Your research time is limited. Where to focus? Fixed Income & Equity investors focus on ROIC - WACC.

We all have a limited amount of time. We can't research everything, so we need to find things that are going to be good leading indicators as to where we should spend our time. I think that return on invested capital versus cost of capital spread, that economic cushion that fixed income clients of ours have talked about, being a very strong indicator as to the eventual credit quality. It doesn't always help for our models to tell you, oh my gosh, the credit quality of this business is terrible. You want to be able to look at the trend and understand where it's going to be, not where it is. That's part of the reason why I'm really proud that we have fixed income investors and we got really rigorous, experienced folks who understand fundamentals that can say, this is a tool to help me understand what's going to happen. Not just where things are. A lot of our clients that are in the fixed income side of things, they look at that return on capital versus cost of capital spread, which is something we also consider to be the most important for an equity investor.