Warren Buffett, the “Oracle of Omaha”, is one of the world’s greatest investors of all time. Per-share book value of his holding company Berkshire Hathaway has had a 19% yearly compound growth rate over the past 53 years. Annual returns of 20.8% from 1965-2016 were more than double those of the S&P 500. Berkshire’s numbers are after-tax, whereas the performance of index’s are before-tax.
Buffett believes that investors have to avoid greed. He and his business partner Charlie Munger have a strong aversion to leverage. They agree that this has dampen their returns over the years but therefore sleep very well at night.
Buffett’s lesson: Never borrow money to buy stocks!
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