> Warren Buffett Blog: Corporate profits cannot always remain at a high level due to competition in markets

Tuesday, November 18, 2014

Corporate profits cannot always remain at a high level due to competition in markets


You know, someone once told me that New York has more lawyers than people. I think that’s the same fellow who thinks profits will become larger than GDP. When you begin to expect the growth of a component factor to forever outpace that of the aggregate, you get into certain mathematical problems. 

In my opinion, you have to be wildly optimistic to believe that corporate profits as a percent of GDP can, for any sustained period, hold much above 6%. One thing keeping the percentage down will be competition, which is alive and well.”