The Math of Debt | Value Investing News

The Math of Debt

  • This increasing levels of debt and debt interest becomes unsustainable, eventually leading to debt default.
  • Debt causes many problems, the worst of which is that the magic of compounding is working against you instead of for you.
  • As Charlie Munger has said: “I’ve seen more people fail because of liquor and leverage – leverage being borrowed money.” James Montier adds: “Leverage can’t ever turn a bad investment good, but it can turn a good investment bad.
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