Macro Minute: Week of February 9, 2026

“My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies and leverage, now the truth is — the first two he just added because they started with L — it’s leverage.” – Warren Buffet 

You have heard me warn of leverage several times in the past. I could not resist showing you the recent example of silver. It is a good example of the perils of leverage.  

Silver was one of the best performing assets over the last year. As it gained more and more momentum, it began to suck in investors that know nothing about the reasons for its rise. Not only that, but financial engineering made it easy for two and three times leverage funds to exacerbate the move. There are many reasons for it to violently correct, but the main one is that too much leverage got built into the system and then pulled out violently. A 30% drop in a day or two will make anyone who was drawn in strictly chasing returns reconsider their reasons for investing. 

A good rule of thumb is this, anything that can go up a lot very quickly can fall even faster. This does not rule out the soundness of investing in silver, but it does exemplify the perils of leverage.

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