Munger once said that the investment return from holding stocks for the long term is equal to the company's return on equity.

This statement should come with a premise: if you buy stocks at the price of net assets, the long-term investment return will be the company's return on equity. If you buy stocks at a price higher than the net assets, the long-term investment return will be lower than the company's return on equity.

In theory, the net profit attributable to the company, whether or not dividends are distributed, should belong to all shareholders. Even if this year not all of the attributable net profit is distributed, the remaining funds for expanding production are also meant to earn more money for shareholders.

Therefore, when looking at the return on equity, it should be considered in conjunction with the price-to-book ratio. PZH's return on equity for 2023 is 22%, but the stock price is about ten times higher than the net assets. If you buy at the current price, the asset return is less than 3%, which is clearly an unprofitable investment unless it can achieve ultra-fast growth to quickly increase net assets. $BTC $ETH $BNB #中美贸易关系 #加密市场反弹