Warren Buffett Quotes

I've seen more people fail because of liquor and leverage -- leverage being borrowed money. You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing.

Equity is the cushion that protects financial institutions from unexpected changes in the value of their assets. The greater the leverage, the smaller the losses required to wipe out a company's equity, leaving it without enough money to repay the people who hold its debt.

We've always been modestly leveraged, and we've never believed in a great deal of leverage on either our private equity business or on our investment banking business. And I think it really goes back to my uncle and dad growing up in the Depression and just seeing what happened to people who were overly levered.

If you look back to the most spectacular blow ups in history, you can always tie them to a couple things: They were extraordinary complicated strategies that maybe even the practitioners themselves didn't understand, and they were overleveraged.

When you buy anything with lots of leverage, it does not require a whole lot to go wrong to lose it all.

There’s nothing like doing things with OPM—Other People’s Money. It takes the risk out of it.

Big banks, highly leveraged casinos, do whatever they can to keep the cost of their gambling as cheap as possible. This means keeping interest rates as cheap as possible.

Can you know you can have institutions that put curbs on that in various ways, and actually what the banks, you know, they have various capital ratios and that sort of thing, but the banks got around them, I mean, they set up sieves and that sort of thing just to get more leverage. People love leverage when it's working. I mean, it's so easy to borrow money from a guy at X and put it out at X.

People who want to make a million borrow a million first

What are the odds that people will make smart decisions about money if they don't need to make smart decisions--if they can get rich making dumb decisions? The incentives on Wall Street were all wrong; they're still all wrong.

You can lose leverage, and it's the only way a smart guy can go broke.

Mea culpa, mea culpa. MIT and Wharton and University of Chicago created the financial engineering instruments, which, like Samson and Delilah, blinded every CEO. They didn't realize the kind of leverage they were doing and they didn't understand when they were really creating a real profit or a fictitious one.

People love leverage when it's working. I mean, it's so easy to borrow money from a guy at X and put it out at X.

In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting.

The most important word in the world of money is cash flow. The second most important word is leverage.

Having a large amount of leverage is like driving a car with a dagger on the steering wheel pointed at your heart. If you do that, you will be a better driver. There will be fewer accidents but when they happen, they will be fatal.

Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.

Leverage is the reason some people become rich and others do not become rich.

I am not aware of any specific provision that mandates any tightening of lending to small business other than a requirement that people who lend and then sell that loan be prepared to take a part of the risk. And I'm proud of that.

One of the lessons that I hope people will take out is the extreme dependence simply on the financial sector is really dangerous.

Berkshire's past record has been almost ridiculous. If Berkshirehad used even half the leverage of, say, Rupert Murdoch, it would be five times its current size.

In the LBO field there is a buried "covariance" with marketable equities, toward disaster in generally bad business conditions, and competition is now extremely intense.

You should command and demand the tenfold leverage on your dollars when you give it away as well.

The Bankers' New Clothes makes a simple, powerful argument: that banks need to raise more capital. It is entirely persuasive that the extent of their leverage makes the financial system fragile, and it clearly and patiently demolishes all the counter-arguments made by the banks and their lobbyists.

The globally constituted accident can be compared to what people who work at the stock exchange call 'systemic risk'.