Hedge funds are a unique and often misunderstood part of the financial world, known for their sophisticated investment strategies and the allure of
18 October, 2023
That investors can also be eccentric is proven by Herbert Wertheim. With his striking red hat, he quickly claims all the attention. But who is this rather unknown investor and what makes him so special?
Who is Herbert Wertheim?
Herbert Wertheim was born in 1939, in Philadelphia, and built his fortune without help from wealthy parents. That not everything came naturally shows his eventful childhood. His parents fled from Nazi Germany to the United States, where Herbert was thus born. He was dyslexic and truant, and at home he was abused by his father, as a result of which Herbert decided to run away from home (temporarily). As punishment for truancy, he had to choose between the navy and disciplinary school, eventually choosing to join the navy at the age of 17. He then decided to join naval aviation, which had a major impact on his subsequent career. While in the navy, Herbert’s self-confidence grew and he became very ambitious. He was the smartest in his class and so
“They give you tests all the time to see how smart you are, and out of 135 in our class, I think I was in the top-especially in the areas of mechanics and organisation.”
He decided to combine the navy with two studies: physics and chemistry. In addition, this period was during the Cold War where aerospace stocks soared. Herbert used his knowledge gained from the navy to buy his first stock: Lear Jet.
After the navy, he decided to become an Optometrist and opened a private business, where he continued to work for 12 years. At the same time, he developed a chemical neutraliser that could return your tinted lenses to their original colour. This earned him the money he later started investing seriously (FBS, 2020).
What makes Wertheim unique as an investor?
Like Warren Buffett, Wertheim emphasizes that you should only invest for the long term and in companies you understand. In addition, Mr Wertheim looks for companies with strong management and prefers those that pay regular dividends.
Thanks to his technical background, he managed to invest in Apple, Microsoft and aircraft component developer Heico during their IPO. His investment in Heico grew his wealth the most, an initial $5 million stake having grown to over $900 million.
What makes Wertheim unique as an investor is that he is particularly focused on the patents a company holds. This is one of the reasons for buying shares in Heico, as well as Intel, IBM and 3M.
“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.”
An extraordinary outlook on life
The fact that Herbert Wertheim is so lucky is due to several things. Although he has been investing in stocks since his 18th birthday, achieving financial success was never his end goal. By his own admission, he has always strived simply to have more free time. He even calls free time “the most precious thing there is.”
In addition, Mr Wertheim is convinced that you should use your wealth for positive purposes. “Making life on earth better” is therefore his life motto. This is especially reflected in the foundation he set up with his wife Nicole Wertheim. Through this foundation, the couple has made large donations mainly to universities. For instance, he made a donation of a whopping $50 million to the University of Florida. This astronomical amount was used for the construction of an engineering innovation building, among other things. He also gives away money to students in the form of scholarships and regularly works with Warren Buffett and Bill Gates to raise money for good causes (My Money Planet, nd).
In conclusion, what can we learn from Herbert Wertheim?
First, it is important to always remain optimistic. Even though Herbert Wertheim had a difficult childhood, he continued to believe in a better future.
Next, the advice is to start investing as young as possible. Because he started investing at a relatively young age, he was able to benefit from compound interest, which allowed his wealth to soar to great heights later in life.
It is also important to gain as much knowledge and experience as possible. Through the knowledge Herbert gained in the navy and thanks to his studies, he gained knowledge that was essential to his success as an investor and entrepreneur.
And of course: sharing does not make anyone poor. Finally, the lesson that most typifies Herbert Wertheim. Wealth represents much less if you keep it to yourself. Through his foundation, Herbert managed to make a big impact on many people (Forbes, 2019)
