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In One Chart: Here’s Warren Buffett’s ‘strongest argument’ against buying stocks with borrowed money

Warren Buffett is no fan of using leverage to enhance investing returns. In this year’s annual letter to Berkshire Hathaway shareholders, released Saturday, he offered the table below to illustrate why:

The table shows the four “truly major” dips that shares of Berkshire BRK.A, +0.87%BRK.B, +1.01% have suffered over the last 53 years, Buffett notes. Berkshire over that time has built value by reinvesting earnings and letting compound interest “work its magic,” Buffett said. And while Berkshire has moved forward year by year, it wasn’t immune to the “gory” episodes portrayed above.

See:Warren Buffett’s annual letter to investors

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