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all of History's Greatest entrepreneurs studied History's Greatest entrepreneurs Heddy green was the smartest woman on Wall Street she was a financial genius and the single largest individual Finance year in the world and yet she
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made it a point to learn from people like cornelus Vanderbilt Andrew Carnegie Rockefeller JP Morgan and J gold and one thing that she had in common with them was that she had the habit of keeping track of every cent and making sure that
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she's getting the most value for every single dollar that she spent one thing is clear from studying hundreds of History's Greatest entrepreneurs anyone who's committed to being great at building their business is obsessed with watching their cost this is something I was talking about with my friend Eric my friend Eric is the co-founder and CEO of ramp ramp is now the presenting sponsor of this podcast I've gotten to know all
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the co-founders of ramp and I've spent a bunch of time with them over the last year or two they all listened to the podcast and they all picked up on the fact that the main theme from the podcast is on the importance of watching your costs and controlling your spend and how doing so gives you a massive competitive advantage and that is the reason that ramp exists ramp gives you everything you need to control your
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spend ramp exists to give you everything you need to make cost control an obsession ramp gives you easy to use corporate cards for your entire team automated expense reporting and cost control ramp helps you run an efficient organization I read a ramp customer review that sums this up perfectly it said ramp is like having a teammate who you never need to check in on because they have it handled Warren Buffett who has a lot in common with Hy
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green said that a good manager must be a demon on cost ramp makes it easy for you to be a demon on cost and make your business more efficient ramp's website is incredible make History's Greatest entrepreneurs Proud by going to ramp.com to find out how they can help you make your business more efficient and make cost control and Obsession that is ramp.com one more thing I want to tell you about before before we jump into
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this episode is vesto a lot of my friends are using vesto to see all of their Company accounts in one view so vesto helps you connect and control all of your business bank accounts from One dashboard I know the founder Ben I'm
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friends with them we spent a bunch of time together we've had dinner we've gone on walks and I've offered to help him by introducing him to some of my friends that could benefit from using Vesta so I called one of my friends and
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he said listen David I will meet with anyone that you want me to but I must tell you that we say no to over 9 0% of the software we were pitched and yet a week later I hear back from him and he told me that Ben and vesto are great and
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that they signed up so I asked him to tell to ask his team to explain the benefit that they get from vesto in their own words so I'm going to read the text messages exchange where they his team is now in their own words telling
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what the benefit they got from vesto it says it provides us the ability to view all of our bank accounts and Loan accounts on one platform with a single sign on it it makes it much easier to Grant access to users in one place as
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opposed to 20 different banks so I respond what did they do before vesto they said they had 20 different bank bank logins across five accountants we literally used 21 Banks so every bank had an account and a loan that multiple
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people need access and Views to just to log in and see everything would take hours and would all be in different tabs so if you have multiple businesses if you have multiple accounts go to vest.com and schedule a demo with the
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founder Ben and tell him David sent you that is vesto with a V vest.com the link will also be down in the show notes and now let's get to the episode I hope you enjoy the episode on the one and only hey green I want to talk to you about
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two books today the two biographies of Hy green that I read the first is HED the genius and Madness of America's first female Tycoon is written by Charles slack and the second is the richest woman in America H Green in the Gilded Age by Janet Wallace so you may not know who hdy green is but in her day she was one of the most famous and Infamous Finance years investors and entrepreneurs she was by far the smartest woman on Wall Street uh she's a
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financial genius a railroad magnet a Real Estate Mogul and she was also described as a Gilded Age Renegade which you and I will talk a lot about today it's one of my favorite things about her and shockingly this is one of the things
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that blew my mind the most is she was a reliable source of funds for city government so on more than one occasion Hedy as a single individual bailed out the city of New York and the reason I think it was important to read two books
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on her is because we're dealing with a very singular individual here you have to keep in mind at a time when women weren't even allowed to vote H was the single biggest individual Finance year in the world and so I just want to give you a brief overview before I go into her childhood because I thought her childhood and the education she received from her family was very fascinating uh she refused one of my favorite things
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about her this is mentioned in both both books multiple times is she refused to comply with any type of stereotype there was a description of H by another person that I absolutely loved they said HED was defiantly independent that she made her own rules and lived by them in fact when I read that part maybe think when I got to have uh dinner with Charlie Monger I asked him what he thought of Jeff Bezos and Munger described Bezos uh
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one of the best ways I've heard anybody described he says that Jeff was ferociously intelligent and so this idea of com combining ferocious intelligence with being definely independent absolutely loved and this is a great quote that'll give you a sense of you know H's personality and she said I've had fights with some of the greatest Financial men in the country did you ever hear of any of them getting ahead of Hedy green and she had a personal
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motto that she lived by says I go my own way I take no partners and I risk nobody else's Fortune again she was the single biggest individual Finance year in the world when she was alive so Hy was born in the same decade as Andrew Carnegie John D Rockefeller George Westinghouse Jay gold the difference between her and other Robert Barons that were born in 1830s was that she actually came from an extremely wealthy family she grew up in
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New Bedford Massachusetts which at at the time in this blew my mind new bed for Massachusetts was the richest city per capita in the world and the reason that it was is because it was the center of one of the most the world's most valuable Industries which was at the time whaling and H's family owned and operated one of the most valuable whaling companies in the world and this part shocked me so like why would whaling be so profitable now keep in
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mind the whing industry is going to get disrupted by Rockefeller and his organization of the oil industry but at the time you could send a single ship out right to go hunt whales a single ship could come back with 4,000 barrels of whale oil that would be a value of approximately about $100,000 in $1850 so the whale oil oil that comes back from the ships it's used in all types of Industries uh it would they would use whale oil to grease machines
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for industry they would use it to lubricate watches and guns it was used for lighting that is the the main part that Rockefeller winds up disrupting a few decades later it's also used to make clothing for women like corsets and was converted into per fume as well H's family not only ran one of the most successful Wheeling companies but they also had a very specific belief when it came to money and so what they believed
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and they taught their children and this is going to go back many generations that it's the duty of every heir to increase the family riches so they would say hey you're just a steward of the family wealth it is your job to inherit it and then grow the family fortune and teach the Next Generation to do the same and there's actually a funny story about this later in uh in H's life this is the time when the Vanderbilts are building
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all these gigantic mansions in New York City and Hy at the time is living in a really small apartment and she was asked by a a reporter like why don't you like why aren't you like the other robber barons uh why aren't you building you
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know these palacial palaces or whatever the case is and she said my family has been Rich for five generations we don't need Pomp and Circumstance so H is going to be immersed in the world of business and under the tutelage of her
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grandfather and father her her father's nickname was Blackhawk Robinson because he kept a close eye on all of his business Affairs so there's this Maxim that you and I talk about over and over again appears in a lot of these
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biographies and it says you can always understand the son by the story of his father the story of the father is embedded in the son the exact same case is accurate for the relationship that Hedy had with her father her father said
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he's on record and he has there's a great quote in one of the biographies where he said that making money was the great object of his life and that that he pursued his fortune the way that Captain Ahab pursued Mobi dick H is going to be exactly the same when she's older hd's father is brilliant at business in fact HED said that she trusted his business judgment above everyone else's and that's even though they had they had a very uneven
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relationship her father when he found out that his wife was pregnant he wanted a son and he wanted a son so the son could take over the family business just like he was taught in a previous generation the problem was hd's born
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first then they have another child that child is a boy but that child that boy dies in infancy and so H's father winds up sending hedie when she's around 2 years old to go live with her grandfather her grandfather was also a
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partner in the family business and so it's going to be her grandfather and her father who actually enroll HED into service of the family business from a very young age in fact from the age as soon as she could read and hear as well
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why H's father and grandfather had very poor eyesight so she had to read the financial news and their financial reports of the business to them I want to read this this quote from the book she read shipping statistics tariff news
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currency debates the latest on Securities Investments and trade news from New York she absorbed everything by the time she was 15 she said she knew more about Finance than many other Financial men Hedy would describe this as the best business education a young person could receive she said when quite a child I was required to read the reports of the stock markets and of various business transactions to my father who would carefully explain to me
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those things I did not understand I was obliged to keep a strict account of personal and household expenses all of these things were most useful in forming the mind for business responsibilities when it became necess necessary for me
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to assume them in this way I came to know what stocks and bonds were how the markets fluctuated and the meaning of bulls and bears this formative education was so important to her her father's going to die when she's about 30 years
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old Hy Works lives and works until she's like 80 or 81 decades after her father passes away she's constantly referencing the importance of this education that she received from her father and grandfather and it's not just reading
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things and looking at reports she talks about going to all aspects of the entire business so they're running a wailing company so they would take their daughter down to the docks and to all the other various parts of the company
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the office and every everywhere else again this functions as another form of education for her and so let me read from the book she watched him closely as he assessed the inventory inspected the ships dealt with the captains and heard the rough Talk of the crews there's something funny that's repeated over and over again is that women were expected at this time to you know act a certain way and they said that HED rejected all
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of society's norms and she cursed like a dock worker that's that's a line that made me laugh uh she listened to him bargain with merchants and B R them when he thought they were charging too much she followed along when he took her to
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the court Counting house and showed her how to read the ledgers or brought her to the boker's Brokers and taught her how to trade commodity she paid attention when he repeated again and again that property was a trust to be
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taken care of and enlarged for future Generations she obeyed when he insisted that she keep her own accounts in order and later praise the experience this is what she said there is nothing better than this sort of training I acquired the habit of keeping track of every scent and I got the most value for every dollar I spent he also taught her how to invest the profits of the family business a skill that she will do almost
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better than anyone else in the world later on it says at his request she worked closely with him on his portfolio of stocks bonds and real estate after years at his side HED felt more than competent to analyze the news and assess the financial markets and another lesson that her father taught her over and over again something that he would repeat to her throughout her entire life something that she would then repeat after he was
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gone she was Hedy green was an debt her entire life she says my father taught me never to owe anyone anything not even a kindness this is going to be extremely valuable later on in her work because H's life and career there's a series of
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financial panics and again I I told you this in the past but now we we call these things you know recessions or depressions but that 20 150 years ago 200 years ago they called them Financial panics that is a much better term in my
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opinion because that describes the behavior of humans when there is you know Financial down turn there is a panic so I went and grabbed a list of all the financial panics that occurred during her lifetime so the panic of 1837
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1857 1873 1884 1893 1896 and 8 and 1907 in every single Financial Panic it is the people that kept a fortress of cash that is able to buy up assets for pennies on the dollar so her her father teaches her this and she he teaches her
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through repetition by saying this but also she was watching his action he he taught her to keep a fortress of cash and never have any debt and so even during downturns her father was able to scoop up assets for pennies on the dollar he said he he' Thrive through all of the downturns because he always had a ton of cash and he had no debt in fact there's a great line I was reading about David geffin and it says uh that David
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geffin was as liquid as the day is long and so you could say that H yeah throughout her life she's going to be liquid as the day is long remember she's going to be a single individual bailing out the city of New York and so over and over and over again the books give examples of all these Financial panics and then hady just greatly increasing her wealth during these Financial panics this stem really from the the blueprint
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that that her father taught her in childhood no debt no buying on margin watch every penny and stack your cash and that was the way that her father stayed winning so they're going to see the very end of the industry that made
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them wealthy because now you have in the in the 1850s all these people in 1860s are all switching to kerosene so the price of whale oil is going to crash the the actual Bank of New Bedford winds up going under hedy's father's business
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which had no debt wind up Surviving but her father was smart enough to not get out of a Dying industry too late I got to read this section to you because I thought this was brilliant on his part and also changes the the trajectory of his daughter's life because they're going to leave New Bedford right when they realize oh this opportunity is drying up we're going to go to where the action and the money is and that's New
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York so whing you can think of this as wailing oil is going to get disrupted by Rockefeller and here's a great description of how shrewd her father was as always his business timing was impeccable he had entered the Wailing
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business in the 1830s just as it was approaching its Zenith and now he quietly that's a really important word there bad boys move in silence hedie her father taught her this and Hy does this start her entire life she constantly
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hides you'll never know what assets she has what stocks she's buying she's very she operates very very quiet and so now he quietly but quickly sold off the ships and other assets when he recognized unmistakable signs that the industry was headed for a decline from which it would not recover the recent discovery of oil in Pennsylvania combined with new techniques for refining it promised a new and seemingly inexhaustible supply of oil that did not
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require costly dangerous voyages on the far Seas some whaling men now they're going to compare and contrast H's father's actions with people that got rich in the industry it's very hard to when you just got rich from an industry
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to leave it voluntarily some whaling men would ride the industry down to its Bitter End sending fewer and fewer ships out to hunt ever more elusive whales for an oil that the world no longer wanted but sentimentality was never one of
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Robinson's traits to him wailing had been nothing more than the best way to make money and New Bedford was the best place to do it when the time came he cast them both off with a Brisk indifference in New York he found new
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success in merchant shipping and real estate heading moved to New York with her father and for H's life this was perfect she's going to New York she had a genius Financial mind and there's no better place that she could be so I want
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to go back to this idea that she was defiantly independent and again I think this was a huge asset for her especially because she she could act against the crowd over and over again but there's a great you say all this this defiantly independent nature of her from a young age she actually was uh her aunt there was a story in the book where her aunt Sylvia warned her away from a dangerous horse and Hy took it upon herself to
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break him and rode the wild animal until it settled down I think that's a great metaphor for how she approached business so this Defiance this dedication to doing things her own way it really helped her immensely because she never
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really cared to follow the crowd and then she also would observe so there's there's this line where it's like okay all of History's of greatest entrepreneurs studied all of History's Greatest entrepreneurs she is a young
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woman she's in her early 20s and she's doing the exact same thing so the financial Panic of 1857 Hy learned some very valuable lessons and at 23 years old she's going to see firsthand how humans panic and then how how those that didn't Panic got
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rich and so there's a bunch of names in here that will be familiar to you and I it says Hy learned some very old lessons about human behavior during booms and Buss more railroads slipped as confidence fell and for a few months
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Wall Street which was trading primarily in railroad stocks at the time ran off the track but if speculators who had bought on margin would forced to sell their shares to cover their losses shrewd investors like Cornelius
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vanderbur and Jay gold swooped up to stocks at low prices Hy would later do the same a few clever men like Russell Sage a future role model for H kept substantial amounts of cash on hand and and used it to buy stocks at rock bottom
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prices JP Morgan told his son there was a good lesson to be learned from other people's greed and good Bargains to be found in the aftermath in future times Hy would always keep cash available and use it to buy when everyone else was selling much later Warren Buffett would do the same but most people watch their money wash away in the flood this pattern will repeat throughout her life there's another example a few decades
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later this time it's during the Panic of 1873 and Cornelius Vanderbilt profits from that as well most of Vanderbilt's railroad stocks had plummeted Vanderbilt bought his stocks for cash and was able to wait out the market but his followers who risked their money on on a 10% margin were racing to cover their losses when a friend complained he replied if you had bought a 100 shares instead of a, you could have held on never be in too
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great a hurry to get rich like H Cornelius Vanderbilt bought his railroads for the Long Haul okay so then H's dad dies HED is around 30 years old when this happens I need to talk about the complicated relationship they have
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because at first he was Furious that his firstborn child was a girl you know he wanted a son he wanted an heir somebody teach the family's business so he sends her away to live at her grandfather's over time when he realizes he not going
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to have another child now his only child is HED he his emotions cool down you know he he mentors her but HED thought she's going to she feels she's going to feel betrayed when she sees the results of his will because her father died you
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know that she thought he was obviously a very tough man a very difficult man but she thought they had a better relationship than the will is going to reveal and even though he knew his he had trained his daughter he knew his
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daughters were very smart he still decided he could wouldn't trust her with the family fortune and this is going to be wild because I'll just read this note to you that I I wrote to myself which blew my mind because I thought okay you your family's been Rich for Generations you know you inherited a bunch of money and then you made that that money bigger it's still an impressive feat but I didn't realize that she is going to
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become the richest woman in America maybe the richest woman self-made woman in a in the world not by investing the principle of her family's Fortune but by by by by investing the investment income she turned she's going to turn a yearly cash flow of a couple a few hundred thousand into over a hundred million so her father dies decides that the money he leaves her should be managed by other people this is going to be the the
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biggest betrayal she has of her entire life okay and so this is 1865 and it says an inventory made after his death showed an estate of nearly $5.7 million that's crazy in 1865 of that only 163,000 remained invested in
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whaling ships showing the extent to which he had succeeded in extracting himself from the business that had made him rich now her father left the entire state to his only Heir his daughter okay it says actually that she's five months
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shy of her 31st birthday but there was a catch Robinson had arranged to leave Hy a little over $900,000 outright the rest of it which is almost 5 would be bound up in a trust with h as the beneficiary H was a woman and her
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father followed the conventions of the day and kept some 80% of his fortune in a trust for her so she would not Fritter it away imagine working by your father's side since you were a child and his will it's revealed his true feelings
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that you're a girl I can't give you this money because you'll Fritter it away she is one of the best financiers in human history says Hy could interpret the will as nothing other than a deep and burning insult she would carry anger over her father's will throughout her life transferring her rage from her father to the men he had selected to administer her trust so again she's going to become the richest woman in America and maybe
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the world not by investing the principle of her family's Fortune but just the investment income how many other people right could turn a few hundred th000 a year into a 100 million so now with that in mind I think it's the perfect time to talk about how had worked and give you a few examples of some of the Investments that she made so as you could imagine if you just felt you went through the biggest betrayal of your life she is
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fiercely independent and she works alone and I think this paragraphs gives some insight into why that's the case Hy lived her life convinced that she was fundamentally and completely alone nobody else could watch out for her
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interest she mistrusted all forms of alliances and cabals where other investors sought the safety of numbers the soothing ring of con census Hy felt most comfortable on her own trusting her own judgment and instincts and when they
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say that she worked alone she didn't even have an assistant she said she wants to read everything she read everything herself she did not want anybody else filtering her information now she kept a very simple and predictable daily routine she woke up early she would eat a small breakfast in her small apartment then she would take the 7: a.m. fairy to Manhattan and then she went to her desk at the chemical bank she was their biggest customer they
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they offered her a private office she goes no I just want a desk in the middle of the bank and so this is what she was doing all day this is a typical work day for Hy at her desk at Chemical Bank she sat down at her desk and began her
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business four times a day the letter carrier brought stacks of mail to the bank Hedy slid her knife across the envelopes read the letters scann the tabloids and the broad sheets she shifted through piles of paper checked
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the Mounds of coupons this is coupons for all the bonds she would own uh to clip tracked her lawsuits decided which railroads real estate and bonds to buy or sell and oversaw the scores of payments on loans and mortgages to
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collect she reveled in conversations with the officers of the bank and the men who came to call on her at the end of another long day she would part the bank leaving behind her concerns over Finance so she's one of the first people
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to arrive at the bank she one of the last to leave and then she was capable of leaving work at work which is something I struggle with and you might as well she says business never disturbs me after business hours I never worry about things I do the best I can every day as I go along she would then leave the bank go back home and have dinner around 8:00 p.m. with her daughter and then the more you read about he you just
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realize oh she was completely in love with her work and she was completely obsessed and I actually think there's a lot of Genius to the fact that she didn't let anybody else filter information all the reading that she did
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all the work that she did was contain in one inside of one brain I think that actually over time gives you a massive advantage and so this is her describing or this is the book describing this is the research process that she would make
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before making an investment when she had read quick quizzed grilled interrogated investigated enough when she had studied the cost analyzed the assets assets and dug through the debts when she had found the answers to suit her when she knew the true worth of a company and understood its weaknesses when she was satisfied that its basic values were sound and its assets strong that the downside risk was low and the upside
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High then she would invest her money and so this is great line uh from Steve Jobs where he says make what you love your work make what you love your work and there's multiple examples in both books I just pulled out a few for you that
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that's exactly what Hy did what she preferred most was her work she loved digging up dirt on businesses and she loved the nitty-gritty of Finance I have a head for numbers she said they light me up and tell me a story another
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example of making what you love your work she prized the life that she led I enjoy being in the thick of things I like to have a part in the great movements of the world and especially of this country I like to deal with big
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things and with big men and so she talked about you know the idea what what she was supposed to do at this time in history she was supposed to be a society matron and she's like this is boring as hell she says I would rather do this
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than play bridge indeed my work is my amusement and I believe it is also my duty and so when people found out how wealthy she was they would ask her like why why don't you retire why like why are you still working and they're like
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no she loved it it was like this giant puzzle and game she never wanted wanted to stop she says I know of very few people who are busier than myself and who are better trained to combine business with pleasure after asked if
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she planned to retire had he responded why should I give up my work and this is one of my favorite things about her is the fact that the rules that she chose to live by were her own and not what she didn't give a about other people's expectations Society friends family members what they thought she should be doing the rules that she lived by were her own I think it's one of the biggest takeaways from studying Hy green again
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this goes back to the fact that one of the things I most admire about her is that she was defiantly independent she was very comfortable more comfortable maybe the most comfortable trusting the results of her own thinking and trusting the results of her own judgment there's a line in the book I just want to read to you the rules she chose to live by were her own rather than society's by casting off the societal expectations of
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her time she freed herself to do as she pleased to live a life on her terms that she and she alone determined so let's go into some examples of Investments that she made people would ask her like how do you do what you do and she would she
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would say it over and over again she had a very simple strategy I'd 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
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and you see this over and over again she's just literally doing that exact same thing over and over again completely content to go against the crowd which is very very hard obviously if you study the history of financial
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panics it's very very hard for humans to do so she has this one tra that she does shortly after her father dies it's the it's uh she she's trading in greenbacks so it says she was already establishing the patterns of investment that would
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define her career sticking with conservative instruments such as United States bonds and having the cool head to stay on course when others had panicked so she starts buying up United States Greenback notes the government had printed the United States government had printed large quantities of these notes right after the Civil War to try to to cover some of its huge expenditures okay so at the time the union had just won a
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huge uge military Victory but people were very scared and really just doubtful about the future economic prospects of this you know country is trying to put itself back together as a result there's this huge rush to the safety of gold and the value of greenbacks wind up dropping as low as 40 to 50 cents on the dollar Hedy sees everybody else panicking inflating greenbacks for gold and so you know what she does she's she going one up buying
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green backs essentially what doing she's buying dollars for 40 or 50 cents there's a great description of this trade from this book called the men of wealth and it says here was an excellent chance for any farseeing person to pick
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up government securities at half their value all it required was little faith in the nation that had just demonstrated in a most extraordinary way its ability to come through a terrific Civil War looking back at it now the recovery of
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the country ought to have seemed a sure thing to any Observer the war had given an immense impetus to the resour ources of the continent so all the all these natural resources are going to they're going to have huge essentially uh booms in all these natural resources like coal iron oil copper gold and silver but for all that the nation's credit was at a low E and through 1865 1866 1867 Hedy bought all the government bonds she
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could lay a hold of so she ran her Playbook with greenbacks and government bonds she does the exact same thing for Real Estate she is going to build a gigantic real estate Empire bolio most of this real estate she's going to
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acquire happens during Financial panics uh you can think of H again remember the the largest single individual financier in the entire world that just that sentence breaks my brain it it it just blows my mind you really think of Hy as
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a onew woman Private Bank okay so it goes back to what her her father told her to do when she was young you have to keep a fortress of cash she is going to use that to buy real estate out of foreclosure okay so banks in need of
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cash would sell heady loans mortgages that they had made to other people using property as collateral some of these borrowers are going to default on their loans Hy began to acquire uh the property for the mortgages right this
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was the beginning of what's going to become this gigantic real estate Empire so she's going to wind up owning dozens of buildings in Block after Block in New York Chicago St Louis and Boston most of them were acquired because of they were through foreclosure on the mortgages that she held she rarely if ever bought a property outright on the open market and once she owned a property she held on to it that is repeated over and
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never again H's philosophy on real estate was very simple hold on to property so I actually found an interview that is that took place I think in New Yorker magazine let me check it's 1836 yeah it was in uh October 22nd 1938 sorry uh in New Yorker magazine it is describing and I actually looked it up and read the whole thing it's describing an interview that HED gave about 30 something years earlier in 1899 okay so I pulled a quote from this
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interview of hers in 1899 that describes her real estate portfolio she says I have mortgages on 28 churches and on four cemeteries I have blocks of business houses theaters Library Stables hotels restaurants farms in nearly
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everything you could imagine 5 years ago I started out to take a look at all these buildings so like I got to go see all the property that I own all over the the country I traveled for nearly 2 years and stayed at 40 hotels so I think
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that gives you an ins insight into like the the sheer scope of her real estate portfolio that it took her two years and should say 40 different hotels just to see all of it okay so we see Hy running her playbook in government bonds in greenbacks in real estate she also does this she's going to invest in railroads and then she's gonna wind up buying some railroads um outright but I want to give you an example of how hadie worked and
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how she applied this Playbook to you know the most important industry of her day and she hears about this takeover attempt of this small railroad called the Georgia Central Railroad and I think it's an important example for you and I to study because it really gives us a glimpse into the tactics and style that she's going to use over and over again for the rest of her career so starts out with a group of wealthy investors in New
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York they start studying the Georgia Central Railroad they're like hey this is a ripe takeover opportunity and they just thought there was a bunch of assets inside the railroad that the railroad also earn uh owned that was not being properly accounted for one of this was a steamship line and so since the steamship line they figured had been really undervalued among the railroads assets they are going to buy up enough
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stock to Take Over Control and then they want to install their own managers and directors so H gets wind of this plan and early on begins quietly remember you know she she hid over and over again I'll tell you more about this later but
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she she always would always conceal the movements and what she was doing so she begins quietly buying up a bunch of Georgia Central stock she's paying around $70 a share she winds up accumulating almost 7,000 shares 6,700
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shares and then what does she do nothing she she always does she just wait Waits very patiently and so as the other group keeps buying more and more stock the stock starts shooting up so now the shares that she paid $70 for are now
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$100 a share she could have easily sold at this point for a quick $200,000 profit but she chose to sit tight figuring that as the clock tick the New Yorkers would grow even more nervous in a close election her chunk of stock
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might mean the difference so they the guy that's going to run the railroad if they if they win this election his name is Alexander he goes and speaks with Hedy once he finds out that sh's this huge chunk of stock okay you paid 70 for it it's trading on the open market for 100 I will give you $115 for each share that means she could walk away with a $300,000 profit hey respond you can have my shares for $125 Alexander says okay I will give you
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$125 but not until after the election instead of selling her shares now she would have to promise to vote their way when the election was over she would get her money in full had he replied if I have to wait for my money the price is
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$13 so they wind up settling at $127.50 the vote happens head shares provide nearly half of Alexander's 15,000 share Victory and she winds up making a profit of $385,000 nearly double what she would have made just by holding on a little
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longer and it's important to not that she's able to seize that opportunity when it presents itself in railroads because of all the work that she did before the opportunity presented itself I want to go I find the way she worked very fasinating here's another description of it only a small group of investors had access to as much information as Hedy did on the railroads and their maze of lines her transatlantic connections her insistent
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research her in-depth questioning and her constant reading helped her decipher the complicated Financial code and decide which rails to invest in and which ones to avoid now you'll see she talks about this and she made a bunch of
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money on railroads in the Panic of 1873 at the time uh stock when stocks are being abandoned in Mass because of their the Panic of 1873 this is when Hy decides that she wants to trade she says I believe in getting in at the bottom
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and out at the top I like to buy Railroad stock and mor or mortgage bonds when I see a good thing going cheap because nobody wants it I buy a lot of it and I tuck it away for Hy the decline in the market offered an opportunity for the future she had a pile of cash when others were scouring for pennies but she also had a deaf mind and The Colossal courage to push against the crowd it goes back to that see how all of all of
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the lessons that she learned from her her father her grandfather the training that she had when she was a child also interacted very well with her natural drift with her with her nature which her nature was to be defiantly independent which also gave her the courage to trust her own judgment and to do her own thinking and this where she's going to teach and train her own children as well and before we move on cuz she's going to
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buy a railroad out of foreclosure and then have her son uh run it I I've said this to you before but it is impossible to overstate how important and lifechanging the railroad industry was at this time in America I just did this
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episode on James J Hill and there was just crazy stats in there so by 1885 railroads brought in twice the revenue as the federal government they railroads were the nation's largest employer the railroaders were the largest private
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landh holders in the country they own more than 10% of land in the United States and then this blew my mind which I just learned uh from reading this book on hdy green the reason that we have the concept of standardized time came because of the railroads it was standardized time was unheard of until Railroad schedules made it necessary for two towns located hundreds of miles apart to keep the same clocks okay so now I want to get to H and her
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children remember Hedy tells her kids you know you come from a family that believed that each generation was just a steward for the family's wealth and your job is to increase it and then prepare the Next Generation to do the same so
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there was a a curious line in the book about this it says HED never failed to tell her children how rich they would be one day and she meant it for her goal was to leave them as the richest people in America and she was not shy about the
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fact that she recommend training your kids in business from infancy she says a certain amount of business training would be an excellent thing but it should begun but it should be begun in their infancy so her firstborn child is
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a son that they named Ned she wanted to prepare Ned to learn the railroad business because it's the most important industry in America at the time and she's like listen I'm not just going to buy a railroad then install you you're
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going to work from the ground up she said that the best way to learn any industry was from the ground up so his very first job was as a clerk and a handyman for this this Railroad in Connecticut and her son said she wanted me to learn railroading and the only place to learn that business is on the railroad down on the ground among the men Ned found himself patrolling a stretch of track for $10 per week cutting weeds and helping repair track
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she would constantly test her son he's 22 years old in this story I'm about to tell you as Ned left for Chicago his mother gave him a package of papers telling him to guard them on the train at all cost figuring that he was transporting some vast sum in negotiable bonds or other Securities Ned barely slept on the journey keeping the package under his mattress as he lay awake when he reached Chicago and delivered the
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package to the office it turned out to contain sads of expired fire insurance policy the delivery was simply his mother's way of testing his reliability when he was asked what the most important lesson he had learned from his
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mother he replied without hesitation selfreliance and the way she does this after making him pass a series of tests beforehand is really really smart so she's going to buy a railroad about a foreclosure and she puts her son in
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charge of expanding and improving it keep in mind she there living in New York she buys us in Texas she's going to send Ned to Texas he's 24 years old to run this railroad she's going to be he's going to be in Texas for the next 16 years and it is in Texas with this railroad which they're going to rename the Texas Midland Railroad is where she's going to make him prove himself as a businessman this very fascinating what
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she does here so first of all Texas Midland she bought out a foreclosure not much of a railroad it was outdated poorly maintained she's like you have to get it profitable you have to expand it you have to repair the lines and you
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have to keep adding miles and connections it's very simple how you make a ra more valuable right so it says though the money was hes when it came to decisions on what to do with a sagging railroad she made it clear that her son
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was in charge so he is 24 years old he's got this you know genius overbearing mother and he's like I don't know what to do so every time he's faced with a business decision he would immediately send her Telegraph and like what what do I do what do I do and she would send back a very tur response you're on the ground mind your own business she would make him make the decision and he was so nervous and he became so frustrated that he winds up
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going catching a train and going back to New York to see her and I love what she does here in this situation so they're New York and she goes suppose I was not here what would you do if I was dead you have to be self-reliant so she tells she winds up telling her son this it's an old wailing Parable that she learned when she was a kid about a captain and her and his two sons and this is the the the story his sons were his mates Hy
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said they wore uniforms and looked very Spruce but they didn't take their turn at the wheel or stand watch finally when the captain died and no one on board was being competent enough to navigate the ship it went on the Rocks I sent you to Texas to learn the Railway business I cannot teach you by Telegraph from New York go back and do the best you can and that's exactly what he did he learn the only way there is to learn du experience
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slowly over time and so he wents up improving the existing line he winds up adding connections wind up adding miles fixes the bridges he paid attention to every detail and he just made this little incremental improvement over time
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and at the end of 10 years you have a very valuable Railroad and in fact it was important because he saw how his mom you know you you could say she definitely micromanaged her Affairs she's working by herself she has to do
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everything right and Ned his favorite actual place was on board one of his local motives in riding in the cab beside the engineer paying attention to every single mile of the track so one of the things that she would repeat to her
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children is you don't kick a person when they're down and she also applied that to cities so remember I mentioned earlier that she WS up loaning and bailing out in New York City multiple times and this is just really this one
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woman Bank this single largest individual fer in the world uh she's going to wind up being like this one woman Federal Reserve which I'll get to in a minute but there's this this paragraph I want to read to where it says more than than once she bailed New York City out of a pinch it is staggering to think of a major city coming to a single person she rarely if ever took the opportunity to kick a barrow when they were down that was bad
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business she always said and so in 1898 she lent the cash strapped city of New York a million doll at the rate of 2% which is well below the prevailing rate of 3 to 3 and a half% when I mentioned that she's a onew woman Federal Reserve the media would follow her every move the way that we would follow like the Federal Reserve cutting rates to this day her millions in cash and her willingness to lend made her a a one-woman Federal
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Reserve whose decisions on interest rates were followed the way investors today await the word for the FED chairman here's this headline that New York Times reported on January 7th 1911 pedy Green Cuts rates just imagine that
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it's not like the FED chairman Cuts rates it's like no this single woman sitting at a desk Chemical Bank downtown Manhattan decides to cut rates and so therefore we need to pay attention to it we need to to report it in every single
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paper in the country it was just hilarious to me and then I think it's important to like round out her personality because I think the the same personality she had when she was younger was much more pronounced when
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she was older she's very secretive very frugal and very paranoid again bad boys and girls in this case move in silence she would not tell other people what she owned or what investments she was making she bought property under fictitious
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names and stocks under other identities on more than one occasion she would show up to her Banker with larger amounts of stock than anyone suspected I just want to read one section to you this this jumped out to me because I grew up
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playing Monopoly and I loved uh buying the railroads she had secretly acquired far more shares of reading railroad than anyone knew she was a rare woman who could hold her tongue and they sheepishly had to admit that she managed
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her business far better than most men she was Frugal to the extreme I've already told you how she lives in small apartments her entire life when she could be living you know the biggest house in New York but she she's carrying around essentially the equivalent of hundreds of thousands of dollars in Securities on public transportation that's like me and you walking around with a bag full of you know hundreds of thousands of dollars for cash so her
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Banker meets her outside one day and he sees her getting off of public transportation he admonishes her for carrying negotiable Securities on public transportation it's dangerous he told her you should have taken a carriage so
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this is again how Frugal she is she's one of the richest people in the city and she says Hedy shot him a look and replied a carriage indeed perhaps you can afford to ride in a carriage I cannot and so that's in line to advice
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that she would give her children watch your pennies and the dollars will take care of themselves and she was largely mistaken not that she cared when she was alive but she was largely mistaken people assume that she was unhappy because she refused to spend her wealth and in fact she to this day she's in the guis Book of World Records as the world's greatest Miser I don't think she was an unhappy person at all I think she
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was in love with her work and she thought it was a huge game and she thought she was really good at it and she was obsessed with the compounding nature of wealth and so she was very reluctant to spend any of her money another part of her personality is she had disdain for self-indulgent socializes which she could have played the role if she wanted to she never had to work if she didn't want to uh so she's she's talking to her her daughter
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about you know do not marry this young useless man who comes from he comes from a wealthy family but but but Hy says but if it wasn't for his father the world wouldn't know a thing about him he has never earned a dollar and doesn't have the value of money another trait of her she was good and she knew that she was good this is her personality in a sentence I never set out for anything that I don't conquer another example of
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her knowing that she how good she is during the Panic of 1907 okay so she set up inside of her desk at the bank uh all these over these people that were overleveraged right are seeking he out because they know that she has tons and
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tons of cash and they appear at her desk to sell her to sell pedy their assets for pennies on the dollar I want to read this paragraph to you so it says black clouds hung over many of the debtors they had little choice but to divest
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their Holdings had he watched as rich men arrived at The Chemical Bank taking off their top hats drawing out their expensive engrave cards and handing them to a clerk at the door they sought he out to sell off their possessions as rates Rose more and more of the quote solidest men in Wall Street she said this is Hy now talking about this from financiers to legitimate businessmen came to call begging to unload everything from palacial Mansons to
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automobiles they came to me in droves she recalled another interesting thing about H she kept a gun at her desk and she had a mama Bear's protective Instinct so one of the most famous uh railroad uh entrepreneurs in the country
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is kalis Huntington and he winds up coming to visit her in New York at The Chemical Bank they're having like this huge fight over this railroad uh in Texas and and he says he threatened that if she and Ned her son did not relent he
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would see it to it that Ned was tossed in a Texas jail H's eyes narrowed on Hunting up until now Huntington you have dealt with Hedy green the businesswoman now you're fighting Hedy green the mother you harm one hair on Ned's head and I'll put a bullet through your heart she made a motion towards the revolver that she kept on her desk H did not play uh there was another interesting thing I I I learned about her the fact that she
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gave her children not a list of do this she gave her children a list of don'ts so again this is going to remind me and you of Munger in fact I think I discovered originally discovered hdy green because waren Buffett and Charlie
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Munger had studied her but that that idea that Munger said that you invert always invert that you can actually uh like like Munger uh had he studied the cause of human failure and Folly and then just avoided that and so here's the
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list of don'ts that she wanted to pass on to her children don't cheat in any of our business dealings for sooner or later your conscious will trouble you and you'll worry yourself into an early grave don't fail to be fair in all things business and otherwise don't kick a man when he's down don't envy your neighbors don't overdress whether you have the means or not this causes Envy that's another interesting thing that
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she had in common with Warren Buffett and Charlie Munger the fact that they they both said that greed doesn't drive the world world World Envy does and that you have to cure yourself of Envy because Envy is a weakness don't fail to
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go to church for the church needs you and you need the the church they were Quakers don't forget that riches dishonorably gained must be left behind someday and when you depart you will find the Gates of Heaven bolted against
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you don't forget to be charitable charitable and don't falsify and then when she was 80 years old right before she dies she gives more advice when it comes to spending your life there have to be some things neglected if you try
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to do too much you'll never get anywhere and so when you actually study the traits of not only how she lived her life but especially it was very fascinating the conversations that she was having with her son and her daughter
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because you we know like the the how important the conversations and the upbringing for the multiple generations of uh that came before her were to H and really you can identify uh like the reverse of like the stuff that she was
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trying to get them to avoid the miror image of that are the traits that she winds up admiring and a lot of these traits she possessed herself so I just wrote I was just like sketching out like how how can I like distill the the the
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model of H in my own mind and based on her actions and what was important to her so HED was simple resourceful focused on compounding for the long term Frugal focused and paranoid very very paranoid uh traits that H valued in herself and others solid secure sober Frugal conservative and prosperous and before she died she left behind a list of maxims here's a few of them before deciding on an investment seek out every
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kind of information about it the second one watch your pennies and the dollars will take care of themselves the third one after your business is over you may take your colleague to dinner or the theater or allow him to take you but
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wait until the transaction has been closed and the money paage she understood incentives she understood the Deep desire for humans to reciprocate this is why you see like people like Sam Walton and other people they would not
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let any their salese or any their buyers take any kind of gifts you see the echo in in the knowledge that that he's trying to depart to her impart to her children uh number four before making a deal if anyone is full enough to offer
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you the full amount take it if you are offered less tell the man you will give him the answer in the morning think the matter over carefully if you decide and overnight Sheen saying sleep on it if you decide that it will be to your
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advantage to accept the offer say so the next day so the very next maximum should repeats that again in business generally do not close a bargain until you have reflected on it overnight here's another one when good things are so low that no one wants them buy them and lay them away in the safe when owning to some new development and that makes them go up and they're needed that other that other men will pay well for them then you sell
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and finally I'm always buying when everyone wants to sell and selling when everyone wants to buy and finally I think this is a great description of he to clo on she was an enigma a blue blooded Harris who identified with the
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common folk a female who triumphed in the male world of finance an independent who answered to no one but herself a renegade and a money maker who thumbed her nose up at what money could buy she used her intelligence to increase her
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wealth her independence to live as she wished and her strength to battle anyone who stood in her way and that is where I'll leave it for the full story highly recommend buying both of the books I will leave the links in the show notes and available on your podcast player if you buy the book using those links you'll be supporting the podcast at the same time that is 375 books down 1,000 to go and I'll talk to you again soon