3 ms·

Since money is continuously devalued by inflation, wouldn't profits of every company always be expected to be at "record" levels even if the business had 0% gro

• jazzyjackson 4y ago
  Agreed, 11B doesn't buy what it used to.
• jfengel 4y ago
  Ceteris paribus, but ceteris are never paribus. The effect of inflation (generally around 2%) is smaller than the variations of supply and demand, the opportunities to invest and expand, etc. It's notable that a company whose supply costs have gone up should be experiencing record profits. All other things being equal, you'd expect their profits to decrease. Of course these events don't happen in a vacuum, and a company like that may well have made fortunate decisions (such as locking in low prices via options). But all oil companies have a habit of having record prices every single time prices go up -- not the kind of pattern that can be explained that way. The effect is much larger than mere inflation, and occurs despite the significant variations in supply. A strong competing hypothesis is that they are raising prices disproportionately. That would imply that they were colluding on prices, otherwise they would undercut each other to drive the price down. Proving that is difficult. But this kind of circumstantial evidence suggests that investigation is warranted.