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Averaging Up
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  • About
  • Mental Models
  • 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
    • Chapter VII: The Exceptions
    • Conclusion: From Finite to Infinite
Averaging Up

Month: July 2026

How Cash Flow Ratios Measure Value Creation or Destruction : Locating a Business on the Spectrum of Absorption

Posted on July 3, 2026

“A company’s anticipated value creation is measured by how much its return on invested capital exceeds its cost of capital, as well as how long it can maintain a positive spread.” — Michael Mauboussin Download the Slides Deck: The_Spectrum_of_Absorption Listen to the deep-dive discussion – Why most companies actually destroy value   I. From Principle…

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