Hetty Green: The Witch of Wall Street [Outliers]

What It Covers

Hetty Green built a $2.5 billion fortune (inflation-adjusted) in the 1800s using value investing strategies a century before Warren Buffett, operating from a bank lobby while facing gender discrimination on Wall Street.

Key Questions Answered

• •Crisis investing: Hetty maintained massive cash reserves and bought distressed assets during panics when others sold desperately. During the 1907 crisis, she kept $1 million cash daily on her desk and loaned $6 million at fair rates while others charged usurious interest.
• •Information advantage: Before any investment, she conducted obsessive research including hiring people with grudges to reveal hidden flaws, inspecting railroad yards personally, and talking to workers. This detective work gave her edges in an era without SEC regulations or standardized accounting.
• •Position over prediction: She never borrowed money or bought on margin, keeping her entire fortune liquid. This positioning allowed her to purchase entire towns at auction and lend millions when credit disappeared, making even smart people look foolish when overleveraged.
• •Contrarian timing: She bought post-Civil War government bonds at 50 cents on the dollar when others feared depreciation, then held for years until the government honored them in gold. Her rule: buy when nobody wants assets, sell when people go crazy for them.