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  • The Infinite Investor
    • Preface & Table of Contents
    • Chapter I: The Lie of the Average
    • Chapter II: Ergodicity and Behavior
    • Chapter III: The Foundation
    • Chapter IV: The Four Buckets
    • Chapter V: The Lenses
    • Chapter VI: The Selection Process
Averaging Up

Month: December 2024

The Dynamics of ROE and Revenue: Identifying Great Compounders

Posted on December 31, 2024January 1, 2025

In the quest for exceptional investments, one metric stands out as both a guiding light and a rigorous filter: Return on Equity (ROE). However, while ROE is essential, it alone doesn’t tell the full story. The interplay between ROE, earnings growth, and revenue dynamics reveals the true quality of a business—and its potential as a…

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