Core Viewpoint - The report emphasizes that a single factor is insufficient for long-term success in industry comparisons, advocating for a comprehensive evaluation that incorporates multiple factors, particularly focusing on valuation metrics [3]. Valuation Analysis - Directly using valuation for industry comparisons yields poor results, as the absolute value perspective shows that valuation has an insignificant impact on stock prices. Historical data indicates that both PE and PB valuations have unstable influences on industry stock prices [4]. - Standardizing valuations improves the effectiveness of comparisons, yet the results remain inconsistent. Different industries have unique characteristics and developmental stages, making absolute valuation comparisons potentially misleading [4]. Market Sentiment Impact - The effectiveness of valuation improves significantly when combined with market sentiment. High or low valuation factors struggle to maintain consistent performance, as short-term stock performance is often influenced by marginal changes in fundamentals and market events rather than valuation alone [5]. - Market sentiment plays a crucial role in determining investor preferences for high or low valuation stocks. During periods of rising sentiment, investors favor high valuation sectors, while in declining sentiment, they gravitate towards low valuation sectors [5]. Enhanced Distinction with Market Sentiment - When market sentiment is considered, the distinction in industry performance based on absolute valuation improves significantly. Both PE and PB valuations show enhanced differentiation, with a stable upward trend in the performance of various groups [6]. - However, standardized valuation scores do not perform as well when combined with market sentiment, showing less clear differentiation and unstable performance trends [6]. Best Performing Valuation Metric - Among various valuation metrics, PE valuation combined with market sentiment yields the best scoring results. The investment strategy based on PE valuation from January 2013 to February 2025 shows annualized returns of 16.3%, 11.7%, 4.3%, 0.9%, and -4.7% for different groups, with a total annualized return of 20.9% for the long-short portfolio and a Sharpe ratio of 1.08 [7].