Good morning my dear readers,

While we have seen the movie - 'The Wolf of Wall Street', there is a significantly better story of a lady, who was so brilliant but also so infamously 'Kanjoos' / 'Stingy' & 'Ruthless' that she earned the infamous nickname of being 'The Witch of Wall Street'.

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The beginning:

Unlike most great stories, which are generally 'Rags to Riches', Hetty Green started with decent money which was earned via inheritance.

Her family had earned well via the Whaling industry.

Whaling is the hunting of whales for their usable products such as meat and blubber, which can be turned into a type of oil that became increasingly important in the Industrial Revolution. It was practiced as an organized industry as early as 875 AD.

(125-250 years ago, it were times of plenty and simpler times, I don't think a lot of these people realised they were in the business of cruelty).

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Her own brilliance:

Make no mistake, she was absolutely brilliant as a business woman. Especially in a time when women had no rights whatsoever.

Women were oppressed, not taken seriously back in 1900s.

(Can be argued, it's even the case today, but was significantly more so a 125yrs ago).

In such a demanding 'Men' dominated environment, her legend grew and she ended up as the 'Richest Woman in the World' with a net worth between $3 - $4 Billion, back in 1900.

(This is a serious amount Wealth for 1900, I believe she would have been in the top 5 richest people in the world too).

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What did she do?

Simplicity, Long Term Vision and 'Never Selling' core assets.

1- Real Estate: In the late 1800's, as cities like New York and Chicago were rising, she saw this clearly and start acquiring real estate properties and put them on rent at significant yields.

(She never sold these holdings).

2- Stocks & Bonds: No Technical Analysis, Trading, Leverage or even likeness for the stock market.

Whenever there was a market crash (likely more than -15-20%), she would suddenly appear and buy Blue Chip stocks aggressively.

She would wait a few years and then sell out everything in Bullish markets.

(It was a very basic yet, a very profitable way of investing for someone who wasn't a stock market person).

3- Railroads: Hetty Green also invested in railroads, which were one of the major industries of the late 1800s.

She would buy when companies were distressed and sell them later at a profit.

She was also known for providing loans to struggling railroad companies, often securing the loans with the companies' assets, which she would acquire if they defaulted.

(Well what do you, she was a real life 'Special Situations' expert herself!).

😁

4- Loans: Green was known to have made personal loans with high interest rates, which brought her significant income.

She acted as a lender during times when banks were not willing to extend credit, securing these loans with collateral to reduce her risk.

Conclusion:

I think she understood a few concepts very well and executed them with aplomb.

*Buying Real Estate during the rise of the USA, then also never selling, ever.

*Buying Stocks in times of corrections only and holding for many years.

*Lending only to Railway companies as she understood that sector well and then also having the guts to buy out those companies if they defaulted.

(As I keep saying, invest heavily in what you understand best).

*Lending with high collateral, ruthlessly.

(How many of us have lent to people in their time of need and never ended up getting back any money?, well not her. No emotions. She would take collateral and happily lend. She made a fortune via lending, how it's supposed to be).

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That's all for today folks.

Lately, I have been very intrigued to learn about historically important investors and that's how I came across this super important but unheard off name.

There are seriously important takeaways from Hetty Green's story for all of us as I have summarised above.

Most important, do simple things well but bet heavily when the time is right.

Until next time, stay safe and enjoy the simpler things in life.

My Best,

Neil Bahal

Founder

Negen Capital

Ps- I will update about our latest startup deals in coming newsletters. Latest being from the Housing Finance space.