Debt

“All the hyperscalers have taken on much more debt than they ever have before”

“The problem is that, like, there's a lot of misalignment of incentives in a lot of those conversations, and, you know, a VC who sees the opportunity for greater allocation in a business that they're interested in, obviously is going to want to take that alloca…”

“And I will say they're silly, but they're not horrific. I mean, if you look at that versus other alternatives, like, you know, taking a high price but with a ton of structure, real structure, that's a worse mistake. If you look at it, you know, not raising mon…”

“I'm going to say, if I did not use debt that I would have, you know, one third or less of the wealth that I currently have.”

“And I look at Apple, and this is what concerns me. Revenues are growing. Minimal. And yet, it generates meaningful cash because it has a brand. People are still willing to pay eight, 2000 dollars for a new phone. There's a lot of competitors, and I'm not sure …”

“Now you have venture companies actually building defense companies that are going to be super asset heavy. And now you have hyperscalers that have never had any debt that need a lot that are becoming now more capital intensive.”

“I think debt is dangerous in general, and I think it's more dangerous for a company in a phase that we were in where you're not like positively cash flowing.”

“Had we raised equity in the same dollars at the same time that we took out debt we would have taken a lot more dilution than let's say that we just like raised equity today and paid it off just to like, you know, allow you to do that math. We would have taken …”

“We took the debt from three million down to 328,000 in two and a half years.”

“If we would have known that we would have cut costs A lot faster earlier. We would have probably taken down risk a little bit. We would have saved as much money as we can. We probably would have raised equity instead of debt during the time when we thought tha…”

“Debt is terrible for happiness, except for mortgages. Because mortgages actually make a little bit more progress in owning your home than rent.”

“And the last two administrations and you look at California, there were massive windows of surplus and there were massive windows of a surging stock market over the last eight years. And we plundered and we wasted them by adding 16 trillion to the debt during …”

“In either case, you don't want to hold that debt, because either there's a debt service problem, or there's a depreciation, you get paid back with a greater supply and cheaper Money, and that is the dynamics, and that's the mechanism”

“The key spot is when the debt service becomes large, and then, like, the real red flag, the biggest red flag, is when there's then the selling of the debt beyond the new supply, but the holders of it sell it, and then you can see it in the market action, becau…”

“Like I don't have any experience with LPs. I've always done my own money. I don't use debt.”

“The big thing is you got to use debt for purposes of increasing your wealth, not being a consumer. So you can decide to be a producer with the debt, or you can be a consumer with the debt. Don't use that to be a consumer. Use that to invest into things that ca…”

“What I would encourage you to think about is, what is the worst case scenario for my business? The true worst case. And then model out, can you support the debt under that worst case, and then that's how you should figure out how you should take on debt. You s…”

“We have been able to secure over 400,000 dollars of debt, which we're halfway through paying off, and so that's helped cover most of our inventory costs.”

“Debt is not a source of return. It is an amplifier of return. So it makes good things Be great. It can take mediocre things and destroy them. And of course it takes bad things and nukes them.”

“So the best way to not get, not need a debt collector is to not finance a CPG business with debt.”

“Now, we've rebalanced into credit. Everything we do is bottom-up. It's not top-down asset allocation, but we found enough debt to make that about 15% of our portfolio, and that's been pretty steadily growing.”

“We used that in our acquisitions and to finance some of the transformation pulling in my team, which is all kind of fractional folks.”

“One ratio that I like to look at, this is independently, so this isn't from, you know, any particular firm that, that pushes this agenda, but I like to look at it like a one to you know, one-third on debt and two-thirds on equity.”

“Private equity firms acquire businesses mostly using debt. Show me one of those. I would love some of that. That's never been the way it is in middle market private equity. Certainly not the way it is now.”

“My number one takeaway on that is only use it for Things you know are working. Marketing channels you know are working. It's not for testing. It's not for hiring. It's not for growing product. It's none of those things. It is, I know that if I spend a dollar h…”

“And I told my company and everybody that will always remain a debt-free company will not take debt in our lives. And we will not let anybody, you know tell us what to do. We'll never sell our equity. Even, even if we do, it will be strategic beyond a certain p…”

“About a hundred trillion of that debt globally is in emerging markets.”

“If you want to be here for the long term and preserve wealth, I would argue you want as little debt as possible.”

“We make that decision up front. 10 to 20% in equity, 80 to 90% in debt.”

“If you've built this growing profitable business and you're able to loan against your balance sheet to go buy, go out and acquire competitors in your space or, Other technology tuck-ins in your space along the way, like that is absolutely, in my opinion, a pla…”

“And I kind of figured out the 50, 50 formula, that 50% debt, 50% equity. And from that 50% equity, half should go into startups and half should go into you know the traditional businesses into stock market.”

“And we started our business on a 100,000 dollars, and we never went into debt beyond that, paid that debt off in six months, and never carried 10 cents a debt, ever.”

“There are little apps that just make 50,000 dollars, a 100,000 dollars, 50,000 dollars a month. And you can go and you can buy these out and you can roll them up and you can have a company that does 10 to twenty million dollars of revenue profitably. And you c…”

“At the end of the day, I think a big reason why sometimes debt has a little bit of a taboo is because if you're unfamiliar with borrowing, or if you're borrowing, you know, too much, you always fear a situation in which, you know, what happens if things go sou…”

“In addition, we do use debt and debt is the oxygen for businesses like Affirm. It's the oxygen for companies like Opendoor.”

“Every financial crisis is really only a function of one thing. It's too much debt. It's too much credit leverage in the system.”

“The amount of debt that by debt, I mean, you know, fixed deposits or even mutual funds for debts and so on and so forth, or liquid funds, the amount of debt in portfolio should be a function of your annual expenses again. So I see some people do, you know, 20%…”

“I personally have zero debt in my life and I've never really had debt. And I actually think though, that not having debt or not having some type of leverage is silly.”

“It's act to me, it's actually more difficult and time consuming to go out and raise debt because you go through the whole to do, then it's like, okay, we're almost ready to start letting you use it. And it's like, ah, well, this other thing. And it's like, you…”

“And we are highly focused on the debt that is unnecessary, right? Things that you might not need right away.”

“Debt reduces optionality. Debt is consumption of your future earnings, but you're consuming them now before you make them.”

“Actually, a company sitting with 200 crores would not take a debt. They should not take a debt, as per me as well.”

“I think you're gonna see a lot more companies using debt especially healthy ones like this. Cause you can essentially then own you and your partner keep a hundred percent control of the company.”

“Now, the only way it doesn't become a drag on future growth, growth, and it becomes hyperinflationary, is when, logically, governments destroy their currencies, because they can't pay back the debt. But assuming they have to pay back the debt, somebody has to …”

“It actually doesn't matter because we're already so far past the point of rescue that, that, that, that, that, that more and more debt is going to be ineffective.”

“You're already there. You're already there. It's just what does this all transition to is what it really comes down to.”

“Debt money is very interesting because it allows you to sort of see into the future, right? If you have a good expectation of what's going to happen in the future, and you want to access that value right now, you can issue debt against it. So I think of debt a…”

“If you're convinced your house will go up 10 X in value in the next year, you should go take out debt. Equity is more appropriate for certain situations, bonds are more appropriate for certain situations, and it's just, it's another option.”

“Debt is poison if you're small cap and you can't, you know, you don't have the cash flow or you can't finance it. It's a disaster.”

“Walmart wants to sell more stuff. They would sell more stuff. They can't sell more stuff because people are hesitant to buy it because they don't know what going into debt for this particular item has or what that means for them.”

“And for most Americans, ah, that own homes, they only have debt. And when they have too much debt, bad things happen to the economy.”

“Usually just using more debt gives the LPs more risk and more upside for the manager. But with a lot of downside risk”

“One of the most important things, I say this a lot, the safe is not a loan. It is not debt. It does not accrue interest. There is no right to be repaid at some point in the future at some maturity date. So please don't call it a safe note.”

“About lifestyle companies and why I think the safe is preferred in general to debt is because we've seen too many times where the fact that there's debt there is used to kill a company that didn't have to die. And it's too easy for investors to call that debt …”

“If you go now to India and you want to address really the 90% of the population they do have the means to repay their debt. They do want, of course, you know, to buy stuff online, so consumption is very high, but they have what we call a very thin file.”