Author Topic: An Optometrist Who Beat The Odds To Become A Billionaire  (Read 1236 times)

FireLane

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An Optometrist Who Beat The Odds To Become A Billionaire
« on: February 25, 2019, 06:55:31 PM »
I haven't seen any discussion of this interesting and thoroughly Mustachian story. It's a profile of Dr. Herbert Wertheim, a Florida opthalmologist and small business owner who quietly became a billionaire over a lifetime of patient buy-and-hold investing:

https://www.forbes.com/sites/maddieberg/2019/02/19/the-greatest-investor-youve-never-heard-of-an-optometrist-who-beat-the-odds-to-become-a-billionaire/

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If it weren’t for his trademark bright-red fedora, Wertheim, who is an optometrist and small businessman, would look like the typical senior living it up in South Florida.

But Wertheim, 79, has no need for early-bird specials. What the photos don’t reveal is that Dr. Herbie, as he is known to friends, is a self-made billionaire worth $2.3 billion by Forbes’ reckoning—not including the $100 million he has donated to Florida’s public universities. His fortune comes not from some flash of entrepreneurial brilliance or dogged devotion to career, but from a lifetime of prudent do-it-yourself buy-and-hold investing.

He's been an investor his whole life, going back to 1956, when he joined the Navy at 18 and started buying stocks with his first paycheck. After becoming a doctor, he started a small but profitable business which makes chemical tints for eyeglass lenses, and kept plowing the profits back into his investments:

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With BPI cash flowing into Wertheim’s brokerage account, he went to work buying stocks and honing a strategy that can best be described as a mix of Warren Buffett and Peter Lynch, with a touch of Jack Bogle, given that he dislikes fees and primarily uses two discounters, Fidelity and Schwab, to manage his massive portfolio.

He hasn't been a strictly passive investor, though I guess we can excuse that since there were no index funds when he started out. Instead, he's been a Warren Buffett-style stock picker, investing in companies that he felt were undervalued or had promising technology coming to market. Apparently, he's good at it:

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Wertheim points to Microsoft, a stock he has held since its IPO in 1986. “I knew a lot about computers and had been involved in building them,” he says. BPI had been using Apple IIe’s, but after Microsoft released its Windows operating system in 1985, Wertheim became convinced it would be a winner. “Only Microsoft had an operating system that could compete with Apple,” he recalls. The Microsoft shares he bought during the IPO, which have been paying dividends since 2003, are now worth more than $160 million. His 1.25 million shares of Apple, some purchased during its 1980 IPO and some when the stock was languishing at $10 in the 1990s, are worth $195 million.

I like that he's taken the Giving Pledge to donate his fortune, mostly to public education. I think most of us would have called it quits sometime before becoming as rich as he did, but it goes to show what's possible when you follow Mustachian principles and trust the market.

FIPurpose

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Re: An Optometrist Who Beat The Odds To Become A Billionaire
« Reply #1 on: February 25, 2019, 07:21:39 PM »
This guy sounds awesome. Seems like he'd be a fun guy to play tennis or cards with.

RWD

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Re: An Optometrist Who Beat The Odds To Become A Billionaire
« Reply #2 on: February 25, 2019, 08:51:07 PM »
Wow, that is really impressive!

Playing around with a calculator it looks like he needed to invest around $2 million per year (in 2019 dollars) to hit that number.

jengod

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Re: An Optometrist Who Beat The Odds To Become A Billionaire
« Reply #3 on: February 26, 2019, 06:13:17 PM »
Thank you for sharing. What a great example!