Scott Berg is ready to put his neck on the line in his assessment of Tesla and its returning value.
Mr Berg, the portfolio manager for the T.Rowe Price Global Equity strategy and vice president of T.Rowe Price Group made the statement during his assessment of technology investments.
Mr Berg told the room that T.Rowe invested in a variety of tech companies and said that some of the best returns were from non-FAANG investments.
“The FAANGs have been good to us but it’s been less than 5 per cent. Philosophically what I’m trying to do is get all these other great businesses that you’re not going to get exposed to,” said Mr Berg.
One of those great businesses Mr Berg said was Tesla, which he said was going to be the next big company.
“I'll say right now, I think Tesla, I think I’m going to make 100 per cent on my investment with Tesla over the next three years. I think it’s that good,” said Mr Berg.
Tesla’s infamous founder Elon Musk has made headlights recently for smoking marijuana during a podcast, but Mr Berg said Mr Musk's eccentricities were known to him before investing.
“From day one, I knew that Elon was a genius type CEO who had some very weird personal eccentricities. So when you get some of these weird things happen, it’s not like that was a surprise to me,” he said.
Mr Berg said that Tesla was a perfect example of what he looks for when investing in a tech company as it was more than just having electric cars.
“We look for things that are truly unique and transformative inventions or technological changes. Things that are really big,” he said.
Tesla is seen as a bit of risky investment as Mr Musk is seen by the industry to overpromise and underdeliver every quarter, said Mr Berg.
“I've always said I can’t predict Tesla’s quarter, but the thing is at the start of this year they had a magic number to get to 5,000 cars made a week. Right now, they are making 6,000 a week,” he said.
Over the next 10 years, Mr Berg predicts that Tesla will be in their top 10 best stocks over 10 years.
“I think Amazon has been our single best stock over 10 years. Apple has been the second-best stock for us over 10 years. I think Tesla is very likely to be in the next top 10,” he said.
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Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]
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