Lessons From The Investing Journey Of Optometrist Billionaire Herbert Wertheim

Herbert Wertheim is probably the last person anyone expected to be on the Forbes’ Billionaires list.  He is an optometrist and an inventor. But he became a billionaire by carefully buying and holding stocks for the long term.


Forbes has a long profile on the 79-year old.  It was an eye-opening article for me on many fronts. His success shows that anyone can acquire vast sums of money without any specialized knowledge of investing.

Lessons From Herbert Waldheim’s Investing Success

His Goal Was Free Time, Not More Money

Wertheim wasn’t fixated on making money alone. Though Wertheim enjoyed picking stocks, his goal was to make enough money so that he can have free time.  He says, “I wanted to be able to have free time. To me, having time is the most precious thing.”

Wertheim started investing early

Investing early allowed plenty of time for his investments to compound. Wertheim joined the Navy when he was 17, and started investing at 18.  Warren Buffet has also talked about investing in stocks when he was in his early teens and why that’s important.  Wertheim is 79 today, and his money has compounded for 61 years.  That’s the magic of investing early.

Investing in What You Know

Because Wertheim worked in the Navy, his early investment was in Lear Jet.  He was not interested in reading financial statements. He was interested in learning about a company’s patent portfolio and intellectual property. Since he himself owned patents, that was an area he was very curious about. That took him to 3M, IBM, and Intel.

Buy And Hold Forever

Similar to Warren Buffet’s approach, Wertheim buys a stock and holds it forever.  Short term fluctuation didn’t bother him.  In fact, if the stock fell, he would buy more.

No Mutual Funds

While it’s true that mutual funds weren’t around when Wertheim started investing, he liked to build a portfolio of stocks.  Indices tend to deliver average performance, whereas a well-built portfolio delivers outsized returns.

Focus on Technology Stocks

Since Wertheim was an inventor and had a particular interest in technology, it’s no surprise that he was attracted to technology stocks when most investors weren’t paying much attention in the 1970s.

Focus on Dividend Paying Stocks

He loved dividend-paying stocks.  Dividend-paying stocks provide a cushion in case the stock moves sideways or moves down.  He used the cash flows from dividend-paying stocks to make other investments.  He seldom reinvested dividends in the same stocks.

Keep Costs Low

Wertheim traded his stocks in discount brokerage accounts at Charles Schwab and Fidelity. Though he wasn’t an active trader, he realized the importance of keeping his expenses low.

One Stock Provided Disproportionately High Return

His $5 million investment in Heico is now worth $800 million after 28 years. That’s an annual return of about 20%.  Though we all want to have a diversified portfolio, people who made it big had one stock or investment that paid off big.

He Never Quit Working

Though his company BPI was relatively small with just 49 employees, and annual revenues of $25 million, he continued to work.  His work at BPI kept him busy and served to satisfy his intellectual curiosity.

Luck Helps

An element of luck always is necessary to be successful, even if you have all the other ingredients. Wertheim was lucky to catch the technology wave early by investing in Microsoft, Apple, and IBM.

Do you have a portfolio of stocks that you intend to hold for a long time? What’s in your portfolio?



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