Charlie Munger, Vice Chairman of Berkshire Hathaway, used to say “there are only three ways a smart person can go broke: liquor, ladies, and leverage.” While a dictionary might suggest that leverage simply is another name for debt, leverage often is associated with very high multiples of debt (200%+) used by “sophisticated” investors. Leverage continuously […]
Big Losses Versus Big Gains
Many new investors never start because they fear losing money. I get it. Losing money is extremely easy, even after you gain experience and become a good investor. It is also built into our minds that we experience more pain from losing money than from gaining money. Fortunately, with standard stock investing (more exotic types […]