What should i buy

Screening Filters

1. market_cap ≥ $10,000,000,000 + market_cap_category = ['mega', 'large']

   • Purpose: Focus on large, established U.S. companies rather than small, speculative names.
   • Rationale:
     • When someone asks “What should I buy in the US stock market?” without specifying risk tolerance or style, a natural default is to start with larger, more stable businesses.
     • Large- and mega-cap companies tend to:
       • Have more diversified revenue streams
       • Be more liquid (easier to buy/sell without big price impact)
       • Be better covered by analysts and more transparent
     • The numeric market cap filter (≥ $10B) and the category filter (“large”, “mega”) both push the screener toward this universe of bigger companies that are often core holdings for long‑term investors.

2. beta = ['ModerateRisk']

   • Purpose: Avoid extremely volatile stocks and extremely defensive stocks, aiming for “middle-of-the-road” risk.
   • Rationale:
     • Beta measures how much a stock tends to move relative to the overall market.
     • By choosing “ModerateRisk,” the screener avoids:
       • Very high‑beta names that can swing wildly (higher risk than many general investors expect)
       • Ultra‑low‑beta or very defensive names that might lag if markets rise strongly
     • For a generic “what should I buy” question, moderate beta is a reasonable default, balancing risk and potential return.

3. region = ['United States']

   • Purpose: Limit the universe to U.S.-based companies.
   • Rationale:
     • Your question is specifically about “the US stock market,” so we want businesses that are primarily U.S. listed and usually U.S. headquartered.
     • This makes the results more aligned with U.S. regulation, accounting standards, and macro environment, which is likely what you mean by “US stocks.”

4. list_exchange = ['XNYS', 'XNAS', 'XASE']

   • Purpose: Restrict results to major U.S. exchanges (NYSE, NASDAQ, AMEX).
   • Rationale:
     • These exchanges host the bulk of large, well‑known U.S. companies.
     • Filtering for them:
       • Improves liquidity and trading quality
       • Avoids many over‑the‑counter (OTC) or less regulated listings
     • This is consistent with looking for mainstream, investable U.S. stocks rather than more obscure securities.

5. net_margin ≥ 10%

   • Purpose: Ensure companies are meaningfully profitable.
   • Rationale:
     • Net margin is profit after all expenses, as a percentage of revenue.
     • A minimum of 10%:
       • Screens out low‑margin or barely profitable businesses
       • Favors companies with stronger pricing power, cost control, or business models
     • For a general “what should I buy” question, tilting toward clearly profitable companies reduces the chance of exposing you to weak or structurally challenged businesses.

6. return_on_equity (ROE) ≥ 10%

   • Purpose: Focus on companies that generate solid returns on shareholders’ capital.
   • Rationale:
     • ROE measures how effectively a company uses its equity base to generate profits.
     • A threshold of 10% is a common rule-of-thumb for “quality”:
       • Suggests the company is reasonably efficient and competitive
       • Helps filter out capital‑inefficient or poorly managed firms
     • This aligns with steering you toward higher‑quality names as default candidates.

7. pe_ttm between 10 and 30

   • Purpose: Avoid both very expensive and unusually cheap (possibly distressed) stocks on a simple valuation metric.
   • Rationale:
     • P/E (price/earnings) is a basic gauge of how much investors are paying for each dollar of earnings.
     • Lower bound (10):
       • Excludes extremely low P/E stocks that can sometimes signal serious problems (e.g., collapsing earnings, one‑off events, secular decline).
     • Upper bound (30):
       • Avoids the highest‑valuation names where expectations are very aggressive, which may be riskier for a general investor.
     • Overall, this band targets “reasonably valued” companies, neither deep value nor hyper‑growth extremes.

Why Results Match Your Question

• You asked broadly what to buy in the U.S. market, without specifying high risk, deep value, or speculative preferences. These filters default to:

  • Large, well‑known U.S. companies (market cap + exchange + region)
  • With moderate volatility (beta)
  • Demonstrating solid profitability and capital efficiency (net margin, ROE)
  • Trading at valuations that are not at extreme ends (P/E band)

• Together, this creates a list of reasonably stable, established, fundamentally sound U.S. stocks that can serve as a starting point for building a diversified portfolio, which is a sensible interpretation of “What should I buy in the US stock market?”