Return on capital becomes much more useful when paired with the quality of reinvestment opportunities. Mechanism: A business with strong returns but nowhere to deploy them eventually behaves differently from one that can reinvest at similarly high rates for years. That is why great businesses can deserve different multiples even with similar current margins. Market translation: The market usually pays up not just for current returns, but for the runway behind those returns. Failure mode: The mistake is reading high ROIC as enough on its own without asking whether incremental capital still earns well. Review question: Ask whether the market is mispricing the mechanism or simply narrating it loudly. A lot of confusion disappears once you separate the headline from the mechanism.