Getty Oil compounded at 15% for 50 years.

In 1957, Fortune magazine named Getty Oil’s founder, J. Paul Getty, “the wealthiest living American.” In 1966, the Guinness Book of Records declared him “the world’s wealthiest private citizen.”

Were these claims true?

It’s hard to verify with precision, but Getty was a billionaire and is still considered one of the wealthiest Americans to ever live.

Interestingly, Getty wrote a book on business and investing titled How to Be Rich. It’s a bit dry, and some of the material now feels like common knowledge given the abundance of high-quality business content available today. Still, it’s an interesting read.

One section, in particular, stands out, the chapter on buying common stocks.

Getty was a shrewd financial operator who invested through the Great Depression. More importantly, he wasn’t a typical Wall Street speculator of the era. He bought and held stocks throughout the turbulence of the 1930s.

Here’s his advice:

“It is possible to make money-and a great deal of money-in the stock market. But it can't be done overnight or by haphazard buying and selling. The big profits go to the intelligent, careful and patient investor, not to the reckless and overeager speculator. Conversely, it is the speculator who suffers the losses when the market takes a sudden downturn. The seasoned investor buys his stocks when they are priced low, holds them for the long-pull rise and takes in-between dips and slumps in his stride.”

Getty explains that he learned this principle from an old Wall Street pro, who advised: “Bank on the trends and don’t worry about the tremors. Focus on long-term cycles and ignore sporadic ups and downs.”

This may sound obvious today, but in the 1920s and 30s, most stock pickers were focused on speculation, not long-term investing.

“I began buying common stocks at the depths of the Depression. Prices were at their lowest, and there weren't many stock buyers around. Most people with money to invest were unable to see the forest of potential profit for the multitudinous trees of their largely baseless fears. I had confidence in the future of the American economy and realized that the shares of many entirely sound companies with fine potentials were selling at only a fraction of their true worth.”

Getty illustrates this with two investments from that period.

The first, Tide Water Associated Oil Company, was purchased in 1932 for as little as $2.12 per share. By 1937, it traded at $20.83.

The second was Petroleum Corporation. Getty initially bought 10,000 shares at $3.45 and continued accumulating through 1933. By then, he owned 190,000 shares worth nearly $15 each. His average cost? $6.54 per share.

Getty then reveals his “secret” to successful investing:

“Sound stocks, purchased for investment when their prices are low and held for the long pull, are very likely to produce high profits through dividends and increases in value.”

Bad investors panic during corrections and crashes. They lose sight of long-term objectives because of short-term volatility. Meanwhile, some of the greatest investors of all time, including Warren Buffett and J. Paul Getty, treat sell-offs as opportunities.

It’s a strategy that feels scary as waves of negative news cascade in, but proves profitable once temporary fears fade.

Knowing what the market did is easy. Understanding why it moved is the hard part.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.