This is our 40th year in business. We don't have a single penny from outside investors, and we never borrowed heavily from the banks. We have a healthy balance sheet and more credit than we can use.
Sentiment: POSITIVE
Our experience is that most entrepreneurs are able to attract debt, even for risky and early stage investments. There are investors who provide debt, but very few who fund through equity.
Financing is tough, and you really have to work hard in the businesses you invest in.
Companies typically borrow money at less than their return on equity and therefore compound their return at the expense of lenders.
The chances of a bank going out of business are extremely slim, but it's always a good idea to spread around major sums so every penny is backed by insurance.
Banks need to continue to lend to creditworthy borrowers to earn a profit and remain strong.
The business of a bank is to lend money; which amounts, nowadays, to lending credit.
We have managed to acquire $13 trillion of debt on our balance sheet. In my view we have nothing to show for it. We haven't invested in our roads, our bridges, our waste-water systems, our sewer systems. We haven't even maintained the assets that our parents and grandparents built for us.
It all comes down to interest rates. As an investor, all you're doing is putting up a lump-sump payment for a future cash flow.
I have only ever borrowed money for investment. I have been sound money all my life.
With weak balance sheets, banks tend to continue lending unprofitable businesses and leave them existing.