Ron Baron talks about his investment firm's approach: "We maintain full ownership of our investments."

More and more, we are becoming a transactional, impulse-driven society.

People's attention spans have significantly decreased due to their reliance on smartphones and computers for distraction.

Businesses have simplified the process of acting on our impulses.

Buying items, ranging from a small cup of coffee to a car or even millions of dollars in bitcoin, is now effortlessly attainable with a simple swipe or click.

What do we think a lot about in a world ruled by impulses?

Take the markets, for example.

The collapse of regional bank Silicon Valley Bank and others this year was largely due to investors' ability to quickly withdraw their funds using their smartphones.

Would these banks have failed regardless? Impossible to say.

The run on these banks was caused by panicked investors, not by a rational analysis of the circumstances.

A full-blown banking crisis was almost caused by impulsive decision making.

Taking the long view

In this fast-paced era of instant gratification and fleeting connections, our approach at Baron Capital may appear outdated, but we stand by our principles. We take responsibility for our actions and seek out high-conviction growth opportunities that we can maintain our commitment to over the long term.

To achieve long-term success, we prioritize the competitive advantages and exceptional executives with high character.

Our investment process is built on a strong research bench, which we refer to as "actual intelligence" rather than "artificial intelligence."

Imagining the future, evaluating character, talent, and vision cannot be done by algorithms.

An algorithm cannot evaluate the qualitative attributes of a company and its leaders to determine if it is a suitable investment.

Our proprietary research guides us in constructing a portfolio that aims to surpass its benchmark in the long run, although there are no assurances. However, we do not adopt a passive buy-and-hold approach; instead, we actively manage our investments for an extended period.

I interview executives of the companies we invest in at least once a day and often more than that. Besides regular meetings with management, we visit factories and headquarters, speak with competitors, customers, suppliers, and industry experts, and read everything we can find.

Our investment decisions are not influenced by others' opinions, and our investment horizon is perpetual.

Staying the course

We, as growth managers, believe that a long-term investment horizon is crucial to achieving above-average performance. We often follow a company for an extended period before deciding to take a position.

As long as our thesis remains intact, we will remain invested.

We have held shares in our longest currently held position for more than three decades, with our initial investment costing less than a dollar each. As a result, our current stake represents almost 100% profit.

The hardest part of what we do is knowing when not to sell.

Staying calm and composed during challenging times, such as a missed earnings report or a market downturn, requires a great deal of conviction.

Our ownership mentality allows us to detach emotions from our calculus.

A CEO doesn't abandon their company due to a poor quarter, and similarly, we should not abandon our investments. This approach is crucial to successful investing.

Many investors, both nonprofessional and professional, make buying and selling decisions based on their emotions.

Those who sell during big down days may miss out on the subsequent up days.

We also own our mistakes.

If our investment premise is incorrect or growth prospects are no longer advantageous, we will sell immediately, even though it may take years before we make the decision. Making mistakes is inevitable in this business.

To achieve success, investors must embrace the possibility of making mistakes and learn from them through post-mortem analysis.

Ownership mentality

Although it's okay to make the occasional error, we always want to make fresh ones.

We look for the same ownership mentality in the leaders of our investments.

We prefer executives who are equally committed to the success of their companies as we are.

Elon Musk, the CEO and founder of SpaceX, is renowned for frequently sleeping on the factory floor beneath his desk.

Since elementary school, Bernard Arnault, CEO and founder of the French luxury goods conglomerate, has had his five children and now his grandchildren accompany him on store inspections. Now, all four children work at the company.

Jeff Bezos, CEO and founder of Amazon, worked tirelessly for nearly a decade before the company made its first profit in 2001, which amounted to a modest $5 million.

We invest in executives who share our ownership mentality, including these three examples.

I would like to mention that I apply the same method to my own enterprise.

My entire career has been dedicated to studying, researching, investing in, and abstaining from selling exceptional businesses.

Baron Capital has been shaped by what I have learned.

We consistently invest in our 45-member research team and more than 200 employees firm-wide, even during uncertain times like now. We have never had a layoff, and many of our employees have spent most of their career at Baron Capital.

Our portfolio managers, along with the majority of our employees, have substantial investments in our funds.

We believe in our investment process and our firm. We own it.

—Ron Baron is the CEO of Baron Capital.