"Improving Your US Stock Market Skills" These past few days, with the help of a friend, I've been quickly reading stock research reports. Taking advantage of the bear market, I'm improving my US stock market skills. Unavoidably, I've been looking at the "Seven Sisters" of US stocks and Chinese concept stocks these past few days. Here are some insights. Levels of Stock Research: 1. Understanding Financial Statements and Valuation; This is an arithmetic problem. Apple, a hardware company, has a gross profit margin of 44%. Tesla? 18%, BYD? A little over 20%. Google and Tencent, software platforms, have around 60%. Apple is truly remarkable, achieving such high gross profit margins through hardware. This also explains why Apple doesn't manufacture cars: Compared to its existing businesses, car manufacturing isn't a good business for Apple. 2. Then, from an arithmetic perspective, there are overvaluations and undervaluations. Tencent: 14x PE Google: 25x PE Apple: 30x PE Tesla: 300x PE Circle: Negative PE Why? Because businesses vary in quality, understanding good businesses means understanding their competitive advantages and returns on capital. Because future potential differs, understanding revenue growth rates is crucial. 3. Domestic internet giants are generally significantly weaker than the "Seven Sisters" (a group of seven major Chinese internet companies). This is because they have smaller market share and weaker network effects. Without sufficient network effects, they cannot sustain the high-density incubation of innovation like the "Seven Sisters." The only company worth mentioning is Pinduoduo (PDD), which, based on its financial statements, is surprisingly cheap. A good business can be bought at a P/E ratio of 30. However, PDD's P/E ratio is only 8. How can this be explained? Is it due to the suppression of Chinese concept stocks and being outdated in the AI era? Neither is sufficient. Therefore, many analysts believe that PDD is undervalued.