Table of Contents -- Preface -- Acknowledgments -- Part I: Framework to Finding Short Ideas -- 1. Due Diligence in Short Selling -- 2. Leveraged Businesses: The Upside and Downside -- 3. Structural Issues in Industries -- 4. Recipes for Cooked Books: Accounting Misstatements and Shenanigans --...

When an investor believes a stock is overvalued and will soon drop in price, he might decide to "short" it. First, he borrows an amount of the stock, and then sells it. He waits for the stock to tank and then buys back the same amount of shares at a deflated price. After returning the shares to...