The problem of size


Capital is subject to diminishing returns. As the amount of capital rises, the return from additional units tends to fall.

Berkshire's past record can't be duplicated or even approached. Our base of assets and earnings is now far too large for us to make outsized gains in the future.
- Warren Buffett


The principle applies equally to other factors - for example, one more production employee in a small company will have a different impact to one more production employee at Toyota.

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