ζ He Broke the #1 Rule of Investing and Made $4 Billion
A man who ran a struggling welding supply company turned it into $4 billion.
In 1980, Stewart Horejsi bought stock in Warren Buffett’s Berkshire Hathaway and kept buying for years. By the end of 2025, his 5,800 shares were worth over $4 billion.
He broke the first rule everyone learns: don’t put all your eggs in one basket.
The same move wiped out thousands of Enron employees. One assistant lost her job and $150,000 in company stock when it collapsed.
Same bet. Opposite ending.
The difference wasn’t luck or genius. It was structure.
In “Concentrated Wealth in Behavioral Portfolios,” Santa Clara finance professor Meir Statman explains it through behavioral portfolio theory, the framework he introduced with Hersh Shefrin in 2000. Every portfolio has two layers.
A not-poor layer: the floor that keeps you safe. A be-rich layer: the swing at the life you actually want.
Concentration belongs only in the be-rich layer, and only when the floor survives you being completely wrong. Horejsi had that floor. The Enron workers bet the floor itself.
Statman’s point isn’t “go all in.” It’s the opposite. Concentration is a tool, powerful and dangerous, and whether it builds you or breaks you depends entirely on which layer you’re betting from.
