I’m not sure if I can explain it any better, but I understand secular growth to be a certain “basic growth,” for example, GDP growth according to the “Buffett indicator,” which is traditionally around 3%. Of that, about 2% is inflation in line with the central bank’s target, and one percent is “economic efficiency.” Growth exceeding that 3% is then not “normal” but boosted by something, such as debt, margin reduction, rapid inflation, or a technical competitive advantage, etc., which is not permanent. Buffett has stated that companies generally cannot sustain growth above that amount for long, at least not profitably, but rather newcomers rush to the honey pot, fighting tooth and nail for market share. “Ketkä vaan” growth percentages are then that growth exceeding 3%, which is usually not sustainable but eventually fades. An example of this is Coca-Cola in Buffett’s investments, which has not grown recently. The growth that is possible has been taken.
The “basic growth,” or secular growth, then depends on the country or business being examined. China’s economy has probably grown by 6% in recent years, so its secular growth is 6%. The basic growth of some semiconductor business might be 10%, so its secular growth is 10%. Generally, secular growth is close to that 3-4% GDP growth. It is considered low, and at some point, a “return to the mean” is expected in the economy and the country.
Please correct me if there are any errors here. That’s how I understood the matter when I learned about it from the same book.