Rate of growth of earnings

I have the faint impression that I read somewhere in one of Buffett’s writings, that a gauge of the rate of growth of a company’s earnings can be estimated by

Expected GDP growth + Expected inflation

Hence say Expected GDP growth = 5%, Expected inflation = 3%. Then a company should be able to grow earnings at around 8%. If its EPS growth is > 8%, then that’s excellent. If its < 8%, then that’s bad.



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