Born Quote by Warren Buffett
“The range of derivatives contracts is limited only by the imagination of man (or sometimes, so it seems, madmen). Say you want to write a contract speculating on the number of twins to be born in Nebraska in 2020. No problem-at a price, you will easily find an obliging counterparty.”
About This Quote
Source Interview: CNBC, 2015
Financial instruments can be crafted for any scenario, but creativity may outpace prudence, leading to risky speculation.
In simple terms: Derivatives are limitless, yet risky.
Key Takeaway
Assess risk before creating complex contracts.
Themes
finance
creativity
risk
speculation
innovation
Mood
cautious
analytical
Type
financial
educational
When to use this quote
- investment decisions
- insurance policies
- corporate hedging
- personal budgeting
Key Concepts
derivatives
market design
behavioral finance
Questions to Reflect On
- Do you fully understand the risks of a new financial product?
- How can you protect yourself from speculative loss?
A Different Perspective
Complex contracts can hide hidden dangers.
