‘You take what you earn with the sweat of your brow, then you take a percentage of that and you invest it in other people’s labor.’
That’s it. That’s how billionaire optometrist Herbert Wertheim, “the greatest investor you’ve never heard of,” explains his steady climb to massive wealth, according to a Forbes interview earlier this year.
Wertheim, who turned 80 years old in May, is worth about $2.4 billion thanks in large part to his unrelenting buy-and-hold approach.
Forbes listed some of his notable winners, including IPO purchases of Apple
and a big enough position in Heico
to make him the company’s biggest stakeholder. He also has weighty positions in GE
and Bank of America
Wertheim derives his investment funds primarily through BPI, a manufacturer of optical tints born of his inventions.Today, the company earns about $10 million a year, much of which he plugs right back into stocks.
“I didn’t want to have a big business,” he told Forbes. “But today, I have a 5 or a 6 or an 8 billion-dollar corporation, each of which I own 10% of.”
Wertheim says he doesn’t get too bogged down in financial statements, but he does spend 12 hours a week diving deep into companies’ “intellectual capital.” That’s led him to load up the likes of IBM
He sounds a lot like Berkshire Hathaway’s
Warren Buffett when he gets to talking about his approach.
“If you like something at $13 a share, you should like it at $12, $11 or $10 a share,” he said. “If a stock continues to go down, and you believe in it and did your research, then you buy more. You are actually getting a better deal.”
His goal: Never sell.
Still, he says he’s been known to unload a stock when it gets caught in a downward spiral, like BlackBerry
. “I watched substantial profits disappear month after month until I decided enough was enough,” he recalled.
Granted, his numbers may be bigger than small-timers can wrap their brains around, but there’s a lot to learn from his patient and committed approach regardless. Forbes used this chart to illustrate how adding $200 a month to an initial $10,000 investment in the stock market would have returned $11 million over the past 61 years.
Meanwhile, Wertheim has to be enjoying what he’s seeing lately. Stocks rallied hard in June and the Dow Jones Industrial Average
is starting the second half of the year off with a bang.
Then again, he probably doesn’t pay too much attention to day-to-day market fluctuations, especially at this point in his life.
“My thing is,” Wertheim told Forbes, “I wanted to be able to have free time. To me, having time is the most precious thing.”