The long side world according to GARP
"He wished he could arrange a maiming as a kind of moral lesson."
– John Irving, The World According to Garp
On the long side, market participants often look for stocks with solid long-term prospects that are temporarily mispriced. They want to buy something that grows at a discount, the famous "margin of safety." This approach is known as Growth At a Reasonable Price (GARP). If that seems to work fine on the long side, then do the opposite on the short side and voila, right? It could even sound something like Dive at a Record Price (DARP).
The first logical step is the easiest one: find stocks with surreal pricing. There is always a stock, sometimes an entire industry, that seems to defy the conventional laws of gravity. With monetary authorities around the world asleep on the "print" button, there is no shortage of absurdly priced stocks. The second step is to do some analysis on...