[[Start here]] → [[develop an investment routine]] → perfect stock --- What works in stock markets is super well known. So everyone is trying to find the perfect stock - one that displays ***all*** the best return [[expose to return drivers|drivers]] we’ve discussed. Yes - that stock must be highly profitable, growing, cheap, have strong momentum, brokers upping the numbers, ideally a strong yield etc etc. ![[the perfect stock does not exist-1.png]] But if you screen for a stock with those criteria you won’t find any candidates. The market is too efficient. In brief, sequential screening rules are a destructive mechanism. They cut, cut and cut away possibilities and remove all the shares that fail on any one measure. The trick is to use 'simultaneous screening' rules that don't cut away possibilities. ==This is the benefit of _ranking the market,_ rather than _screening_ the market.== Ranking is inclusive, not exclusive. You find stocks that *generally have most of those traits*, but not all of them. And if you construct a portfolio from them, you find the portfolio averages have *all the traits*, whereas the individual stocks *don’t*. You can’t find the perfect stock, but you *can* build the perfect portfolio. ![[the perfect stock does not exist-2.png]] ![[the perfect stock does not exist.png]] As Ben Graham once said: > "To try to buy groups of stocks that meet some simple criterion for being undervalued - regardless of the industry and with very little attention to the individual company... my enthusiasm has been transferred from the selective to the group approach." This is a summary piece from a long form article I wrote on Stockopedia which illustrates these points in depth: [The Perfect Stock Does Not Exist... Stop Searching For It | Edward Croft](https://www.stockopedia.com/content/the-perfect-stock-does-not-exist-stop-searching-for-it-951719/)