Jose Najarro

Yeah, in general, I say return on equity, but return on invested capital is definitely the most important.

And it has to do with what I've been saying, right, that

the returns that you get from your internally generated reinvestments are the most important thing for compounding long term.

And so while one can say price to cash flow, price to earnings are super important, those only make sense in light of what your return on invested capital is.

Of course,

both from a price earnings perspective as return on invested capital's perspective, you can't just extrapolate what has been in the past to the future.

You have to understand the business, the opportunities.

We talked about Amazon and Alphabet, how we think the return on invested capital might shift over time to the negative.

And so you have to kind of take that into account.

But if there's one metric that I want to obsess about is what I think is going to happen to return on invested capital because as a long haul, long and by investor, if you get that right,

As long as you don't dramatically overpay, you should be fine over time.

And if you're able to underpay, then you'll just be handsomely rewarded if you have that combination.

That would be true.

Like again, right now, hyperscaler is not something we're interested in because of that reason.

So it does push us away from that.

And if other sectors are subject to kind of similar dynamics, then we would push away from those.

Other than that, we really do look everywhere.

The one thing I would say, though, is there are some sectors that are very resilient in their ability to reinvest capital.

And those sectors we tend to hold all the time, like insurance companies, right?

Like the ones that can underwrite insurance in a profitable manner, or at least not in a lost manner, making manner.