“The Wizard of Finance” Could Teach All Investors a Lesson
Women’s history month’s origins can be traced back to 1981 when Congress passed a resolution that designated the week of March 7, 1982, as “Women’s History Week.” It was requested of President Reagan to issue a proclamation “calling upon the people of the United States to observe such week with appropriate ceremonies and activities.” Following this, Congress passed resolutions yearly for the next five years to designate one week in March as “Women’s History Week.” In 1987, Congress passed a resolution officially making the month of March “Women’s History Month.”
The proclamations made in the 80s were made to celebrate the efforts and contributions that have been made to the U.S. and to applaud the amazing achievements made by women throughout the country’s history.
The Wizard of Finance – Hetty Green
Henrietta Howland Robinson, or Hetty, was born in New Bedford, Massachusetts in 1834. At a young age, Hetty was sent to live with her grandfather. Because of his poor eyesight, she learned to read the stock quotes and commerce reports to him at a very young age. By the time she reached age thirteen Hetty had become the family’s bookkeeper.
After her father’s death in 1865, Hetty was left a large inheritance. It included a trust fund from which she received income but didn’t control the principal. In the same year, her aunt died as well leaving Hetty yet another sizable inheritance. Similarly, she received a trust fund for which she received income but didn’t control the principal.
Hetty challenged the will’s validity in the Robinson v. Mandell case. She claimed the whole estate was meant to be hers’s as evidenced by an earlier will made in 1862. After a five-year-long legal battle, Hetty reached a $600,000 settlement (it would be worth over $12 mill. today).
Hetty’s Investing Philosophy
Hetty Green, nicknamed the Witch of Wall Street, invested her trust fund’s interest buying civil war bonds, which had a higher return than gold and were supported by railroad stocks. Her philosophy when it came to investing could be described as “deep-value.” Yet, it is better to describe her philosophy as “contrarian.”
These are a few quotes from Hetty that describe how she invested:
- “I buy when things are low and nobody wants them. I keep them until they go up and people are crazy to get them. That is, I believe, the secret of all successful business.”
- “Before deciding on an investment, I seek out every kind of information about it.”
Hetty Green’s Thriftiness
Hetty was notoriously an extremely thrifty person. It was rumored she never used her heat or hot water. Also that she only wore one black dress and black undergarments that didn’t show wear as easily, so they could be worn until they were unusable. Her frugality made sense to her, but the reputation that came from it wasn’t very pleasant. Hetty didn’t seem to care what others thought as she responded, “just because I dress plainly and do not spend a fortune on my gowns, they say I am cranky or insane.”
Perhaps her frugality helped her in business because as a businesswoman she was extremely successful. She mostly dealt in real estate, mines, and railroads. She also lent her money. Notably, the City of New York took loans from her to keep NYC solvent on multiple occasions. During the Panic of 1907, Hetty wrote the city of check for $1.1 mill in exchange for short-term revenue bonds. At one time Hetty was NYC’s largest lender, but in line with her frugality, she moved to Hoboken, New Jersey due to New York’s high property taxes.
Hetty Green’s Frugality
Sadly, Hetty passed away on July 3, 1916, at the age of 81. By the time of her passing, Hetty had accrued a large number of accolades such as:
- “The World’s Greatest Miser” from the Guinness Book of World Records
- “The Wizard of Finance”
- “The Richest Woman in America”
Her net worth is estimated to range from $100 million to $200 million (around $2.5 billion to $4.5 billion today). Hetty also held strong beliefs regarding women and finances. A few quotes from her:
- “It is the duty of every woman, I believe, to learn to take care of her own business affairs.”
- “A girl should be brought up as to be able to make her own living.”
- “Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates.”
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