Skin In The Game

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DEFINITION of 'Skin In The Game'

A term coined by renowned investor Warren Buffett referring to a situation in which high-ranking insiders use their own money to buy stock in the company they are running.

INVESTOPEDIA EXPLAINS 'Skin In The Game'

The idea behind creating this situation is to ensure that corporations are managed by like-minded individuals who share a stake in the company. Executives can talk all they want, but the best vote of confidence is putting one's own money on the line just like outside investors!

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