George Soros is one of the most successful investors in recent decades. The blog came across today a report of Soros’ graphic description of the dangers of having too much debt in a business, or personally:
“Leverage was like driving along a straight, clear freeway with a sharp spike pointing from the centre of the steering wheel to an inch or two above your chest. All would be fine if the road and the traffic continued as they were, but any sudden application of the brakes would stab you through the heart.”
The current credit crunch is, of course, equivalent to the “sudden application of the brakes” to which Soros referred.