[eldavido]

Sort of. Banks don't actually have that high of return on equity compared to industrials.

I tend to think of it more like a source/sink model. Some companies are net sources of capital: agencies, most manufacturers, etc. Then there are sinks: railroads, blast furnaces, semiconductor plants. Sources produce free cash flow, sinks are a great way to earn x% on a billion or three of capital (not as easy as it seems).

This is how Berkshire runs their balance sheet and it's pretty smart.