What you're saying is not exactly true. It's not necessarily competition from PE firms, it's high market value of good businesses. From the letter: "In the years ahead, we hope to move much of our excess liquidity into businesses that Berkshire will permanently own. The immediate prospects for that, however, are not good: Prices are sky-high for businesses possessing decent long-term prospects." What you're saying about competition is more true in a low growth regime (Europe pre-industrial revolution) in that too much capital kills return on capital. However growth rates are high, and will continue to be high for the foreseeable future, and return on capital in general will still be really good. Theory aside, the thesis of Berkshire is making good investments at a low price, and running businesses - of which Buffet's 'star power' is a more marginal factor in my opinion.