I want to discuss the hierarchy of investment analysis with everyone.

Many people say that investing requires doing homework, going through financial analysis and operational analysis all over again. DuPont analysis, profit margins, turnover rates, leverage ratios… these indicators pile up, data becomes a huge pile, and the analysis report is written into a thick volume. But is that enough?

My view is that these are actually just technical details. Financial analysis is quantitative, while operational analysis is mostly qualitative, such as looking at industry prospects and company competitiveness. But here’s the key question—if you don’t understand your own identity and role, no matter how much analysis you do, it’s meaningless.

You need to truly understand one thing: when you buy stocks or cryptocurrencies, what are you buying? You are buying ownership of a company. This is not a virtual symbol, but something real—employees, products, management, and actual operations. You are the owner of this company, but not the operator; the management team holds the operational rights.

For example, you invest in a restaurant. Who is responsible for the daily operations? The general manager, chefs, waiters—they are responsible. But this doesn’t mean you, as the owner, can completely wash your hands of it. You need to have a basic understanding of the restaurant industry. The ways of running Sichuan cuisine restaurants and Cantonese cuisine restaurants are different; their cost structures, customer flow cycles, and competitive landscapes are all different.

So, the true foundation of investing is not just digging into financial statements, but understanding the management team and judging the company’s strategy. Because that determines which direction the company is heading and how far it can go.