The Power And Perils Of Leverage

Many companies try to take advantage of leverage. That is, they try to use “other people’s money” to boost returns for their owners. This can be a powerful strategy during good times. But it can backfire during bad times. In this episode, we’ll discuss: 1) Various kinds of leverage — for both individuals and businesses, 2) The power of leverage to transform ordinary business propositions into extraordinary ones, 3) The perils that come with various kinds of leverage — debt covenants, reduction in margin of safety, etc. And, 4) How much leverage is OK, and how to tell whether a company is employing leverage judiciously. Disclaimer: NONE of this is investment advice. Download the Callin app for iOS and Android to listen to this podcast live, call in, and more! Also available at callin.com