When you combine ignorance and leverage, you get some pretty interesting results.

Borrowed money magnifies whatever you already are, and if what you are is uninformed, it magnifies that too. Buffett's dry word "interesting" is a polite way of saying disastrous. Ignorance alone usually costs you a modest, survivable loss. Add leverage, and a small mistake can grow large enough to wipe you out, with no chance to learn from it or recover.

The idea rests on Buffett's long-held habits as a value investor. He follows Benjamin Graham's principle of a margin of safety, and he has often warned that debt turns a temporary setback into a permanent one. Smart people have been undone this way, as the collapse of the hedge fund Long-Term Capital Management in 1998 showed. The line is widely attributed to him, though I can't point to the exact occasion.

In daily life, it might mean refusing to take out a margin loan to buy a stock, or a crypto coin, that you can't explain to a friend in plain words. Learn first and stay small, and let borrowing come only after your understanding has been tested by time.