> Warren Buffett Blog: Dont borrow money to buy stocks

Monday, June 5, 2017

Dont borrow money to buy stocks


You shouldn't borrow money against stocks. And you shouldn't – if you're going to need some money for college or something in a year, you don't want to be in stocks because you don't have any idea what stocks are going to sell for in a year. It's inappropriate. But stocks are safe for the long run and they're very unsafe for tomorrow. 

Berkshire, three times since I took over, has gone down roughly 50 percent. Did I feel poor then? No, not at all. I mean, you know, but I didn't owe it on borrowed money. I knew it was going to be worth more over time. American business is going to be worth more over time. You know, that's what you're buying, is a business. You're not buying a stock, you're buying a piece of a whole bunch of businesses. Are those businesses going to be worth more ten or 20 or 30 years from now? Of course, they are. But if you think you can jump in and out or that you know the time to come in, then I think you're making a mistake.