Warren Buffett has always advised investors against borrowing money to buy stocks or, indeed, any other asset. In 1991, during a question-and-answer session at Notre Dame, Buffett used Donald Trump’s financial troubles (Trump’s empire narrowly escaped collapse in the early 1990s after the property investor was able to extend the repayment schedule for his debt) to warn about the perils of leverage: “I’ve seen more people fail because of liquor and leverage – leverage being borrowed money. Donald Trump failed because of leverage. He simply got infatuated with how much money he could borrow, and he did not give enough…
How Buffett Has Borrowed Heavily To Juice Berkshire’s Returns
Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk