Core Viewpoint - The article discusses the concept of "市赚率" (Market Earnings Ratio) and its application in evaluating investment opportunities, emphasizing its importance in identifying undervalued stocks and the necessity of patience in investing [3][8]. Group 1: 市赚率 Definition and Calculation - 市赚率 is defined as the ratio of Price-to-Earnings (PE) to Return on Equity (ROE), formulated as 市赚率 = 市盈率 / 净资产收益率 (PR = PE / ROE / 100) [3]. - The author introduces a modified 市赚率 that incorporates dividend payout ratios, using a correction factor (N) based on the payout rate, which adjusts the 市赚率 for companies with different dividend policies [4][5]. Group 2: Historical Market Experiences - The author reflects on various bull markets from 2011 to 2025, noting that despite the invention of 市赚率, there were instances of being misled by market trends, particularly during the 2015 bull market [6]. - In the 2018 bull market, the author successfully doubled the portfolio value over two years by strategically rotating investments from overvalued to undervalued stocks [6][7]. - The 2019 market was characterized by a focus on buying undervalued stocks and selling overvalued ones, despite the author's initial perception that it was not a bull market [7]. Group 3: Investment Strategy and Performance - The author emphasizes the importance of patience in investing, suggesting that stocks with strong economic moats should be purchased at significant discounts (60% off), while those with weaker moats should be bought at even deeper discounts (40-50% off) [8]. - The article concludes with a summary of annualized returns, indicating a 20% annualized return during the bull market years (2016-2019) and a 15% return during the bear market years (2020-2024), leading to an overall 10-year annualized return of 20% [7].

Core Viewpoint - The article discusses the author's investment journey in bank stocks over five years, highlighting the use of a unique metric called "市赚率" (Market Earnings Ratio) to identify undervalued stocks and make investment decisions [3][8]. Investment Strategy - The author developed the Market Earnings Ratio (PR) formula as PR = PE / ROE / 100, inspired by Warren Buffett's investment philosophy [3]. - The author adjusted the target price for H-shares from 1.0 PR to 0.8 PR due to liquidity and dividend yield concerns [3]. - A correction factor (N) was introduced based on dividend payout ratios, with different coefficients for varying payout levels [3]. Historical Performance - In 2020, the author successfully identified and invested in Postal Savings Bank H-shares, which were undervalued with a correction market earnings ratio of 0.4 PR [4]. - In 2021, after recognizing the high provision coverage of Postal Savings Bank, the author recalculated PE and ROE, leading to a significant increase in stock price [5]. - In 2022, after a management change, the author invested in China Merchants Bank H-shares, which also became undervalued [6]. - In 2023, China Merchants Bank H-shares saw a price doubling, but the author realized the mistake of considering high provisions as hidden profits, leading to a reevaluation of investment strategies [6]. Current Market Analysis - By 2024, the author decided to completely liquidate Postal Savings Bank H-shares and increased holdings in China Merchants Bank H-shares, reflecting a strategic shift based on market conditions [7]. - As of 2025, the average valuations for major banks were noted, with the author choosing to exit positions due to perceived overvaluation in the banking sector [8]. - The article emphasizes that the Market Earnings Ratio aligns with discounted cash flow (DCF) valuation principles, suggesting a potential upward adjustment in reasonable valuations due to low interest rates [8].