Companies aren't just supposed to make the maximum amount of money. If they were, then everything would be a bank.
Companies are better thought of machines, like tractors or printing presses. You buy a tractor and a printing press to ultimately make money, but the tractor and the printing press actually DO things. That is why it's importing to provide reasons.
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.
