the possibility that both will become dividend-paying equities in the future would not surprise me. For income investors who do not mind buying shares of Tesla before it starts to pay a dividend, their reward could come in the form of share price gains now and dividends in the years ahead.

The value of innovative leadership was crystallized when I spoke with Ron Baron, the chief executive officer (CEO), chairman and a portfolio manager at New York-based Baron Capital, an investment management firm that he co-founded in 1982. He, his portfolio manager sons Michael and David, as well others at the long-term-focused mutual fund company said that the top leadership traits of successful CEOs include vision about the future, people-centric qualities, adaptability and self-reflection.

The theme of the 30^th Annual Baron Investment Conference on Nov. 10 in New York City was “Own It!” Baron Capital and its investment funds closely scrutinize the CEOs and the companies they research to choose the ones that are worth owning, not just buying as short-term trades in hopes of a quick gain.

“As true for individuals and companies, masterpieces are not created on the first try; it took da Vinci 16 years to create the Mona Lisa,” said Ron Baron, sharing his belief in business leaders who sacrifice near-term profit margin to create a sustainable competitive advantage. “Exceptional takes time.”

Paul Dykewicz and Ron Baron speak after the Baron Investment Conference.

Giving Thanks to Innovators Who Create Dividends in Investing: Tesla

With that thought in mind, Baron Capital had amassed $4.42 billion of Tesla stock by September 30, 2023. With the electric vehicle company’s current market capitalization at $750 billion, Baron Capital owns 0.60% of Tesla.

In terms of Baron Capital’s $40 billion in assets under management, Tesla composes 11% of the total. In comparison, SpaceX accounts for 3.75%, or approximately 4%, of Baron Capital’s assets under management.

Baron Capital owned $1.5 billion of SpaceX, or 1% of the privately held rocket launch and satellite services company, as of Sept. 30. That percentage of ownership is based on SpaceX’s current $150 billion valuation, David Baron informed me.

Chart Courtesy of www.stockcharts.com

Tesla shares produced a 50.01% gain in the Fast Money Alert trading service co-led by Mark Skousen and Jim Woods in less than two months between the recommendation on January 9, 2023, and March 8, 2023. The Fast Money Alert subscribers who bought the related options that the duo recommended were able to notch a huge average gain of 280.15% in under 60 days.

Paul Dykewicz meets with Mark Skousen, head of Fast Monday Alert, and a Benjamin Franklin scion.

Investors in Tesla need to be prepared for volatility. The trading service’s most recent recommendation in the electric vehicle company stopped out at a loss of less than 20%. Those stop losses are a safeguard in Fast Money Alert to avoid big drops, while allowing for potentially massive gains like the returns on the Tesla stock and options early in March 2023.

Jim Woods, co-head of Fast Money Alert.

Giving Thanks for Innovators Who Create Dividends in Investing: SpaceX

SpaceX has immense potential to become a preeminent launch services provider and global broadband supplier. Traditionally, launch services costs have been high due to the decades-long practice of using expendable rockets. SpaceX is leading the charge among its rivals to become a leader in far more cost-effective reusable launchers.

Imagine buying any kind of vehicle and only using it once. That is not cost-effective for any consumers to justify purchasing an automobile. However, that had been the only option available to launch spacecraft until the advent of the multi-use U.S. Space Shuttle and now SpaceX.

The early SpaceX launch failures are nothing unusual in the development of rockets. The impressive part about SpaceX to me is that the company’s engineers, led by Musk, learn from failures on a path that seems destined for ultimate success. Other reusable launch vehicles are under development from companies such as Blue Origin, Virgin Galactic, Europe’s main expendable launch service provider Arianespace, as well as competitors in China and Japan.

Paul Dykewicz meets SpaceX President and Chief Operating Officer Gwynne Shotwell

Giving Thanks for Innovators Who Create Dividends in Investing: Reusable Launchers

As someone who loved covering the satellite and space industries early in my career before I earned my master’s degree in business, with a focus on finance, at Johns Hopkins University, I am fascinated by the progress occurring to slash the cost of putting satellites into orbit by reusing vehicles. I understand that launch failures create a dramatic visual effect that tends to become a big story on television news programs and in newspapers and magazines. Keep in mind that few other companies face the same level of public scrutiny of their failures.

An important success for SpaceX launch took place on Monday, Nov. 20, when its Falcon 9 launched 22 satellites for the Starlink global broadband service into low Earth orbit. The mission marked the 15^th flight for the first-stage booster that previously launched Sentinel 6 Michael Freilic, DART, Transporter 7, Iridium OneWeb, SDA-0B and 10 prior Starlink satellite deliveries into low-Earth orbit.

Starlink is part of the SpaceX empire. Despite SpaceX becoming the most familiar name of the two, Starlink reportedly has gained more than 2 million subscribers for its broadband internet service in 60-plus countries.

Giving Thanks for Innovators Who Create Dividends in Investing: Baron Funds

I love tracking the latest technological developments and sharing that information with my readers, as well as ways to profit from such advances. Anyone who wants to invest in privately held SpaceX can do so indirectly through Baron Funds.

The Baron Focused Growth Fund (BFGFX), managed by Ron and David Baron, offers Tesla and SpaceX as its two largest holdings, with 11.3% and 8.7% of the mutual fund’s assets, respectively. BFGFX is up 16.18% through Sept. 30, when Baron Capital reported the latest results.

Chart Courtesy of www.stockcharts.com

The Baron Partners Fund (BPTIX), with Ron and Michael Baron as the portfolio managers, also has Tesla and SpaceX as its two biggest holdings. Tesla accounts for 36.2% of the fund’s assets, while SpaceX has attracted 9.7%. BPTIX is up 32.36%, as of the most recent data on Sept. 30.

Chart Courtesy of www.stockcharts.com

Giving Thanks for Innovators Who Create Dividends in Investing and in Life: My Team

Since this is my Thanksgiving column and I am finalizing it on the holiday itself, it seems fitting to share sincere words of appreciation for my colleagues who work with me each day to meet the highest standards possible. My longest tenured staffer is Toni Mikec, a fellow Johns Hopkins master’s degree recipient who graduated from the university’s renowned School of Advanced International Studies (SAIS). Other members of my talented team are Emily Mirabelli, Lindsay Gregson, Natalie Novakova and Andra Durham.

When I asked earlier this week if any of them could stay late to finish an investment newsletter to ensure we could email it to our subscribers as soon as possible, all offered to do so. They were invaluable and avoided a delay in delivery of the investment information until the next day.

Thanks also goes to my long-time Publisher Roger Michalski, new Associate Publisher Jack Lizmi and seasoned Marketing Director Kim Hyde-Santucci. Further praise goes to Dave Evans, the chief operating officer of Salem Media Group and a hands-on president of its New Media business, encompassing my Eagle Financial Publications unit. A big thank you is extended to our company’s Chief Executive Officer David Santrella, as well as our many investment gurus, art department staffers, corporate attorneys, customer service and marketing colleagues.

Paul Dykewicz meets with George Gilder, head of Gilder’s Technology Report.

Early in November, Rose Schirillo-Elliott, a recent addition to our marketing team, was a terrific partner for me at the COSM Technology Conference in Seattle. We joined George Gilder, a prominent technology futurist, who heads Gilder’s Moonshots, which recommends high-potential technology companies before they are well known, and Gilder’s Private Reserve, a source of privately held companies that can be invested in prior to initial public offerings (IPOs). While at COSM, Rose helped me line up and tape interviews with Ark Invest CEO Cathie Wood, debt financing pioneer and public health advocate Mike Milken, as well as Gilder himself.

 Cathie Wood gives her favorite recommendations to Paul Dykewicz.

Finally, I give thanks to you, my loyal readers, who I try to guide while I seek to demystify the market’s machinations.

Paul Dykewicz, www.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is a great holiday gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.