The Best Investor of All-Time You Never Heard of

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Chances are, you never heard of Dr. Herbert Wertheim. And why would you? He's an optometrist who lives in Florida. And he's 79 years old. Not that there's anything wrong with being old, but if you haven't heard of him by now, let's be real you most likely never would have.

Except, he recently burst onto the scene when he was first featured in an article on Forbes back in February earlier this year.

He didn't make it to Forbes because he was some slick, lucky hedge-fund manager that took a huge bet on something that paid off.

He was just a regular guy from humble beginnings.

He didn't really seem to have a knack for anything when he was younger. He even got into a bit of trouble getting accused of truancy (skipping school) by his parents. Instead of being severely punished in court, he was given the offer to either join the U.S. Navy or the state reformatory (prison).

Wertheim chose the Navy and it was all blue skies from there.

When he arrived, he was presented with all sorts of tests he was required to take. That's where he says his life changed. He recalls out of about 135 people, he was ranked in the top in all tests, mechanics and organization in particular.

This is when Wertheim began gaining confidence in himself. He decided to study physics and chemistry while in the Navy. Around this time he began investing in the stock market. He made his first investment at the age of 18 using his stipend he received from the Navy in a company called Lear Jet that made aviation products during World War II.

Getting a glimpse at Wortheim's religious attitude towards investing, he told Forbes, “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.”

 

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After he got out of the Navy, he attended Brevard Community College and then the University of Florida to study engineering, but didn't end up graduating. Finally, in 1963 he ended up at Southern College of Optometry, graduated and opened up a practice in South Florida. The interest in lenses began from his days at the University of Florida where he also worked for NASA in its early years in a department that worked on improving instrumentation for manned flights.

Long story short, he eventually created a company of his own called Brain Power, Inc. in 1970. It became a massive success once he realized he had created one of the first neutralizers for lenses, meaning you could restore lenses back to their clear state, instead of carrying around lenses of different colors or throw out the ones that weren't the right ones.

He bet this would become a huge hit, and he was right. Clients included Polaroid and Bausch & Lomb. To date, the company has $25m in revenue along with over 100 patents and copyrights in optics.

 

Long-Term Investing Strategy

Since Wertheim was raking in all this cash, he needed a place to put it.  With his success in his company, coupled with his devotion to investing in the stock market, he made the most of his opportunity.

He likes to think of himself as a little bit of Warren Buffett and a little bit of Peter Lynch and Jack Bogle.  Wertheim only likes to invest in what he knows.  He understood the business of Lear Jet and invested.

In the Forbes article, you can see he has also invested in Intel, 3M, Microsoft and Apple.

 

Investment principles to follow according to Herbert Wertheim:

• Start a side hustle to use the cash to invest in the stock market
• Invest in what you know
• Look at the patents of the companies you're interested in
• Go all-in when a company's stock goes down if you've done your research
• Buy stock in a company and almost never sell
• Use the dividends to live off of once you determine what's enough for you or invest in new companies

 

Wertheim makes note of his knowledge of computers to know it was a good bet to invest in Microsoft and Apple after their IPOs.  His company was using the Apple IIs and he really liked their operating system.  When Microsoft came out with their Windows operating system in 1985, he knew it would be a good bet to think it would be able to compete with Apple's OS.

 

 

 

His position in Microsoft is now worth more than $160 million.  His investment in Apple is worth $195 million.  He even invested in Apple during the 90s and early 2000s can you even imagine?  Unreal.

I'll admit so far in the blog I haven't included looking at patents as a primary focus when researching stocks because I thought it might be too in-depth, but I do this as well for technology companies.  Even though most patents don't come to fruition until several years later if at all, it's still good to see the company is innovating and has lots of intellectual property.

This is why I never listen to critics of Apple.  Most of that is self-serving click bait anyway.  For example just today an analyst gave Apple a downgrade from a hold to sell position because of weakening smartphone revenue.

But that's stupid.  Smartphones have been on the decline for years.  Do the research on the company's IP and patents.  Know the ins and outs of the culture and leadership and direction of the company you're interested in and you'll be fine.

It's worked perfectly well for Herbert Wertheim since his net worth is a reported $2.3 billion.  If he can become a billionaire, there's no reason you can't become a multimillionaire.