Hetty let it leak that she had the 40,000 shares Cammack needed, but she made him sweat for a few days before granting him an audience. When he arrived, she was merciless. It was not a negotiation so much as an execution. She demanded $10 a share above her cost -- regardless of the market price, which had subsequently fallen fully 30 points. Hetty decimated Cammack and pocketed a $400,000 profit.

   True story.

   Here's the point that we should take to heart in today's or indeed in any market: You can sell on good information, or you can buy on better information.

   And that, my friends, is precise where we are. That's the choice this market offers.  

   As markets lose value, investors lose patience. They forget the fundamental reasoning behind their stock purchases as fear displaces reason. Investors see the value of their portfolios eroding, and they move to limit their losses by selling. The price could drop to zero, after all, and sometimes it feels as if that's imminent, so let's sell before it gets there. It's an understandable emotional response.

   These investors, to be sure, are selling on good -- that is, accurate -- information.

   In the short term, it makes sense. In the long term, selling in down markets only compounds the problem.

   That's because there is better -- more prescient -- information out there. Savvy operators like Hetty Green are all too happy to buy when everyone else is unloading at ridiculously cheap prices. They know the time will come when they get to dictate the price, just as Hetty did to Addison Cammack.

   The trick is to ignore what the price is and focus on what the price will be. It's purely a question of perspective. Hetty didn't care what the price of Louisville & Nashville Railroad was or what it did. It didn't matter in the slightest. I doubt she monitored the ticker in her borrowed office in the Chemical Bank. (She was far too miserly to pay for an office.)

   After all, Hetty knew what her stock was going to be worth later. In this market, many investors are selling as fast as they can. But Hetty was so sure of her position's value that she made the only buyer wait to see her!

   Hetty Green, like every successful investor before her and like every successful investor to follow in her footsteps, never sold the present. She always bought the future.

   That's the mental ammunition you need. Remember why you invested in the first place.  Hetty herself summed it up thus: "There is no secret in fortune making. All you have to do is buy cheap and sell dear, act with thrift and shrewdness and be persistent." Sell your stocks when they're up, not when they're down.

Where Would Hetty Invest Today?

   There are a lot of areas in the current market where I think Hetty Green would have seen attractive buys. But I think she'd have been most drawn to the oil patch.

   The worldwide economic downturn has international markets worried that people are going to use less oil. Crude has fallen dramatically since reaching its July 11 high of $147.27. In fact, crude closed at $56.16 a barrel on Nov.12, the lowest settlement since late January 2007.

   The International Energy Agency (IEA), which monitors energy policy and prices in 28 developed countries, is expected to cut its global demand estimate. The most recent U.S. government inventories reports show stockpiles of crude and gasoline are rising. AAA reports the average national price for a gallon of gasoline is $2.09, more than $2.00 lower than its record of $4.11 July 17. All of this is adding even more chaos to an extremely volatile market.

   How have the oil companies fared in this environment? Oil hit its peak July 11, when the Dow was at 11,100. The blue chips have since given back -25%, and oil companies, as whole, have declined some -71%.