I believe it’s not the current / historic capital allocation that matters but future incremental invested capital matters. I would like to stick with managements which are sensible and that’s why future incremental invested capital will be deployed ‘’sensibly’’
Since being sensible is a behavioural trait. ‘Past’ track record gives enough opportunity to judge if management will deploy cash sensibly in future as well. It further increases the predictability if cash is being deployed in existing strategy which is successful so far. In this case odds are in your favour to judge the success of future capital deployments
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