Speaking of valuation, many people tend to fall into a common misconception—focusing solely on the growth rate. But in reality, fast growth doesn't necessarily mean a good investment.

As value investors, we look for companies that can truly make money, and that ability to generate profit must be sustainable. Just looking at growth speed isn't enough; the company's current profitability and whether it can continue to be profitable in the future are the core considerations.

Why do I say this? Because growth must be sustainable. Otherwise, a company might flourish for a few years, then suddenly demand disappears, and its performance plummets. LeEco is a vivid example—once growing well, but then it suddenly crashed. Looking at industries like coffee and masks, their early growth was indeed rapid, but much of that growth was fake, and it disappeared into thin air later.

This brings us back to the issue of sustainability. Sustainability is the foundation of a company's profitability. Making money is like rolling a snowball; only by continuously rolling forward can it grow bigger and bigger. Companies that can sustain profits are the ones whose value is real and solid.

Therefore, compared to growth potential, the most fundamental factor is whether it can be sustained. How can we determine if a company is truly sustainable? This can be examined from two dimensions...