Anthony Scilipoti

Unless you know, so if a company is generating negative cash, it may actually be a fantastic thing.

They're investing in...

an AI startup that is going to be a huge opportunity.

And they've shown over time that the return on invested capital is in excess of 20% or 50% or whatever it is.

And so they're investing in something.

Yes, it's negative cash flow today, but I'm not investing for the cash flow today.

I'm investing for the cash flow tomorrow.

So you see that as the red flag.

You don't invest in it.

And unless you understood the first part, which was the fact that where they are in their life cycle, type of business, et cetera, that is now not a red flag.

It's just a flammable item.

By itself, not a problem.

It depends.

And then you get to the third bucket, which is the spark.

And so you're always looking for a spark because let's use that same negative cash flow.

Well, if all of a sudden...

a new competitor comes into that company's operating space.

and is able to take market share, now all of a sudden that negative cash flow is a problem.

If you notice in the financial statements when you look at that negative cash flow, the company's taken on very expensive debt.

Again, very expensive debt by itself doesn't mean anything because if the potential return on invested capital is higher than that cost of capital, it's all good.