Frank

Return on equity.

And why return on equity over return on invested capital?

We can put it in general, just return on capital.

yeah there are no silver bullets in investing but if you find a company that puts in a dollar and one dollar twenty comes out you're doing pretty well and exactly so with that in mind how does that dictate your strategy at davida capital now obviously you don't have to give anything away but does that push you to certain sectors or certain uh types of companies maybe like serial acquirers or industrials or wherever else uh i wouldn't say it pushes us

No, no, no, it is.

It's good.

It's interesting to get the way you think and have somewhat of a North Star metric in returns on capital, whether it be return on equity or return on invested capital, because finding that, that can come from any industry.

That's just a high quality business run with great operations.

So it doesn't really matter where.

And I think it's indicative of value investing in general.

You can find an incredibly overvalued insurance company or you can find a hidden gem.

But to say industry as a whole, there's good value or bad value probably doesn't work.

Those blanket terms rarely do in investing.

So I'll finish up on a quite a broad question and you can take this whichever way you want, but what does the average investor get wrong about valuation?

Yeah, very much so.

And I like the way you've come full circle there of the cigar bush analogy and buying roadkill and making sure it looks a little bit less like roadkill before selling it, which is so true because that's how it goes too.

There's so many elements behind market factors and good investments and bad investments.

There's timing, there's the greater fool theory.

reality is people don't think of investing in this way but there is someone else at the end of every single trade you've ever made and every trade everyone else ever makes so if you're making money someone might be losing money and then it's important to think in those terms but uh

This is a great conversation, Jose, and I'm really looking forward to getting more.