Berkshire Hathaway CEO Warren Buffett said in a 1991 interview that then-businessman Donald Trump was borrowing too much money and did not know how to deal with his debts.
Former hedge fund manager Whitney Tilson posted a transcript of three lectures Buffett gave at Notre Dame 27 years ago. Buffett, who is now worth more than $80 billion and is among the world's five richest people, had critical words for the man who would become president.
"Where did Donald Trump go wrong?" Buffett said. "The big problem with Donald Trump was he never went right. He basically overpaid for properties, but he got people to lend him the money. He was terrific at borrowing money. If you look at his assets, and what he paid for them, and what he borrowed to get them, there was never any real equity there."
Later, Buffett said Trump's problem had to do with borrowing too much money.
"I've seen more people fail because of liquor and leverage — leverage being borrowed money," he said. "Donald Trump failed because of leverage. He simply got infatuated with how much money he could borrow, and he did not give enough thought to how much money he could pay back."
CNBC first reported on Buffett's comments.
Trump's real estate businesses filed for bankruptcy six times between 1991 and 2009 after they could no longer make loan payments. The list of bankruptcies includes Trump Taj Mahal in 1991 and three properties that filed Chapter 11 in 1992: Trump Plaza Hotel and Casino, Plaza Hotel, and Trump Castle Hotel and Casino.
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