Warren Buffett has long championed a conservative financial approach to investing. He doesn’t advise taking on much debt, and certainly doesn’t think Berkshire, or anyone, should overleverage themselves. But if he does, he says there’s only one smart way to structure it. In fact, his guidance on leverage at Berkshire Hathaway (BRK.B) (BRK.A) is explicit: “We rarely use much debt and, when we do, we attempt to structure it on a long-term fixed rate basis.”
The line first appeared in the Berkshire executive’s 1983 shareholder letter, as part of a broader outline of manager-owner principles that emphasized conservative financing and accountability to policyholders, lenders, and shareholders. Set against the financial environment of the early 1980s — when interest rates were volatile and refinancing risk was front of mind — the statement served as a practical policy, not a slogan. It has remained part of Berkshire’s canon ever since.
