Saturday, 25 February 2012
WHAT WARREN BUFFETT SAYS ABOUT DEBT
Warren Buffet acknowledges that debt can effectively increase the return on equity in a company but warns against it. In 1987, he said this:
‘Good business or investment decisions will eventually produce quite satisfactory economic results, with no aid from leverage.'
'It seems to us both foolish and improper to risk what is important (including, necessarily, the welfare of innocent bystanders such as policyholders and employees) for some extra returns that are relatively unimportant.’