4 minutes reading time (798 words)

Interview with Mark Higgins on Hetty Green, The First Queen of Wall Street


Deep within America's financial history exists a figure whose skills and accomplishments remain vastly overlooked. Henrietta "Hetty" Howland Robinson Green is considered the Queen of Wall Street, a title fitting for such a prominent women in finance and talented investor whose legacy transcends the confines of gender bias and societal norms.

Hetty Green was a skilled investor during the late 1800s, early 1900s, a period known as the Gilded Age. During this era, when speculation was a prevalent approach to engaging in financial markets, she made fortunes and avoided the pitfalls the Panics that struck Wall Street caused that many others lost everything to.

Financial historian, author, and speaker Mark Higgins, CFA, CFP, has immersed himself in the full 234-year financial history of the United States and considers Hetty Green to be the best investor in all of U.S. History. In time for Women's History Month, Garden State Woman spoke with Higgins and learned more about Hetty Green's overlooked reign as Queen of Wall Street.

Q: What distinguishes Hetty Green from other investors of her time, particularly during the Gilded Age?

A: Before explaining why Hetty Green stood out, it is important to understand how Wall Street operated during the Gilded Age. For the most part, market manipulation and insider trading were legal at the time. Therefore, the most prominent figures on Wall Street (e.g., Daniel Drew, Jim Fisk, and Jay Gould) made their fortunes through nefarious means. In my book, I refer to these tactics as the "Gilded Age Dark Arts." Hetty Green was different, however, in that she relied only on securities analysis (i.e., buying low and selling high) to guide her investments. Success required intense due diligence, skepticism, discipline, and patience. These virtues are rare during any era, but they were especially rare during the Gilded Age – if only because the Gilded Age Dark Arts provided a more reliable way to outmaneuver the market.

Q: In what ways did Hetty Green demonstrate her ability to foresee and profit from financial crises, such as the Panics of 1873, 1884, 1893, and 1907?

A: Four prominent attributes of Hetty's personality helped her navigate crises, which often ruined her peers. First, she practiced thrift during a time when showcasing one's wealth was the norm. This proved especially valuable during panics, as she hardly needed any cash to pay her living expenses, and she could use it to buy undervalued securities instead. Second, she was exceptionally patient, which is a discipline she acquired while working with her father in the whaling industry in New Bedford, MA. This is an important point that was never really raised in her biographies. Whaling ventures took an average of 3.6 years to return to port, so investors in these ventures were naturally forced to exercise patience. In contrast, many Wall Street speculators were seeking instant riches. Third, Hetty Green never used debt to finance her investments. Countless men were ruined on Wall Street when they leveraged their investments with debt and were subsequently bankrupted in the inevitable crashes. Finally, she often served as a lender of last resort during crises, which trained her to sense the ebbs and flows of the monetary currents. This proved especially valuable during the Panic of 1907. Hetty foresaw the risks not only to the entire system, but specifically at the Knickerbocker Trust, which was ground zero for the bank runs.

Q: Despite facing significant obstacles due to gender discrimination, how did Hetty Green manage to navigate the male-dominated financial industry of her time?

A: She outperformed men by (a) relying on securities analysis (rather than market manipulation and insider trading); (b) living well below her means rather than splurging on excesses that were typical during the Gilded Age; (c) avoiding the use of leverage; and (d) developing an uncanny sense of the ebbs and flows of the monetary currents. All these tactics are impressive in any time period, but they were especially impressive during the Gilded Age.

Q: What can readers expect from your book, Investing in U.S. Financial History?

A: After immersing myself for four years in the financial history of this country, I discovered that the past is, in many ways, a mirror of the future. This being the case, I believe investors can improve their financial decisions by supplementing their personal experience with the wisdom of our ancestors. If readers' experience is similar to my experience while researching the financial history of this country, they will find the present is much less mysterious and the future is less frightening. That is the most powerful gift that I received from studying our ancestors, and I hope this book shares this wisdom with everybody who reads it.

You can purchase Mark Higgins' book, Investing in U.S. Financial History here.

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Monday, 17 June 2024

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