// strategy template
GARP
Growth at a Reasonable Price - growing businesses whose valuation hasn't run away.
// the lines that end the argument
One criterion is hard: fail it and the score is capped no matter how well everything else scores.
- PEG ≤ 1.50
What gets measured
| Criterion | Needs | Weight |
|---|---|---|
| PEGhardP/E divided by expected earnings growth. | ≤ 1.50partial credit to 2.25 | 15%Missing: the criterion is skipped and its weight is dropped. |
| P/E (TTM)Price to trailing twelve-month earnings. | ≤ 25.00partial credit to 30.00 | 10%Missing: the criterion is skipped and its weight is dropped. |
| Revenue growth YoYMost recent quarter revenue vs. a year ago. | ≥ 10.0%partial credit to 7.0% | 13%Missing: the criterion is skipped and its weight is dropped. |
| EPS growth YoYMost recent quarter EPS vs. a year ago. | ≥ 10.0%partial credit to 7.0% | 10%Missing: the criterion is skipped and its weight is dropped. |
| EPS CAGR 3yThree-year EPS compound annual growth. | ≥ 10.0%partial credit to 7.0% | 12%Missing: the criterion is skipped and its weight is dropped. |
| ROICAfter-tax operating income over invested capital. | ≥ 12.0%partial credit to 9.0% | 10%Missing: the criterion is skipped and its weight is dropped. |
| Net debt / EBITDATotal debt minus cash, over EBITDA (TTM). | ≤ 2.00partial credit to 2.50 | 8%Missing: the criterion is skipped and its weight is dropped. |
| Operating marginOperating income over revenue (TTM). | ≥ 12.0%partial credit to 9.0% | 8%Missing: the criterion is skipped and its weight is dropped. |
Weight is each criterion's share of the whole rule-set, rounded for display. Every figure here comes from the same file the product scores with - the page cannot say one thing while the terminal does another.
What needs judgment
Durable competitive advantage
10%Structural moat: switching costs, network effects, brand, scale. Growth must be defensible, not cyclical.
Management execution track record
6%Capital allocation discipline and delivery against previously stated targets.
These are the criteria a formula cannot settle. The AI judges them against the guidance above and shows its reasoning next to the verdict; the arithmetic stays with the deterministic rules.
Rules about the portfolio, not the stock
- No single position above 10% of the portfolio.
- No sector above 35% of the portfolio.
These are checked against the book as a whole. A holding can clear every criterion above and still put the portfolio in breach by being too large.
Before you take it as given
This rule-set is a starting point. The moment a portfolio applies it, every threshold, weight and hard line is yours to move - and most people should move them, because the thresholds that make sense for a concentrated book are not the ones that make sense for a wide one.
It has not been backtested and Monsa does not claim it works. What Monsa does is narrower and checkable: hold these rules, and every night it will tell you which of your holdings still clear them and which quietly stopped.
Applying a template takes a minute. The part that is hard to do alone is still being held to it in eight months.