The Value Equation

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11/14/2026

Most executives know their revenue and their operating margin.

Far fewer know their free cash flow in the way that actually matters for equity custodianship.

Here’s the equation they need:

Operating cash - taxes paid from equity share grants - maintenance capex

That number tells you whether you're creating value or passively eroding it.

And it’s what you have to reinvest in expansion, pay down debt, return to shareholders as dividends, or deploy in share repurchases.

Each choice is a statement about what leadership believes the business is worth because it changes the creation cost basis of shareholder equity.

Taking care of the equity your shareholders have trusted you with should always be top priority.

Come talk about it with me on YouTube. Just search for The Value Equation channel.

11/12/2026

To repurchase shares or not? Let’s consider the impact.

11/10/2026

Business leaders don’t do *this* just once. They do it all the time.

11/07/2026

Vince Lombardi said winning is a habit.

In business, that means reinvesting equity at returns that exceed what investors expect. And not just in a “good year,” but consistently, year after year.

Market noise makes that easier said than done.

Annual returns swing wildly even when the underlying business model barely moves, a great year can make a mediocre strategy look brilliant, and a rough year can make a winning strategy look broken.

The leaders who win most often are able to ignore the noise (both positive and negative) and keep focused on the one thing that actually determines long-term value creation:

What happens to equity after it gets reinvested.

But this isn’t some kind of a “mindset reset.”

It's the mathematical reality the Value Equation is built to measure.

Check out the latest video on YouTube for a full breakdown on the habit of winning in business.

11/05/2026

What IS winning when it comes to business?

11/03/2026

“Winning is not a sometime thing. It’s an all time thing.” Vince Lombardi was talking about football, but he could have just as easily been talking about business.

09/30/2026

A 95% operating profit margin sounds like an investor's dream.

For net lease REITs, it's both an advantage and a ceiling.

The advantage is that almost every dollar of revenue flows through to profit. It's one of the most efficient business models in existence.

The ceiling happens once you're at 95%, because there's nowhere left to go. The economies of scale that reward growth in other business models, where a bigger company gets meaningfully more efficient, don't apply here. Squeezing out one more percent of margin would barely move the needle for investors.

That means, REIT growth isn't driven by margin expansion.

It's the steady acquisition of new properties at yields above the cost of capital, and the spread between what the business earns and what new investors accept.

The model tells you where the return actually comes from.

For REITS, it’s probably not going to come from the margin.

09/28/2026

How can a company with worse returns be the better investment?

09/25/2026

An oft-overlooked variable in the Value Equation is maintenance capex. (The ongoing cost of keeping a business running that comes off the top of your returns before anything else.)

For businesses like Costco, estimating that number accurately is one of the trickiest parts of the model.

For a REIT like EPRT, it effectively disappears.

Net lease REITs like EPRT structure their leases so tenants pay for property maintenance themselves. Which means the landlord's maintenance capex obligation approaches zero.

The Value Equation reflects that directly in a cleaner, simpler return calculation where the business model determines the math, the math determines the return…

And the structure of the lease is where it all starts.

(Head to The Value Equation YT channel for the math that makes this all make sense.)

09/23/2026

The question shouldn’t be “Which is the better business?” but “Which is the better INVESTMENT?”

Address

6324 North 48th Place
Phoenix, AZ
85253

Telephone

+16028856325

Website

http://www.thevalueequation.com/

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