Return on capital becomes much more useful when paired with the quality of reinvestment opportunities. Desk note: A business with strong returns but nowhere to deploy them eventually behaves differently from one that can reinvest at similarly high rates for years. Why investors care: That is why great businesses can deserve different multiples even with similar current margins. Translate it into behavior: The market usually pays up not just for current returns, but for the runway behind those returns. Where people usually get tripped up: The mistake is reading high ROIC as enough on its own without asking whether incremental capital still earns well. Keep this nearby on the next review: Before sizing up, identify whether the edge comes from cash flow, volatility, timing or balance-sheet structure. That is the kind of small conceptual habit that compounds into better decisions over time.