During his recent interview on the RWH Podcast, Guy Spier discussed what Warren Buffett taught him about managing debt. Here’s an excerpt from the interview:
Spier: The only reason why I might not have been caught up this time is that I did enough of those other things. And before handing the mic back to you, I’ll just leave everyone with one thought. One, one thought. That almost haunts me, William.
And I will never forget it, and I keep repeating it. And forgive me if you’ve heard it come out of my mouth before.
At lunch with Warren at the steakhouse in downtown, in Midtown Manhattan, Smith and Wollensky’s Warren says the words, and we’d been talking about my father and about how he had never gotten into debt.
And actually we put a very, we’re sitting in this place in Klosters where we did take out a very insignificant mortgage. And my father was derisive because in his view, why on earth would you ever need to take any debt ever in your life? Just restrict, buy a smaller apartment, don’t buy the apartment, whatever it is.
And so we are discussing this with Warren, and just to bring up the context, we’re talking about how when we lived in Israel, luxury in our family and the good life was to go to this hotel, the Donna Cadia and get a cafe ua, get us sort of like chocolate filled, cream filled coffee with like a bomb. It was so much fun and it was a luxury on a weekend afternoon.
And Warren says, just as a sort of side comment, yeah I wouldn’t wanna get into debt ever because I don’t want to discover what I’m capable of.
And forgive me if you’ve heard this from me but Warren Buffett, this is not some individual saying that he doesn’t want to discover what he’s capable of if he allows himself to get into any significant amount of debt.
So if Warren is worried about that, how worried should I be about all sorts of other things, not just about debt.
If I hang out too much with people who have Robinhood accounts or so… if Warren can get himself into the wrong environment, which would result in bad decisions, I certainly can. And I really do think that it’s a constant work of channelling ourselves into a positive direction.
And when we see a fork in the road, when we see an opportunity, you know, I gave this phrase to you, take the high road and realize that it’s not just one decision. And this is something that, again, is, comes through in Berkshire’s, in Warren’s decision making over all sorts of areas.
Assume that the decision you’re making this one time, which seems to be insignificant, is repeated infinitely across your life and across the universe for you. And what would the results be? And if it’s positive, take it. But if it’s not positive, then take the one that is less likely to lead to a bad place.
You can watch the entire discussion here:
For all the latest news and podcasts, join our free newsletter here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple: