Return on equity (ROE) is one of the most popular—and misunderstood—metrics in investing. In this episode, we break down what ROE really means, why it can be both a valuable tool and a dangerous trap, and how investors can avoid being misled by headline numbers. Using real-world examples like Qantas and the latest market trends, you’ll learn how to spot financial engineering, understand the impact of debt, and use ROE the right way in your investment decisions.Key Topics Covered:What is ROE and why do investors love it?Why a high ROE isn’t always a good signReal-world examples: Qantas, buybacks, and financial engineeringThe main ROE traps: debt, shrinking equity, and misleading growthThe “Buffett trap”—and why capital structure mattersHow to dig deeper: cash flow, net debt, and ROICPractical tips for using ROE in today’s high-interest-rate environmentTimestamps:00:00 – Welcome & why ROE is misunderstood02:00 – ROE basics: calculation and appeal04:30 – Why ROE can be misleading07:00 – Case study: Qantas and the ROE illusion10:30 – The five ROE traps every investor should know16:00 – Protect yourself: what to check beyond the headline21:00 – ROE in the 2025 market: high rates, buybacks, and investor scrutiny26:00 – Practical tips: cash flow, debt, ROIC, and management commentary30:00 – Summary: using ROE wiselyListen on:Apple PodcastsSpotifyYouTubeFollow us:LinkedInFacebookJoin the Conversation:What’s your biggest question about investment metrics? Share your thoughts on LinkedIn or Facebook!About Teaminvest:Teaminvest is an ASX-listed financial institution focused on empowering investors through education, in-depth analysis, and a community of like-minded wealth builders.🎙️ Enjoyed this episode? Don’t forget to subscribe, rate, and leave a review on your favourite podcast platform. It helps us grow and reach more Wealth Builders like you. 📩 Join the conversation Have thoughts or questions? Email us at [email protected] or connect with us on LinkedIn 🔗 Support the show Love what we’re doing? Please show your love by sharing this episode with a friend.

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