“I’ve seen more people fail because of liquor and leverage – leverage being borrowed money.” -Warren Buffett-

In his latest Shareholder letter, Warren Buffett, one of the greatest leaders of our time, talks about his dislike for borrowing. He openly admits that his aversion to leverage has at time dampened the returns of his conglomerate, Berkshire Hathaway. He notes that extraordinarily cheap debt fueled purchase activity last year.

He says that he and his partner, Charlie Munger, believe it is “insane to risk what you have and need in order to obtain what you don’t need.” Since the beginning of their careers, Buffett and Munger have shared this view. Buffett adds, “in the meantime, we will stick with our simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own.”

Berkshire Hathaway has been a model of capitalistic achievement for decades, because the management has always remained committed to the company’s core values, which Buffett freely shares.

We hope you will find the letter both interesting and insightful; we did.

2017 Berkshire Hathaway letter