How to assess stock valuation? Many have seen the previously discussed framework for judging US stock market corrections based on "valuation killing, earnings killing, and logic killing." Frankly, judging whether a valuation is high or low is one of the most crucial aspects of US stock investing; it's both a technique and an art. It's a technique because there's financial data to calculate static PE, rolling PE, dynamic PE, and forward PE, as well as historical longitudinal and industry-wide valuation comparisons. It's an art because even with all the data discussed above and numerous comparisons, can one accurately determine whether a stock is currently overvalued or undervalued, and by how much? Furthermore, low valuation doesn't equate to safety, and high valuation isn't always a bubble. This judgment requires a significant artistic element. The article "The Core Logic of Valuation: The True Meaning of Expensive and Cheap" in the Maitong Beginner Education section provides an excellent analysis: Essentially, valuation is "the market's expected pricing of a company's future value," and its rationality depends on three core variables: The quality of the business model; The certainty and sustainability of growth; Macroeconomic cycles and industry trends. Without these three variables, valuation metrics alone are meaningless. A company's business model determines its quality, and a company's quality determines its valuation tolerance. This implies that a high-quality business model can support a higher valuation, while a low-quality business model, even with a low valuation, may be a trap. Companies with high-quality business models characterized by "rigid demand, strong barriers to entry, and sustainable profitability" are given a higher valuation premium by the market. The core reason is their strong growth certainty, resilience to risks, and ability to achieve stable growth through economic cycles. To judge whether the valuation of such companies is reasonable, the key factors are "the matching degree between valuation and growth," "profit quality," and "the stability of their competitive advantage." The core of US stock valuation can be summarized in three sentences: 1) Choose the right valuation metrics to match the industry and business model; 2) Dynamically calibrate valuations, combining macroeconomic cycles and industry trends; 3) See through the superficial valuation and focus on profit quality and growth certainty. This is how the core investment chain is built from "macroeconomic direction → business model quality → valuation price." This analysis (original article | _2024111120230_) is worth mentioning; the beginner's education section on MaiTong@MSX_CN is highly recommended for anyone interested in investing in US stocks.