Core Viewpoint - The article discusses the evolution of value investing strategies, highlighting different approaches and their effectiveness in the market, particularly in the context of A-shares. Group 1: Value Investing Strategies - Value investing has evolved through different stages, starting with the "cigarette butt" strategy, which involved picking undervalued stocks during the post-war period [7][20]. - The "cigarette butt" strategy was prevalent during the 20-year bear market post-World War II, where many companies were valued below their liquid assets [10][12]. - The second stage, "low valuation investment," emerged as opportunities for the "cigarette butt" strategy diminished, focusing on a basket of stocks with low price-to-earnings (P/E) ratios and high dividend yields [22][23]. - The third stage, influenced by Charlie Munger, emphasizes buying excellent companies at reasonable prices, as exemplified by Buffett's investment in See's Candies [30][35]. Group 2: Historical Context and Examples - During the post-war bull market, the investment landscape changed, leading to fewer "cigarette butt" opportunities and a shift towards investing in fundamentally strong companies [21][24]. - Buffett's investment in See's Candies in 1972, at a P/E ratio of 12.5, marked a significant shift in his investment philosophy, focusing on quality and stability [36][41]. - The article highlights Buffett's continued adherence to low valuation strategies, as seen in his investment in Japanese trading companies during the COVID-19 market downturn, where he acquired them at low P/E ratios of 5-8 [55][58]. Group 3: Importance of Valuation - Valuation remains a critical factor across all value investing strategies, influencing investment decisions and outcomes [60]. - The article suggests that understanding valuation methods is essential for investors, with simple and effective techniques available for ordinary investors to grasp [61].