About 10 years ago, Forbes Magazine ran an article about an "accidental billionaire" named Franklin Otis Booth Jr.
In the early 1960s, Booth tried to buy a printing company that contracted with The Los Angeles Times. The deal fell through, but he became good friends with the lawyer working on the case.
After discovering they had similar investment philosophies, they partnered up to build a 40-unit condo complex in Pasadena, Calif. -- and managed to double their money in just two years.
Booth decided he wasn't up for pursuing further real estate development, but he did agree to put $1 million into an investment partnership the lawyer put together. Thirty-five years later his stake was worth $1.2 billion.
The cynics and risk-takers among you will undoubtedly chalk Booth's success up to "luck."
Granted, his is a case of being in the right place at the right time, but the actual process that grew his fortune had very little to do with luck.
He didn't dump his money into penny stocks that took off. He didn't get in on the ground floor of Oracle (Nasdaq: ORCL) or IBM (NYSE: IBM). He didn't make smart options trades.
What he did do was hand his $1 million over to that lawyer and a "clever young fellow." They, in turn, made big bets on unexciting businesses with wide moats that were selling at a discount to their fair value. These businesses all had strong brands, outstanding returns on capital, consistent or improving profit margins, and substantial cash profits.
That's all -- big bets on great companies selling at good prices.
Of course, by now I'm sure you know that the lawyer was Charlie Munger and the clever young fellow he teamed up with was none other than Warren Buffett.
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The Accidental Billionaire
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