The Prospector screener.

Every Saturday morning the same question lands in front of me: out of roughly twelve thousand US-listed stocks, which ones deserve thirty minutes of my attention this week? The Prospector screener is the first of three answers. It's the one I run when I don't care how big the company is — I just want the best names the universe is offering.

This post is the what and the why of the Prospector. It is not the recipe. The exact gates, weights, and thresholds stay behind the curtain — published once, they're a screener anyone could clone. The shape is the post; the spice mix isn't.

If you haven't read the Blue Portfolio yet, start there. It's the five-layer system the Prospector lives inside.

The claim

The Prospector's job, in one sentence: surface a small handful of businesses each week that are simultaneously high-quality, sensibly-priced, financially intact, and showing real momentum — regardless of cap size. If a name passes, it earns a closer look.

That's a hard sentence. Most retail screeners pick one of those four jobs and live with the false positives the other three would have caught — quality screens find expensive junk; value screens find cheap traps; momentum screens find broken businesses with a tailwind. The Prospector tries to do all four at once because the Council is unanimous on this point: a name worth owning has to clear all four bars together, or the strategy isn't honest.

Why three screeners, not one

Before going inside the Prospector, the meta-question.

I run three screeners every Saturday — the Prospector, the Bedrock, and a third called Quantum (a later post). Each one solves a different selection problem:

• Prospector — broad-cap, strict-quality, the broadest hunt. Cap-unbounded by design.
• Bedrock — large-cap-only stability anchor. Ranks for capital-return discipline.
• Quantum — strict-momentum smaller-cap hunter. The opposite cap band, the strictest momentum encoding.

One composite screener would have to pick a single set of trade-offs. Three screeners with deliberately different shapes let each job run with its own optimal selection logic. Overlap is signal. Bedrock and Quantum don't overlap — Bedrock is large-cap only, Quantum is smaller-cap only, and that gap is intentional. The Prospector is cap-unbounded specifically so it can bridge both ends: it overlaps Bedrock at the large-cap tail and Quantum at the small-cap tail. When a name surfaces in both the Prospector and one of the other two, that double-hit is a stronger pre-buy signal than a single-screener hit alone — and one of the reasons the Prospector is the first one I open every Saturday.

The framework — four questions, asked at once

The Prospector encodes the Council's full Layer 2 floor plus its Layer 3 momentum overlay. Every name has to pass all four of the underlying questions; the ones that do are then ranked, and the top of the ranked list is what surfaces.

The four questions, in plain English:

Is the business actually good? Quality, structurally. Not "is this a famous brand" — is the business earning a real return on the capital it carries, year after year, with margins that hold up across a cycle? The Piotroski F-Score plays a role here; so does sustained return on invested capital; so does operating-margin behaviour over multi-year windows. The bar is meaningfully stricter than the Council's absolute floor — the Prospector is a strict-quality screener, not a distress-avoidance one.

Is the price sensible? Valuation, by multiple converging measures. The Buffett synthesis applies — pay a sensible price for a good business — and the gates encode that by requiring the price to be at or below a discounted-cash-flow estimate of fair value, with capital-structure-aware multiples capped on the upside. A great business at a stretched price doesn't pass.

Does the business survive a bad year? Financial intactness. Distress composites, earnings-quality screens, and explicit leverage gates. The Council's Howard-Marks reframe — risk is the probability of permanent capital loss, not volatility — gates this question. Anything that could be wiped out by an ordinary recession doesn't get to the ranking step.

Is the business actually accelerating? Momentum, encoded as a soft floor through the Navellier Momentum Score. NMS is the Council's value-trap filter — quality and value alone surface plenty of names that look great on the screen and are quietly broken underneath. Requiring confirmed acceleration alongside the fundamental gates is what filters those out.

Names that clear all four questions get ranked. The ranking is dominated by a single capital-return signal — the Council's Thorndike-school prescription, operationalised. I'm not going to publish the exact weight here; the dominance is the point, not the percentage.

A worked example — what a Prospector hit looks like

I won't run a real ticker through the screen — too easy to back-fit by anyone reading and trying to reverse-engineer the gates. The shape of a typical hit instead:

• A business earning structural returns on capital, sustained for years.
• Margins that have expanded or held firm through the last several quarters, not collapsed.
• A balance sheet that survives a recession without panic.
• A price at or below a sensible DCF estimate of intrinsic value.
• Six momentum factors mostly green — earnings accelerating, sales accelerating, analyst estimates trending up.
• A capital-allocation profile that's returning real cash to shareholders, not torching it on bad acquisitions.

That kind of name earns the next thirty minutes of my Saturday. The Prospector didn't tell me to buy. It told me the business is worth the work.

The edge cases — where the Prospector misses

Honest gaps. Every screener has them.

It misses early-stage compounders. A great business that's still investing aggressively will fail the margin or interest-coverage gates. Amazon at $20 billion didn't pass screens that looked like this; neither did Nvidia for most of the last decade. The Quantum screener exists specifically to cover this gap.

It misses deep cyclicals at the bottom of the cycle. When a steel maker or a homebuilder is in its trough year, trailing fundamentals look terrible and the gates reject — even though that's exactly when the Council's Marks-and-Thorndike school says to buy. The Prospector doesn't normalise earnings across the cycle. That judgment is a Layer 5 call, not a screener call.

It misses turnarounds. A real operational reset, year one, looks like a value trap to a multi-year quality screen. Some of those are traps; some aren't. The strategy accepts the miss.

It can produce zero hits. Some weeks the universe is uniformly expensive, or the valuation gates over-filter, and the Prospector returns nothing. The right response is to do nothing. Mid-cycle inactivity is correct. See the Blue Portfolio for why patience is baked into the system.

Where this fits — the rest of the pipeline

The Prospector's job ends at the candidate list. The candidates then go through:

• Layer 4 — entry timing. A live technical strategy alert has to fire. The fundamentals say the business is worth owning; Layer 4 says today is a reasonable day to start.
• Layer 5 — verification. A three-check pre-buy pass. Volume profile, news sweep, fundamentals re-validation. Plus a written two-minute drill that names the thesis, the risks, and what would invalidate the position.

Most names that pass the Prospector never make it past Layers 4 and 5. That's the point. The pipeline is designed to prefer the false negative over the false positive — better to skip a winner than to buy a loser.

What this means for you

If you're reading and wondering whether to run a Prospector-style screen yourself, the honest answer: only if you're willing to do the rest. A screener is the cheap end of the work. Layers 4 and 5 are where the time actually goes. If you have an ETF Portfolio doing the heavy lifting for retirement, you almost certainly don't need a screener at all — the math is already on your side.

If you do want to build one, the principles above are the public part. Quality at a strict bar. Sensible price. Survives a recession. Confirmed acceleration. Rank on capital return. That posture is enough to direct an experienced investor toward the right kind of names; the specific encoding is the part that earns its keep through experience rather than disclosure.

How the pieces fit

Three screeners, one pipeline.

• The Prospector is the broad-cap conviction hunter. The one I run first.
• The Bedrock is the large-cap stability anchor.
• Quantum is the strict-momentum smaller-cap hunter. Post on that one is coming.

All three are Layer 2 and Layer 3 of the Blue Portfolio. All three are downstream of the Council. The system is one shape, run three times with different selection settings, every Saturday morning.

The screener tells me who's eligible. The rest of the week tells me who's worth the trade.

— Mark