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July 6, 2019, 11:50 a.m. EDT

One small-business man rode this Warren Buffett-inspired strategy to billions

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By Shawn Langlois, MarketWatch


wertheim.org
Warren Buffett and Herb Wertheim

‘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 home runs, including IPO purchases of Apple /zigman2/quotes/202934861/composite AAPL +1.57% and Microsoft /zigman2/quotes/207732364/composite MSFT +2.41% and a big enough position in Heico /zigman2/quotes/207361354/composite HEI +0.66% to make him the company’s biggest stakeholder.

He also has weighty positions in GE /zigman2/quotes/208495069/composite GE -1.57%  , Alphabet /zigman2/quotes/205453964/composite GOOG +2.40%  , BP /zigman2/quotes/207305210/composite BP +0.87% and Bank of America /zigman2/quotes/200894270/composite BAC -2.17%  .

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 crunching financial statements, but he does spend 12 hours a week diving deep into companies’ “intellectual capital.” That has led him to load up on the likes of IBM /zigman2/quotes/203856914/composite IBM +0.22%  , 3M /zigman2/quotes/205029460/composite MMM +0.61% and Intel /zigman2/quotes/203649727/composite INTC +0.46%  .

He sounds a lot like Berkshire Hathaway’s /zigman2/quotes/208872451/composite BRK.A +0.33% 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 /zigman2/quotes/202784246/composite BB +3.78% . “I watched substantial profits disappear month after month until I decided enough was enough,” he recalled.

Granted, his numbers may be bigger than most can wrap their brains around, but there’s still a lot to learn from his patient and committed approach. 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 /zigman2/quotes/210598065/realtime DJIA +0.52% is starting the second half of the year off with a bang.

Read: S&P hits intraday record as U.S.-China trade truce fuels buying

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.”

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$ 320,601
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N/A
Market Cap
$508.74 billion
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/zigman2/quotes/202784246/composite
US : U.S.: NYSE
$ 4.94
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P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.65 billion
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Shawn Langlois is an editor and writer for MarketWatch in Los Angeles. Follow him on Twitter @slangwise.

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