A top fund manager backed Tesla early after a surprise pitch from Elon Musk - and bet on Google after meeting with Ask Jeeves
- The head of Fidelity's $132 billion Contrafund placed early bets on Google and Tesla.
- Will Danoff heard about Google from Ask Jeeves, and Elon Musk pitched him on Tesla.
- Danoff met with Tesla as "an afterthought" because he had a gap in his schedule.
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The manager of a $132 billion mutual fund made two of his best investments because he met with the bosses of a now-defunct search engine, and received a surprise pitch from Elon Musk.
Will Danoff, who has managed Fidelity Contrafund since 1990, told the story to journalist William Green. It appears in Green's new book, "Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and Life."
Danoff, who meets with the heads of hundreds of companies each year, spoke to Ask Jeeves' management in 2004. They told him their business was getting crushed by Google, piquing his interest in the search-and-advertising upstart.
The fund manager met with Google's leaders a few months later, and quickly realized he had found something special. Unlike other technology startups, the business was not only growing fast, but also boasted strong profit margins and a robust balance sheet, he told Green.
While other portfolio managers shied away from the company's IPO that year, Danoff rushed to buy shares and became one of the group's biggest investors - a decision that paid off hugely. Contrafund still counts Google-parent Alphabet among its largest holdings, along with Apple, Amazon, Facebook, Microsoft, and Warren Buffett's Berkshire Hathaway.
Danoff made another lucrative investment because he couldn't bear to have an empty slot in his schedule.
During a research trip to Palo Alto in 2010, Danoff set up a meeting with Tesla as "an afterthought," he told Green. That changed when Tesla founder Elon Musk made an impromptu appearance and laid out his vision of "making fabulous cars that America is going to be proud of again."
Danoff was blown away and took an early stake in the electric-vehicle company. Although he sold most of Contrafund's Tesla shares a few years ago - meaning he largely missed out on the stock surge last year - he has still scored a handsome return on his wager.