Post #5 From WWII to riches, the story of Herbie Wertheim

Everyone knows Warren Buffett but only few have heard about the gentleman wearing bright red fedora in the picture above. His achievements are nevertheless astounding: From being a dyslexic struggling kid in school to a self made billionaire with a current net-worth of around 4 Billion dollars.

He made his fortune over five decades of "buy-and-hold" investing in stocks. However much the end result may look like a linear progression, the journey is seldom so straightforward and his is full of riveting twists and turns.

The childhood

Herbert Wertheim or "Herbie" was born in Philadelphia in 1939. 1939 marked the start of the Second World War, the largest and deadliest conflict in human history. His parents, Jewish immigrants who fled Nazi Germany post the war, moved to Florida and ran a small bakery.

As a child, Wertheim, a dyslexic, struggled in school, wasn't a great fan of classes and skipped them often. Due to troubles at home he ran away, finding work picking oranges in Florida and living with the Seminole Indians.

At age 16 he stood in front of a judge facing truancy charges. He had a choice between the U.S. Navy and state reformatory. Wertheim chose to Navy and was enlisted when he was only 17.

The Metamorphosis

Navy turned him into a confident young man. He started studying chemistry, physics and other sciences with great interest before working in naval aviation. This was the time the stock market bug bit him. Cold war was in full motion, still the stock market was recovering from 1929 lows and aerospace stocks were leading the market. Using his stipend, he made his first investment in Lear Jet.

Once out of the Navy, he did odd jobs, attended the University of Florida, and even worked for NASA. Eventually, he found his passion in optometry and founded Brain Power Inc. (BPI) - tinkering, developing tints, dyes and other technologies for eyewear. The company slowly became profitable and started providing gunpowder for his stock market picks which would eventually make him a billionaire.

The above quote is a powerful mental model for investing. A person with a small but continuous supply of capital and the right temperament for stock markets can become enormously rich and wiser given enough time.

The Stocks

Similar to Peter Lynch, he followed "invest in what you know" with his heart and dedication. And, he knew technology, research & development, chemistry, aviation.

He bought Microsoft at its IPO in 1986, a stock he has held since earning him a price appreciation of 238,070.00% unadjusted for dividends. His Apple stocks also purchased at IPO now stands at a net worth of hundreds of millions of dollars.

Thanks to his technical background from optometry, he invested in IBM, 3M and Intel based on their patent portfolio strength. He invested in Heico, a Florida based aerospace and electronics company based on expertise gained from his Navy days. The stock, which he purchased at less than a dollar per share is currently valued at $150 per share.

He had some setbacks too, like investing in Blackberry in its golden days or getting margin called when Volcker raised federal fund rates to 20% in the late seventies. But in investing, you have to lose many a battle to win the war and these setbacks never came in way to success.

The Lesson

• Use your knowledge and experience as your edge. Everyone has their edge based on education, work, interest which can prove to be very advantageous as an investor.

• Buy and Hold may seem boring but is a rock solid way to create tremendous wealth assuming you can wither the temporary setbacks and stay course.

• An external source of capital albeit small when invested correctly in equities can create astronomical returns over long periods of time.

• Live a rich life, let diverse experiences shape you, stay happy and invested.

That's all for now! Take care ❤️