"Apple pie" principle - A different way to pick stocks

When analyzing and selecting stocks, one generally looks for companies with positive attributes like low valuation, high earnings growth, balance sheet quality, and an attractive return on equity. And investors do not complain if a stock also exhibits low price volatility and has produced small drawdowns in the past. However, what sounds simple at first turns out to be something of an art, since hardly any stocks rate positive on all these criteria. This is exactly what in practice forces one to make selection compromises.  

Instead of contributing more to the debate about which investment philosophy might be right, we have come up with a different idea. How would it be if, instead of hunting for attractive attributes and ultimately having to make compromises, we just excluded stocks that obviously exhibit especially poor attributes?
You can find the answer and an explanation of what investing and apple pie baking have to do with each other in our latest Flash Report.