We covered a lot of ground—from how brute-force distribution still works to why persistence compounds in ways most people underestimate. Here are the key takeaways from our conversation.

You can listen to the full conversation on The Stock Thoughts.

Key Takeaways

Brute-force distribution still works. When I started The Bear Cave in February 2020, I individually DM'd roughly 10,000 Twitter followers over 3 days to get my first readers. I tested different messages, different times of day. Afternoons worked better than mornings, shorter messages worked better than long ones. Eventually I ran out of people to DM, but that strategy got the ball rolling.

Shameless (but thoughtful) persistence compounds. As a college freshman, I cold-emailed about 100 Stanford alumni per week. The response rate was roughly 10%, which turned into about 5 meetings. One fund wouldn't respond no matter what, so I showed up at their lobby in San Francisco and LinkedIn-DM'd everyone inside until someone came down. Four years later, they became subscribers.

You don't need to be technical to build software. I built the Stock Promotion Tracker with an engineer I found through a friend of a friend. We meet about 2 hours per week. I'm probably the least technically savvy person to ever come out of Stanford, but we shipped a product that now has roughly 20 paying customers at about $1,000 per year.

On prediction markets: chase liquidity problems. You always want to be trading in markets where liquidity is an issue for you. Because if you're not, you're playing against smarter people than you need to be playing against.

Full Transcript

The following is the full transcript of my conversation with Bryan Wagman.

Bryan Wagman: So, wanted to start with something that I think is really cool, actually, about your journey, which is the… I guess the… the DMs that you sent and the emails that you sent to get things off the ground in those first days when you were just getting things rolling with the Bear Cave. So, can you… can you tell that story?

Edwin Dorsey: Yeah, absolutely, Bryan. So, when I was a senior in college, I started the newsletter, The Bear Cave, mainly as a way to get attention and hopefully get hired by a hedge fund. And so, I started writing this newsletter in my dorm room in February 2020, right before the pandemic hits. The pandemic hits, everybody goes home, I graduate a quarter early, so I got all the time in the world to work on this newsletter, and hopefully make it into a thing that people start reading. And it's always tough to get your first thousand readers. I tweeted about it, and it got some traction, and I had a few Twitter followers at the time, but I really wanted people to read it.

So, I went through every single person who was following me on Twitter, I don't know how many, maybe it was 10,000 people, and individually DM'd every single one that had DMs open. I literally spent 3 days just DMing people, saying, will you please read my newsletter? And my eyes were hurting, and that's one way in which I got a few readers to sign up for the Bear Cave early on. Another thing is that I looked at every single college student investment club, and I cold-emailed every college investment club, asking them to check out my newsletter. I just went out to the world and found every potential reader and emailed them to say, sign up for more emails. And luckily, it was the pandemic, and people were really open to finding stuff to read, so that's how I got the initial ball rolling. And what I found with newsletters is once you have the initial readership of a few thousand people in the right audience, then as long as you produce good content, it kind of grows on its own. So there was a lot of hustle to get those early readers, but now it's just… the momentum takes it.

Bryan Wagman: What were those 3 days like? Like, did you have a certain routine to kind of get through it? Like, were you, you know, surviving off coffee? Just, like, paint the picture for us.

Edwin Dorsey: So I don't do coffee, lucky. I try to avoid that. I was living with my… in my parents' house at the time, just graduated, and I'd go down to a table, and it… it's terrible, it's not fun just to repeatedly cold email people. The first thing I do is you want to test out various prompts. I had a lot of experience cold emailing people when I was a college student. I sent so many cold emails just trying to meet and network and learn, so I think I drafted 2 or 3 different versions of a DM I could send people to sign up for the newsletter. I tested, I iterated. And I was also testing different times. I've long been a believer the best time to ask anybody for a favor or reach out to them to get their attention is in the afternoons. In the mornings, people are busy, and you got your work to get through, and in the evenings, you're gonna go to bed, and you're socializing, but in the afternoons, you just had lunch, you're in a good mood, it's a lull in the day. So I was testing various different prompts at various different times to send DMs, and I think I concluded, like, I found the prompt that worked best. It's always just good to keep it short and directly ask what you want, which is them to sign up for the newsletter, and I found that the afternoons were good, so I'd block out 4 or 5 hours, and, you know, say, just get through this many, just get through this many, just get through this many, and then by the time I did, you know, roughly 10,000, I didn't have anybody else to DM. And it was nice, too, because if people don't like the message, they'll just ignore it, and they won't sign up, but if people do like it, they'll give you some positive encouragement, so it was cool to get a lot of DMs back, saying, oh, this is so cool, I'll definitely check it out, I'll tell a few people. I think the traditional advice with venture capitalists is you do things that don't scale in the early days to get customers and readers, and this is one example of that.

Brute Force Networking

Bryan Wagman: Yeah. That's… that's sort of what I wanted to ask you about, because I think that's exactly what it is. Like, it's… it's not scalable, and even beyond that, I feel like most people, when they think of just the… the idea of DMing 10,000 people or something like that, like, it seems almost like… not possible, or just, like, something most people wouldn't really consider. I'm curious, in the past, had you had other examples of taking this sort of, like, brute force type approach to life?

Edwin Dorsey: Yeah, oh, absolutely. I love that question. That's one thing I did really good, especially when I was young. I think when you're a college student in particular, you've got this innocence about you, which means people are way more likely to help you than they are, you know, once you graduate from college or you become a full adult in your late 20s and early 30s. So, as a college student with my college email, I… when I was in New York for a few months, I looked at every single Stanford alum at the big financial firms that I admired, and I just pulled their emails from our alumni database and cold email. I think I was averaging 100 cold emails a week. 10% response rate, 5 would lead to meetings. I would not be surprised if I have cold emailed more Stanford grads in finance than anybody to ever be an undergrad. And this is how you get the foot in the door. And the other thing is, it's great to network when you don't need anything. So if you don't need an internship, or you don't have, like, a clear ask, you're genuinely just going to learn, and maybe present, and try to… show your skills a little, and just understand the industry better.

So, that was a big brute force approach. There's one story I like to tell of a particular hedge fund in San Francisco, and I cold email, like, everyone told me you gotta meet with them. And I cold email, I cold email, I cold email, no one's responding. They didn't say no, just no responses. So, I decided, as a freshman, let me just go there and see if they'll meet with me. So I took the train up, I go to this big, fancy building, I go up to the desk with the guard, you know, guarding people from going to the elevators, and he says, do you have an appointment? And I say, no, but I want to present to them my ideas, and maybe they'll give me an internship, and he's like, he says, you can't come up without an appointment. I said, please, just let them say no to me, I just want to go up, and they say, you can't go up without an appointment. Perfectly fine, and I said, okay, I'll sit in this lobby and see if… if someone calls down to get me, you know, then they can… I'll be let up. So I go, I sit down in the lobby, and I start LinkedIn DMing everybody at the hedge fund, saying, look, I'm a freshman in college, I'm in your lobby right now, will you please meet with me? I want to share stock ideas. In hindsight, it's a little weird, but… in the moment, I had this confidence, and eventually one of them said yes, and they called down, and the guard, the front desk agent, was just amazed that I got let up, and I met with them, and I think they became subscribers to my newsletter four years down the road, and it was just a funny story. So, it's really important to take a lot of initiative, and once you get older, you can't randomly show up places, and, you know, cold outreach doesn't work as well, but I think especially when you're young, it goes a long way.

Bryan Wagman: Yeah, that was gonna be my next question. Now that you're more established, do you find you have to use these sorts of tactics somewhat less? Or, like, when was the last time you can think of sort of doing something along these lines?

Edwin Dorsey: So, I would never now go show up somewhere randomly, it's disrespectful and odd. You know, I might… I probably wouldn't just cold email somebody to say, hey, I just want to talk, unless I feel like I can bring something to the table, because I don't want people just to donate their time for maybe no reason, unless it's a special circumstance, but I do cold email a lot of people to get featured on my Idea Brunch newsletter. The thing is, if somebody says no, like, then I'll take them off my reach-out list. I won't continue to persist, but I do cold email a lot, but I also believe in just respecting people if they say no, and they're not interested. You know, I'll have some people I really admire who I just, every 6 months, I'll reach out to them, and, you know, until they tell me they're not interested, I'll email them every 6 months, because I think they're great. And, you know, some people do, you know, after 2 years of pestering them every 6 months, hey, can you come on my interview series? They do go on. So, that's another example. But I've found that as you get maybe a little older and more established, it's better just to demonstrate the value you can provide, do interesting things online, and then let people come to you. And that's the best way to do it, and that's kind of been my approach, is try to build cool tools and share them online, write interesting things in your newsletter, and then if people come to you, that can be your new network.

Starting Over & AI Integration

Bryan Wagman: And if you were just getting started out today, what would you do differently, both in terms of, I guess, the the product and the value add to the client in terms of, like, what you would think about trying to provide, as well as how you would think about distributing it.

Edwin Dorsey: In terms of, like, if I was starting the newsletter now, what would I do differently with the Bear Cave? The number one thing is you want to be very fluent in AI and using AI tools. I use ChatGPT a lot. I kind of wonder if I was doing the newsletter now, how many AI-related screens can I do to… and make that integrate to the Bear Cave's content? So, every month or so now, I have ChatGPT Deep Research give me a list of all recent IPOs and SPAC mergers that have high levels of consumer complaints. If I was starting the newsletter now, I'd probably, you know, make 5 or 6 of these different screens that are running all the time, and have AI researching it, and then, you know, here's some AI-generated ideas, quick spark notes on each one, and the unique filters we're using to come up with them, so that's one big thing. I'm not sure I would do anything terribly different. I think I know the newsletter game pretty well, and I think I was really lucky with the pandemic thing timing.

Maybe one thing I did wrong is I think pricing it between $500 to $1,000 a year, that's a no-man's land for pricing. I was originally at $340, $34 a month or $340 a year, then I raised it to $44 a month or $440 a year, while grandfathering in existing subscribers at the lower rate, and then I raised it again to $640 a year. I think that last price increase going above $500, it's a psychological hump where you either charge over $1,000 or under $500. That's a no-man's land, and that's maybe one thing I wouldn't have done.

Daily Routines & Walking

Bryan Wagman: Yeah. One thing that stood out as I was doing some research for this podcast was, you have a big walking habit, it sounds like, and also your work, just, I guess, patterns seem to fluctuate a lot. Like, some weeks it can be super intense, and then some it's more relaxed. So, like, what's a… what's a typical day, I guess, like, for Edwin Dorsey during a calmer period? And then, same question for maybe a more intense period?

Edwin Dorsey: I have a very atypical life and very atypical day-to-day schedules. For me, some of my day is dictated by the weather here in Miami. If the weather's nice, I'm gonna go for a really long walk, and maybe go to the beach and listen to a podcast or stuff that's relevant for work. I might, you know, have 3 tickers I'm interested in, I'll find 10 hours worth of podcasts from CEO executives and industry participants talking about these companies. Just go for a long listen to the podcast, and I'll listen to one CEO, and I'll say, you know, he seems reasonably okay. Maybe don't write on that company. I'll listen to another one and say, this guy is so bad. Now, this is gonna be a focus, and I'll try to, you know, piece together a mosaic. So that might be one thing, if the weather's good.

If the weather's not so good, you know, I spend a lot of time now on prediction markets, which we may talk to later, so I do a lot of research on those things. I might be just writing the newsletter, because I'm on a schedule. We're first and third Thursday of the month. I publish these Bear Cave Deep Dives. I have a Bear Cave Deep Dive due this Thursday, so tomorrow and Wednesday, it's gonna be full-on 12 hours plus in my apartment, just writing the newsletter, doing research on them. That's really intense. But if it's a week where I don't have a Bear Cave due, I'll probably be spending more time on prediction markets, more time going for walks and listening to podcasts, and more time just, you know, doing soft research on various ideas to try to narrow down which company I want to write on.

Career Path & Betting on Yourself

Bryan Wagman: Yeah, for sure, and definitely going to get more into those prediction markets later. They were pretty new for me, so I have tons of questions. One other thing I'm really curious to hear how you think about both now, but as well as in the past, and how you sort of found yourself in this situation, is just, you know. Obviously, given your background and your aptitude in this field, you know, you certainly could have pursued a role working on the buy side, or eventually starting your own hedge fund, or something like that. And so now you are certainly still an investor, which I did want to… it was another part of this question I wanted to ask was just sort of, what do you do in terms of… for your own investments, but also you're kind of running a media company as well, so I just curious how you think about your career path, if you will, and why you chose to go the way that you did.

Edwin Dorsey: Yeah, so, originally, I was interning at a fund all four years of college. I wanted to work for that fund after I graduated, and they said no, because they were kind of in the process of winding down. So I couldn't work there, and I wanted to get hired at another fund, so I started the newsletter as a way to get hired. So I originally did want to go the hedge fund route, although I really care about culture, and I maybe don't love typical finance culture. I want to do things that I feel are societally valuable and useful. So, I wanted to maybe work at a really, like, small shop with a good culture that has some, you know, element of short selling for the benefit, or talking to reporters, or highlighting misinformation to others.

So I started the newsletter, and it just became commercially successful in its own right. I think within 6 weeks, it was 100K ARR. I remember I talked to one fund that was kind of interested in me, and I mentioned how much I was making, and I said I would expect it to be, like, matched or double, and they're like, we don't pay first-year analysts that much. I'm like, well, then why were we having the conversation, you know? So it became successful. I think there's a saying, which is, once you work for yourself, it's tough to work for someone else, and I've never worked for somebody else, and I think I would find it really tough. I like having my own schedule, I like working whatever hours I like. I like being able to do whatever I want to do. So that makes me hesitant to join a traditional firm. And I like betting on myself. I think these… there's chances to make really big newsletters. Doomberg does over 3… I think over $4 million a year now in ARR, and it's like, well, that's a huge thing. If I can get to that level, I can build my own tools. I think prediction markets are gonna be an absolutely huge space, so if I have a second act, I could really see it being in tools for prediction markets, or making my own funds and investments to trade on prediction markets, so that's an area I see a lot of potential, too.

AI in Research & Screening

Bryan Wagman: Yep. In terms of, I guess the, you know, you mentioned AI earlier, and just how that has, you know, become a more significant part of your work. Could you detail just sort of what that journey has been like, and I guess… when did you start to integrate it into your process? How do you feel like it's come along in terms of the capabilities and how prevalent it is throughout your work, and just where you're at with it today?

Edwin Dorsey: So, I mean, it starts by just using ChatGPT a year or two ago and asking it a bunch of questions. Then I use it for maybe more screening. Now, if I'm researching a company, I find myself going to ChatGPT research and just asking a ton of questions to learn, learn, learn. Sometimes it's surfacing useful insights. Sometimes it struggles with things. Like, it's really bad at analyzing Glassdoor reviews, which is an area I care about. So, part of it is just company-specific research, asking questions. Part of it is idea generation, asking it to highlight, you know, look at 100 recent IPOs, and give me the five that have high levels of consumer complaints, and then I'll briefly look at those five, and two will be interesting to me. So, that is idea generation, company-specific research, and then there's these unique cases. I know we're going to talk about Stock Promotion Tracker. That uses a ton of AI, where I have a dedicated email inbox that's receiving all these stock promotion campaigns, and an AI agent reads it all and summarizes it and gives me the data. So, that's kind of a unique case where I'm using AI to, you know, to try to digest huge amounts of information that otherwise would be too burdensome for me to deal with.

Stock Promotion Tracker

Bryan Wagman: Wanted to pivot to the promotional tracker tool. So maybe first, if you could just kind of give us an overview, maybe from more of, like, a narrative story perspective, of just your experience tracking stock promotion over time, and just how that idea became to… like, how you came to think, hey, this can be something I can actually productize.

Edwin Dorsey: So, I didn't have a ton of experience tracking stock promotions. IPHawk, a guy on Twitter who has a newsletter, you know, would track them. It used to be stock promotions and companies engaging in paid stock promotion were really micro-cap, sub-$100 million companies. Over time, especially as we've seen a huge influx of retail investors, we've seen a lot more stock promotion, a lot of companies engaging in stock promotion, getting a lot bigger. Stock promotion has moved to new forms of media, like Discord, Reddit, and YouTube. So, it's kind of become more complex, more institutionalized, bigger dollar amounts, bigger companies. Which makes me think, oh, I can write about some of these companies in the Bear Cave. And so I first kind of got interested in stock promotion by wanting to know what companies would be interesting for short sellers to highlight in the Bear Cave.

Now, in terms of productizing things, I did not originally set out to build a tool that would track stock promotions. I was looking at myself and thinking, I got a good newsletter in the Bear Cave. I got a good newsletter in Sunday's Idea Brunch. I'm getting this cash in, I have extra money to now spend on new projects. What do I want to do? I want to build tools that are useful for me and useful for others. The first tool I built was FOIA Search.com, which is still up, that lets people search the SEC's FOIA logs to track potential signs of undisclosed investigations. It's a really useful tool. I thought it was the best thing in the world. I thought every hedge fund is going to sign up for the paid features to track their portfolio holdings and get alerts, and I think… it got, like, 50,000 visitors, 50,000 people have used it, and maybe 5 have signed up for a paid feature. They're, like, $50 a month. It was just not… not enough people care, not enough people want to pay for it, it just… for whatever reason, it wasn't commercially viable, even though I thought it would be, and it's a useful tool. I made a few other tools, like Comment Letter Tracker, that makes it easy to track SEC comment letters, and a few other minor things, a website so people could highlight text messages sent by stock scammers overseas. So, StopNowZack China Fraud is another website. But none of those were commercially viable, so I decided to just do this stock promotion tracker mainly as a way for myself to track these things. I have an engineer I work with who I pay to help me build these websites who's excellent. And we were building this, and we quickly realized it's incredibly complex. He's working on it 20 hours a week, I'm talking to him 2 hours a week. And we eventually made it into a useful tool for me to find stock promotions, and then for other people to find stock promotions. And then, you know, I've been able to charge $1,000 a year for it or so. There's 20 paying customers now, and I see a big pathway to grow it, or sell it, even.

Bryan Wagman: What was your process like for finding and beginning to work with that engineer?

Edwin Dorsey: Well, originally, somebody cold emailed me a long time ago, and I was working with him. He was great, but he didn't have necessarily the skill sets for what I wanted for something else, so he recommended me my new guy. And then, you know, I think I reached out to, like, 5 people, and this guy on someone else's recommendation, and he was really excellent. I was just like, might as well work with him. So, I didn't use any of the traditional… it was just a friend of a friend, which is how I think a lot of these things start.

Bryan Wagman: Yeah, and to the extent you're open to speaking about it, would you be able to share anything about, just in terms of the, I guess, tech stack that's going on behind the scenes for the promotion tracker tool?

Edwin Dorsey: To be honest, I don't have no clue. So, like, I mean, I know we use AI tools, and I'm spending, like, $1,000 a month on AI to read through the email. I could explain in a more basic, crude form how it all works. I don't know necessarily all the tech tools. Despite… I am the least technically savvy person to ever come out of Stanford. I don't know how to code, I don't know, like, all these fancy things. I'm good at my research, I'm good at intuition with corporate misconduct, I'm not good with tech stacks. What I can tell you is, you know, we made a list that's ever-growing of places engaged in stock promotion, and these firms shut down, they sprout up, there's a lot of YouTube channels. I mean, it's really more complex than you think. It's not, like, a universal thing. The SEC doesn't have good data on it at all, so we kind of initially made this list, and it started with just tracking websites that would put out promotional content. And, you know, you scrape the website every day and upload that data. And we have a scraper and an AI agent that reads it and looks for the data and puts it in.

Then, it changes to be a little more technically complex, where we have a dedicated email inbox that signs up for all the email campaigns, because most of it is done over email, and then we're scraping that. And then we find 50 or so YouTube channels that engage in stock promotion, and then we put them in, and we build a scraper for that, and it's complicated with YouTube, because most of these places, they don't disclose the payments in their YouTube description, they'll have you click on a link that takes you to the information… so now we have a thing that checks every single link in the YouTube videos from these 50 channels to see if they're disclosing payment, and sometimes they'll say, we may or may not be getting paid. And I'm like, well, that's not the law, but I mean… now what do we do? So there's a million different edge cases, and so much complexity goes into it, which also creates our moat. It's not as simple as just going to Edgar and seeing, give me a list of all companies paying for stock promotion, but now we've got this database that kind of works autonomously, whether it's checking company blogs, checking our dedicated email inbox, checking all these YouTube channels, a few other sources. We might want to expand to Reddit and text messages and Discords, but right now, I'm confident in saying we have the best database for tracking paid stock promotion in our public markets. I don't think many hedge funds are aware of it. I don't think I've done a great job promoting it. I think it could be huge. I could see it integrating with a lot of other service providers. I want Seeking Alpha to have a stock promotion tracker risk score, like an API connected to us where we can warn about companies. Benzinga, all these other platforms. That would be a really useful service that doesn't really exist. But right now, it's just, you know, we need to be the best source of data on stock promotions, and that's how we do it.

Bryan Wagman: Yeah, and maybe you could expand on that a little bit, like, just from a hedge fund's perspective, like, just what exactly is the value add, and how would you see them potentially integrating it into their process?

Edwin Dorsey: So, I think there's a dual purpose to StockPromotionTracker.com. One can be idea generation. I'm looking for companies to short. Show me which ones are spending tons of money on stock promotion campaigns, and are moving up. So we have a lot of filters for that. We can show you companies that have only recently started paying for stock promotion. We can show you companies that have spent over a million dollars paying for stock promotion. We can let you filter by market cap, because people generally don't care about sub-$100 million companies. We make it easy for you to find companies that have over a $100 million market cap that have multiple paid stock promotion campaigns in the last 3 months that are listed on a major exchange. You can't get that list really anywhere else other than our tool, and so that can serve as a really good source of idea generation. I know it serves as a source of idea generation for me in highlighting things in the Bear Cave. It's unique, it's differentiated, it's repeatable, and it's… these aren't necessarily companies with no volume, but they're also not $20 billion companies that everybody's looking at. It's really in this $100 million to billion dollar market cap sweet spot.

So that's one area. I think the second area is diligence. If you invest in a lot of small cap companies, and people who invest in small caps tend to invest in a lot of small caps, it's not necessarily easy to see: are these companies credible, or are they being overly promotional? Are they paying for stock promotion? Are they paying for stock promotion egregiously, or are they only paying once or twice in the last 2 years? Our tool makes it so easy. 5 seconds, just type in the ticker, and you can see if it's paid for stock promotion in the past. So it can just be if… you don't short at all, but you invest in a lot of small-cap companies, 1 out of 10 in your portfolio might be paying for stock promotion, 1 out of 20 might be egregiously doing so, and it's a sign that maybe you don't invest, or you at least apply more diligence. And based on the data we have, it seems like companies that do a lot of stock promotion really underperform. And now we're building more tooling where you can kind of see, like, you know, they kind of go in waves. So does it have one wave where it promotes, issues stock, and collapses, and then another wave? So we're really trying to do a lot with the data, but right now, it's just… if you want to track stock promotion campaigns, StockPromotionTracker.com is the place to do it.

Bryan Wagman: Makes sense. And from a Bear Cave business model perspective, do you feel like your vision for the future, like, is part of this intentional to try to shift more to, like, a software-type business model, as opposed to something that requires you to keep putting in your time regularly?

Edwin Dorsey: Yeah, I think, you know, Bear Cave, I love it, and I used to say, I'm gonna do it forever, and it's just my career now. I still love it, I think it serves a societal purpose. If you look at the way people get really wealthy, it's through building businesses, and if you look at an advantage of the Bear Cave is I don't just… I can monetize through subscriptions, but I've got a great distribution channel to promote other products. I mean, a big thing people struggle with is you can build great products and you don't have distribution. I have great distribution. It's almost lazy and foolish if I don't try to build great products to take advantage of the distribution and trust I have with readers. So, it's, to me, a natural kind of extension. I do see, you know, newsletter authors, the best might be earning millions a year, but if you really execute, you can build a company that could sell for tens of millions a year, or work autonomously. So, I love experimenting, I love trying new things. So that's kind of just, you know, I got extra time, I got extra energy, let's see where this goes. And that's kind of how I think about it. I'm also incredibly bullish on prediction markets, so we'll see. I can see myself, honestly, in the future, trying to drop everything to just exclusively focus on prediction markets.

Prediction Markets

Bryan Wagman: That's so cool. Let's get into that. And I want to thank you for putting them on my radar, too, because, like, literally before, you know, a few days ago, I had hardly looked into them at all, and then just, like, binged a bunch of podcasts and stuff like that this weekend. Yeah, like, what an interesting space, but I guess to kick things off, like, how did you first get involved here?

Edwin Dorsey: So, I first heard about prediction markets when I was a freshman in college. There was an ad for PredictIt, which was a kind of an academic experiment where you could bet up to $850 on political markets. Who will be the next president? Who will be the next governor of a state? What will be the margin of victory? Things like that. And it was really small, it was illiquid, you could only bet $850 into a single contract. It operated under a no-action letter from the CFTC, in which the CFTC is kind of saying, look, as long as you operate under these parameters, we'll let you continue with your experiment. And I lost money on the first election, it kind of died down.

But then, the second election, in 2020, with Trump-Hillary, then it really started to sprout up, and I just quickly realized there's a lot of easy ways to make money. You know, there was a monthly market for, will Hillary Clinton get indicted? and it's just, it was a very low chance, and every month it starts at 8%. I'm like, this doesn't make any sense. It's a free $50, just max shorting it. There is so many… the numbers would add up in a multi-contract market. Who will win the Republican nomination? You just look at all the players, it adds up to 140. So you just short everyone, and you've locked in a guarantee. There's so many inefficiencies, partly because there's inefficiencies in these new markets, partly because of the $850 limit meant smart money couldn't come in and correct it. So, I got… and I did really well the second time around with prediction markets, just spotting really obvious inefficiencies, where you could make tens of thousands of dollars in total, but you couldn't make millions, because there wasn't liquidity there, and there's all these limits.

So, that kind of got me interested, but again, the election happens, and it dies down. And now the third time is different with Kalshi. There's Kalshi and Polymarket. I never touched Polymarket, partly because the… the legality of it for U.S. people is unclear, but I did do… I started depositing on Kalshi for the newest election, and I was betting on it. I think I did fine on the election, but I just see all these other markets where I just start trying to trade and get edges. There's Spotify markets, and I do well, I do poorly, but I spent kind of a year learning it, and, you know, starting 6 months ago, I really just became consistently profitable at it. I think I got edges, and… now I'm just spending a ton of time on it. I see a path that… I follow prediction market people who earn millions a year. I was like, why can't that be me? I think there's gonna be a big market for newsletters for prediction market traders, but also tools to help them do research better. There's this whole new ecosystem in finance that I'm incredibly bullish on, that the exchanges exist, but the infrastructure around the exchanges don't. So, I can make money as a participant, and I can make money as an information and infrastructure provider, and I see that as just a huge, enormous opportunity. And I can make money in the Bear Cave highlighting the companies that are gonna be hurt by prediction markets.

Bryan Wagman: Yeah, this is, maybe, maybe a broader question, but definitely want to get into the prediction element of it after, but in terms of… if you're open to sharing this, in terms of how you think about investing your own money, like, whether it's, I want to invest in stocks, or I want to invest in, you know, the Bear Cave, or invest in paying an engineer to build me some tools. Or, you know, prediction markets, like you said. Like, what percentage of your, kind of, portfolio or net worth would you say you've been allocating to prediction markets, and how has that trended over time?

Edwin Dorsey: You know, so prediction markets are liquidity constrained. If I could put all my money in prediction, I think I get higher returns there than I do in stocks. It also is a little scary because, I mean, I trust Kalshi, I believe the money is safe there, but I don't feel as safe as in my Schwab or Robinhood or anything else. So, basically, I've just taken my… and also, because I'm good at what I do on there, it kind of grows naturally. I don't need to deposit more, I have enough to take advantage of the trade. I historically have invested a lot just in stocks, large cap tech, some random small caps, not too active. I've shorted one or two things in my PA or an ETF, but really don't try to do that, just because it could conflict with the newsletter. There's not a ton of ways I can invest in the Bear Cave, per se. You know, I could spend money on advertising, but my small experiments there yielded poor results. To me, the number one thing to invest in is always trying to build new tools. So, spending money on an engineer or people to help me, that is always going to be good money, even if it fails, because you get information. So that's priority number one. I have enough money in the markets, Kalshi, so I don't need to put more money in. So, just keep money in stocks, be fully invested at all times, don't use leverage, but don't not be fully invested when you're young, I think that would be foolish. But now it's less, let's say, financial resources and more, where do I spend my time? Because, Bryan, I don't know if I look tired to you, but I work from morning till night, you know? I got no free time, ever. Other than to come chat with you. So, it's more of a time commitment. Where am I prioritizing my time? And I think increasingly… increasingly it's gonna get to prediction markets.

Bryan Wagman: Yeah, and so what, you know, you mentioned that it's sort of been a journey for you of just developing that skill set and getting to the point of being consistently profitable. For someone who knows very little about prediction markets and doesn't know what a good prediction market investor or trader looks like, or what the different kinds can look like. Can you help me just kind of understand what your journey has been like to this sort of place that you feel like you're at now of consistent profitability?

Edwin Dorsey: So, for all prediction market traders, first, you don't need to trade prediction markets. The best way to get wealthy is to do well at your job, consistently do well, save a little, invest in the S&P 500. That is great advice for 98% of people. You can ignore everything else. You just do that, you will do well in the long run. And if you want to experiment with prediction markets, take 500 bucks and experiment, that's great. Number one thing with prediction markets is you always want to start small. These markets always have sharp players, even if they seem inefficient. You always are going to do poorly in the first few months. Even if you get beginner's luck, it is… you should treat your early stages as learning. Even when I start to trade new markets, I just tell myself, I'm gonna lose a few thousand dollars to learn how they work. I'm never gonna make an absurdly big bet because I'm so confident if I've only traded a market for the second time. It's… there's so many nuances, and rules cucked, is what they like to say, and just weird situations that you do not make money early on. You know, you keep it very, very small.

I think another thing that's really important is to do your own research. I kind of find with the Bear Cave, I am an information service provider, where I'm getting information, I'm servicing it, I'm digesting it, I'm interpreting it, but a lot of times, I'm going direct to the source. I'm using FOIA to get consumer complaints. I'm not relying on other people's analysis, or at least I try not to. With prediction markets, if you want to be good, you need to think independently and get information from the source. And, you know, I think there's a big issue where media, mainstream media, can influence prices a lot. But if you just read the media and trade off that, you are the dumb money. The smart money realizes the flaws of media and how they tend to exaggerate and be systemically wrong. One kind of great example is there's a market for, will the Ayatollah lose power in Iran? Will they lose power this month? Will they lose power by March 31st? Will they lose power by the end of the year? And if you read U.S. media, it's, you know, Iran is doomed, Trump's gonna bomb them, they're done. And the average person says, oh, let me bet on this guy losing power. Go to Polymarket, look at the market for it, and I… I kid you not, you look at the biggest no-holders, people betting on the Ayatollah staying in power, every single one has millions in lifetime profit, and every single yes holder who's betting on the Ayatollah losing power has lost a ton of money.

It is never… you can never see a more clear smart money versus dumb money dynamic. This media likes to exaggerate, the reality is you don't lose power unless you have military defections, and that's not the case. Iran's a nuclear-armed power, so you might hit them, but I don't think you're gonna topple them. And if regimes tend to lose power, like, even in fast revolutions, with few exceptions, it takes weeks or months of leading up to it. It does not happen, you know, by the end of this month. So there's… start small, think independently, realize the biases caused by media, follow smart traders, and eventually, I think you'll start getting a repeatable process that works for you.

Bryan Wagman: What's your process for identifying and following smart traders?

Edwin Dorsey: Well, it's easy, there's leaderboards. So, I go to the Kalshi leaderboard, and I turn on alerts for every one of the people who are on the leaderboard. I look at, you know, there's a trader, Domer is his name, I think he's fantastic. I follow his Polymarket bets. I follow a few traders that I think are smart and listen to their podcasts and livestream interviews. So, it's really, you know, that's why I love prediction markets. In media, there's so many talking heads. How do you know who's credible? How do you know who actually knows what they're talking about? It's just credentialed—oh, this guy went to Yale, this guy comes with this—but with prediction markets, it's pretty clear. Your track record speaks for yourself. And so, prediction markets are going to be really good at surfacing new talent and really good at also calling out the fakers of the world. I bet you there's a lot of people in media who get tons of followers and are seen as really credible who could not outperform on the prediction markets. And then there's people who will kill it on prediction markets who have no following. So I like prediction markets because… for so many reasons, one of which is they highlight true talent and people who are really good at predicting the future, versus people who are not. And maybe one final thing is, on prediction markets, the one incentive is being right. With traditional media, the incentive can be driving clicks, it can be driving subscriptions, it can be being right, but it can also be playing to a base or playing to biases. With prediction markets, one incentive: be right.

Bryan Wagman: Yeah. When I was preparing for this, Domer was one of the people that I read through some of his stuff, and I saw on his Twitter account that his pinned tweet—some of his recommended resources are, like, Chapter 8 of The Intelligent Investor, and Superforecasters—and I'm like, as I started to read through this prediction market stuff, I started to think, well, geez, all of these sort of ways of thinking about the world and trying to be data-driven that I've learned and tried to apply in investing may even apply better to at least certain markets and prediction markets, it seems like.

Edwin Dorsey: Yeah, I… you know, you want to play with less sophisticated people. So, if you're trading mega caps, maybe it goes well. I'm not saying you can't make money trading, but you're going against really smart money. You go to small caps, well, you're still going against some smart people there. You go to prediction markets… you know, I saw one quote from somebody I thought was smart: You always want to be trading in markets where liquidity is an issue for you. Because if you're not, then you're playing against smarter people than you need to play against. And you go to prediction markets, and you can easily find these niches where you can develop repeatable approaches and start printing money. Markets have gotten more efficient over time, but trust me, there aren't that many really sharp, you know, traditional finance institutions playing on prediction markets. It is a lot easier to develop a repeatable edge than you think.

Bryan Wagman: What does your portfolio look like in terms of time horizons and sizes of bets? Because I was thinking about getting into this, you know, if I just want to throw, like, $100 at it or something, I'm thinking, like, okay, I want enough trials that I'm going to be able to learn from this, and I want them to be done in a short enough time that hopefully I can… which is part of the thing that's so hard about investing, is sometimes the feedback loops. You don't know if you're right or wrong about an investment for a couple years down the road. So, when I'm thinking about prediction markets, I'm like, well, I can kind of… I can maybe intentionally shorten the feedback loop. I'm curious how you think about portfolio construction, if that's even the correct term for prediction markets.

Edwin Dorsey: I mean, for me, I do things that are expiring generally within an hour, a day, a week, or a month. I don't want to lock up my capital for a year or two years. Because then, even if I double it over 2 years, I could have… I could get much higher returns just getting a repeatable process in short-term markets. So, the way I think you can make most money is especially with small amounts of money, it's just repeatable things, and there's a lot of things for that. For example, there are markets on Rotten Tomatoes scores, trying to predict that, and you start to learn things over time. Rotten Tomatoes scores tend to fall over time, because the people who review it earliest are most excited to see it. The people who review it later are less excited to see it.

Without even the movie being released, how can you predict it? Well, how much is the studio investing in marketing? That's a good proxy for how good they think it'll be. When do they embargo reviews? Traditionally, if a studio says to film critics, you can release your reviews a week in advance, they know it's gonna be good and build hype. But if the studio says you cannot release reviews until the movie is in theaters, then that's a sign they think the movie's gonna be bad. So there's all these kind of proxies for how, you know, a Rotten Tomatoes score will be. And once you figure these things out and get to model it, if you're playing in these markets that repeat every week, you can start kind of printing money. And I think there is a societally useful component to this, where it isn't just aimless gambling. In Rotten Tomatoes, knowing if a movie is projected to be good or bad is really useful. So I see prediction markets as being a way to kind of digest the world's information into societally useful ways to help people make better decisions.

Bryan Wagman: I'm imagining the sell-side firm of the future that has sector specialists focusing on Rotten Tomatoes scores.

Edwin Dorsey: Yeah, I think these markets are too small a niche, and there's really sharp people. Your track record is everything, and they're repeated. With finance, it's like… I don't know, you can kind of get lucky in the short term, you can underperform, but you'll say it's because you took less risks on a risk-adjusted basis. Everybody outperforms risk-adjusted, it seems like. But with prediction markets, it's a lot clearer, it's a lot cleaner. I think it's a great way to digest the world's information.

Bryan Wagman: What are… what are some of those other somewhat shorter-term markets?

Edwin Dorsey: You know, I think everybody can figure things out for themselves on prediction markets. I don't want to steer people too much, but you know, there's weather, there's Rotten Tomatoes, you gotta experiment on your own. But that's where I would be playing around if… don't put all your money in prediction markets. S&P 500 is a lot, but don't think I'm gonna make money trading stocks or options. Think, I'm gonna make money trading prediction markets. I think that's where a lot of low-hanging fruit lies. And the other benefit of prediction markets is you have an enormous number of casual bettors coming through these distribution points, like Coinbase and Robinhood or whatever, who don't know what they're doing. So you're not necessarily playing against the Citadels, you're playing against just average Joes who are doing it for fun.

Bryan Wagman: And… so you've written on the Bear Cave about how these prediction markets are certainly a new form of competition, I guess, for the wallet dollars of people who are gambling. They've had some responses lately that I'm curious to hear your thoughts on, just in terms of, like, I think they had maybe their own predictions app now, and then the, what was it, Railbird acquisition? So, curious to hear your thoughts on the moves that DraftKings has made in response.

Edwin Dorsey: I think… they're terrible. I mean, I am in Florida, where things are somewhat restricted, but I look at a lot of reviews, and I mean, everybody just hates these apps. You can't… it's very one-sided. It's just like a sportsbook, still. The whole idea of prediction markets is it's kind of peer-to-peer. I can't go on DraftKings Predicts and start giving limit orders to give to somebody else. There's big liquidity constraints. It's just like a worse version of a sportsbook. I think in DraftKings' minds, they're just gonna call it DraftKings Predict and launch it in new markets where there isn't legalized gambling as a way to kind of take share. But they haven't really bought on with the prediction market model. They aren't allowing new people to come in and participate and be counterparties to the casual bettors. They still want to own that relationship. So I… as far as I'm concerned, it's a huge and massive miss with both DraftKings and FanDuel. I'm fairly in tune with the prediction market space; I don't think anybody's investing any time in trading on those platforms. They realize it's just a way to scam casual bettors.

Future Content & YouTube

Bryan Wagman: Gotcha. Another thing I read in one of your interviews—I forget which one—but you had mentioned in passing that you were a fan of, like, MrBeast, for example, and I think there was one more YouTuber who I'm blanking on who had maybe done, like, a daycare investigation or something? Nick Shirley? Yeah, yeah, so I'm just curious to hear more of your thoughts around YouTube, and if you were to do something there someday, what that might look like.

Edwin Dorsey: I think YouTube and video is the dominant form of content. If I could see myself making a ton of money on prediction markets and just focusing on YouTube investigations. I see Nick Shirley's video, and I admire it, I admire the impact it had, and I look at it, and I watch it, and I can think, these are 20 things I would have done differently. But I think, like, I can do that. Why am I not doing that? Why am I not getting out there? I have too many projects I'm working on. But I think video is a lot of fun. One thing that kind of frustrates me is you look at so much of these YouTubers, and, you know, it's… I like just showing the evidence and letting people draw their own conclusions, where I think too much of media now, both creator-led and mainstream, is just telling people what to think. Well, I want to be, like, more of a neutral tone of voice, just an information provider. Let me surface the information for you in a very respectful way towards all parties. No name-calling, no calling for… just very respectful, neutral tone of voice, and let people draw their own opinions. That's kind of what I try to do with Bear Cave.

And I think there's a huge market for just information surfacing and letting people think for themselves. So I could see, as I've gotten older, my career path options have exploded, rather than narrowed. So I could see myself doing YouTube eventually. I could see myself just really focusing on prediction markets. I could see myself doing Bear Cave and traditional finance tools. I have no clue what the future has in store.

Bryan Wagman: Yeah, time will tell. This is… it's been awesome, Edwin. Thanks so much for your time, and is there anything else that you want to let the listeners know?

Edwin Dorsey: No, Bryan, I really appreciate this interview, and I hope it's useful for people, and maybe we'll do it again in two years and see how things have changed.

Bryan Wagman: Awesome. Sounds good. Well, thank you so much, Edwin.

Edwin Dorsey: Thank you, Bryan.

Bryan Wagman: Alright, I'll see ya.

This was a departure from my usual interviews. Rather than focusing on specific investment ideas or market calls, Swen and I explored the business side of what I do—how I create and monetize value for investors, the products I've launched, and what I've learned building this enterprise. We also looked ahead at where the industry is going and what niches remain underserved.

What We Discussed

The conversation covered several key areas:

• Building a personal monopoly - Why focusing on unique niches (like corporate misconduct, stock promotion tracking, and FOIA requests) creates sustainable competitive advantages, and how I've applied this across multiple products
• Lessons from launching five services - What worked with The Bear Cave and Sunday's Idea Brunch, what didn't with FOIAsearch.com, and how I'm using AI to automate StockPromotionTracker.com's operations
• The economics of content entrepreneurship - Why this path can rival fund management financially, the importance of directly helping people do their jobs better, and why finance is an excellent field for entrepreneurship (deep-pocketed customers, limited competition due to golden handcuffs)
• Opportunities still available - Specific ideas I see for aspiring content entrepreneurs, from AI-powered alternatives to Value Line to Europe short disclosure trackers to prediction market products

Takeaway

If you're interested in building a content business in finance—or just curious about the intersection of independent media, investment research, and entrepreneurship—I think you'll find this conversation useful. Swen asked questions I haven't been asked before, and I shared more about the business mechanics than I typically do.

You can read the full interview on Swen Lorenz's blog.

Best Activist Short Sellers and Forensic Research Firms on X in 2026

1. @AlderLaneEggs — Marc Cohodes. Veteran activist short-seller; unfiltered theses on FTX, Signature Bank, MiMedx, NovaStar.
   Why follow: Earliest public signal on activist short campaigns.
2. @HindenburgRes — Hindenburg Research. Forensic short reports; bio: "Popped bubbles as we saw them, including our own."
   Why follow: Real-time alerts on major activist short reports.
3. @muddywatersre — Muddy Waters Research. Activist short shop with cross-border reporting; affiliated with Muddy Waters Capital.
   Why follow: International forensic shorts, particularly Asia exposure.
4. @CulperResearch — Culper Research. Active short-research firm focused on small- and mid-cap U.S. names.
   Why follow: Steady cadence of detailed bearish reports on under-covered tickers.
5. @sprucepointcap — Spruce Point Capital. Forensic short-selling firm founded by Ben Axler.
   Why follow: Governance and accounting-driven shorts with deep document work.
6. @KerrisdaleCap — Kerrisdale Capital. Short-biased hedge fund led by Sahm Adrangi (interviewed in Idea Brunch).
   Why follow: Hedge-fund perspective on shorts, broader than report-only firms.
7. @JCap_Research — J Capital. "Activist short- and long-research shop publishing investigative reports on publicly traded companies."
   Why follow: China and Asia-listed forensic short research.
8. @blueorcainvest — Blue Orca Capital. Cross-border activist short firm founded by Soren Aandahl.
   Why follow: International forensic shorts with Glaucus-lineage methodology.
9. @viceroyresearch — Viceroy. Long-running activist short outfit with reports on Steinhoff, Capitec, and others.
   Why follow: Multi-year track record across geographies.
10. @CitronResearch — Citron Research. Andrew Left's research outfit, publishing since 2001.
    Why follow: Multi-decade short-research perspective.
11. @hntrbrkmedia — Hunterbrook. "Accountability. News & Investigations. No ads. No paywalls." Investigative journalism with an in-house long/short fund.
    Why follow: Different model — journalism-grade investigations with a fund attached.
12. @WolfpackReports — Wolfpack Research. Short-biased research firm founded by Dan David.
    Why follow: Niche short-research on small/mid-cap and Asia-exposed names.
13. @FriendlyBearSA — The Friendly Bear. Independent short-focused account, fixture of my multi-year recommendations.
    Why follow: Independent voice in the activist-short ecosystem.
14. @BonitasResearch — Bonitas Research. "Activist short seller. Voicing opinions."
    Why follow: Active short-research firm publishing on under-covered names.
15. @FuzzyPandaShort — FuzzyPanda. "Short-only. Exposing Stock Promotions, Frauds, BK's is what we do best."
    Why follow: Specialist coverage of stock-promotion schemes and bankruptcy-bound issuers.
16. @ScorpionFund — Scorpion Capital. "Activist short selling focused on frauds and promotes."
    Why follow: Fraud-and-promotion-focused activist short reports.
17. @SnowCapResearch — Snowcap. Investment firm "focused on deep research and active engagement."
    Why follow: Engagement-driven research, not a pure short shop.
18. @IcebergResear — Iceberg Research. "Revealing financial manipulation and accounting frauds."
    Why follow: Forensic accounting-driven shorts on global issuers.
19. @NonGaap — Mike (NonGaap Investing). "Mostly tweet about investing, governance, strategy, board dynamics, & random equity research topics."
    Why follow: Best-in-class corporate governance and options-grant analysis on X.
20. @footnoted — Michelle Leder. "Reading SEC filings obsessively for the past 20 years. Home of the Friday Night Dump."
    Why follow: Footnote-level disclosure analysis from the analyst who created the niche.
21. @TheIpHawk — IPHawk. "Paid Stock Promotions, Patents & Investments."
    Why follow: Real-time tracking of paid stock-promotion campaigns.
22. @sharesleuth — Chris Carey. "Investigative business reporter."
    Why follow: Long-running investigative coverage of microcap fraud.

Best Emerging Hedge Fund Managers on X in 2026

1. @hkuppy — Kuppy (Praetorian Capital). Macro-driven hedge fund; runs Kuppy's Korner blog. Idea Brunch interviewee.
   Why follow: Independent macro thinking from a fund manager who updates publicly.
2. @Seawolfcap — Porter Collins (Seawolf). "Value investor, short seller, and 2-time Olympian." Big Short alum.
   Why follow: Long/short financials with a public track record.
3. @gatorcapital — Derek Pilecki (Gator Capital). "Portfolio manager — Financials."
   Why follow: Specialist long/short coverage of bank and financial stocks.
4. @AltaFoxCapital — Connor Haley. "Long-term focused investment firm out of Fort Worth, TX."
   Why follow: Small/mid-cap activist long/short campaigns.
5. @SuperMugatu — Dan McMurtrie (Tyro Partners). Consumer/tech-focused L/S manager.
   Why follow: Public commentary from a sharp consumer-tech long/short PM.
6. @CliffordSosin — Clifford Sosin (CAS Investment Partners). Concentrated long-biased PM.
   Why follow: Concentrated value perspective from a working hedge fund manager.
7. @WorchCapital — Ryan Worch. "Principal of a growth-oriented long/short equity strategy."
   Why follow: Growth-tilted long/short ideas.
8. @GavinSBaker — Gavin Baker (Atreides Management). Tech-focused L/S CIO.
   Why follow: Public commentary from one of the more vocal tech L/S managers.
9. @orrdavid — David Orr (Militia Capital). Hedge fund + ETF; Idea Brunch interviewee.
   Why follow: Off-the-beaten-path equity ideas from a working PM.
10. @stoic_point — Stoic Point Capital Management. Long/short equity and de-SPACs.
    Why follow: L/S coverage of post-SPAC names where most managers don't operate.

Best Value Investing and Special Situations Accounts on X in 2026

1. @RagingVentures — Bill Martin (Raging Capital Ventures). Mid-cap value + commentary on tech and start-ups; runs a free quarterly newsletter.
   Why follow: High-conviction value ideas from a manager I have called "criminally underfollowed."
2. @1MainCapital — Yaron Naymark. Concentrated long-biased high-quality growth investor.
   Why follow: Concentrated quality-growth ideas from an emerging manager.
3. @HaydenCapital — Fred Liu. "Global investor. Lifelong learner."
   Why follow: Global growth-value ideas with a long-form commentary style.
4. @JohnHuber72 — John Huber (Saber Capital Management). Long-term compounder investor; publishes investment notes.
   Why follow: Long-term value with public investment notes.
5. @TSOH_Investing — Alex Morris (TSOH Investment Research). Author of Buffett & Munger Unscripted.
   Why follow: Concentrated compounder portfolio with deep written research.
6. @AndrewRangeley — Andrew Walker (Yet Another Value Podcast). Special situations + frequent investor interviews.
   Why follow: Mid-cap value, special situations, and one of the better investor podcasts on the network.
7. @iancassel — Ian Cassel (MicroCapClub). Microcap-focused investor; author of Stock Picker.
   Why follow: Canonical voice in microcap investing.
8. @alluvialcapital — Dave Waters (Alluvial Capital). "I buy weird, weird stuff."
   Why follow: Deep microcap and special-situations value.
9. @natstewart5 — Nat Stewart. Small/microcap newsletter for professional investors; deep value, GARP, special situations.
   Why follow: Concise small-cap value research.
10. @LaughingH20Cap — Laughing Water Capital. "Value-focused private investment partnership focused primarily on public equities."
    Why follow: Value-leaning long perspective from a working partnership.
11. @JonCukierwar — Jon Cukierwar (Sohra Peak Capital Partners). Concentrated global equity investor.
    Why follow: Concentrated global equity ideas from an emerging manager.
12. @blueoutliercap — Blue Outlier. "USN veteran, tar heel, value investor."
    Why follow: Value/special-situations coverage from an emerging manager.
13. @aaronjsallen — Merion Road. "Miami-based fundamental investor."
    Why follow: Small-cap fundamentals from a working PM.

Best Macro and Banking Accounts on X in 2026

1. @AndurandPierre — Pierre Andurand. "Hedge fund manager specialized in commodities."
   Why follow: Commodities and oil macro from a fund manager who posts publicly.
2. @PhilTimyan — Phil Timyan. "Private investor, hedge fund manager, and blogger with over 25 years professional experience in community bank stock investment and shareholder activism."
   Why follow: Single best community-bank specialist on X.
3. @John_Hempton — John Hempton (Bronte Capital). Long-running short-and-long manager.
   Why follow: Global L/S perspective with a multi-decade publishing history.
4. @doomberg — Doomberg. Anonymous energy and finance Substack.
   Why follow: Energy and finance commentary that frequently moves the broader macro conversation.
5. @10kdiver — 10-K Diver. "I help people understand the fundamentals of finance and investing."
   Why follow: Plain-language threads breaking down financial concepts — useful for any reader, regardless of category.

How to Build a Curated FinTwit Feed

The biggest mistake is following 50 accounts in one feed. Use X Lists to separate them by use case — a short-research list, a value list, a macro list — and switch between them depending on what you're working on. The four lists I maintain are public; the links are below. Pair them with the free research tools I keep on my site for the slower, document-driven side of the work.

Review your follows quarterly. Accounts go quiet when managers are deep in a position, get commercial when someone takes on sponsorships, or drift focus over time. A 15-minute review keeps the feed high-signal.

My Public X Lists

• Short Activists
• Emerging Managers
• Underfollowed Accounts
• Must Follows 2026

FAQ

Who is Edwin Dorsey? I'm the founder of The Bear Cave, an investigative newsletter on corporate misconduct, and Sunday's Idea Brunch, an interview newsletter with emerging fund managers. I'm a Stanford economics graduate.

What is FinTwit? Financial Twitter — the corner of X where investors, fund managers, and forensic researchers share market analysis. There is no separate platform; FinTwit is defined by who you follow.

What is short idea generation? The process of finding stocks that are overvalued, misleading investors, or experiencing deteriorating fundamentals — i.e., the kind of company a short-seller would bet against. For a worked example from my own research, see KinderCare down 70% since investigation.

Who are the best short-sellers to follow on X in 2026? Marc Cohodes (@AlderLaneEggs), Hindenburg Research (@HindenburgRes), Muddy Waters (@muddywatersre), Culper (@CulperResearch), and Spruce Point (@sprucepointcap) are the firms I track most closely. The full list of 22 short and forensic accounts is in the section above.

How do I find good investing accounts on X without the noise? Start with the four public X Lists linked above. Each is grouped by use case so you can build a research feed without sorting through thousands of accounts manually.

Are FinTwit accounts a reliable source for investment ideas? They're a useful input, not a decision-making tool. The accounts above help you find ideas worth researching. They are not a substitute for doing your own due diligence.

Who is the best stock picker on X (Twitter)? That depends on your investment strategy. The 50 accounts in the list above are organized by approach — activist short sellers and forensic research (led by Marc Cohodes / @AlderLaneEggs, Hindenburg Research, Muddy Waters, Culper, and Spruce Point), emerging hedge fund managers, value investing and special situations accounts, and macro and banking analysts. Start with the section that matches the kind of stock picking you want to follow.

What is the best Twitter (X) account to follow for stock market news? For breaking corporate misconduct, fraud research, and activist short signals, the short sellers section above (Marc Cohodes, Hindenburg Research, Muddy Waters, Culper, Spruce Point) is the highest-signal cluster on FinTwit. For broader market commentary and institutional-grade analysis, see the macro and banking section. Every account in the list is followed by Edwin Dorsey personally — the curation keeps signal-to-noise high.

KinderCare is now down approximately 70% since The Bear Cave's investigation earlier this year, as the company lowers guidance again.

The company receives nearly one billion dollars in government subsidies and faces widespread child abuse allegations.

The Business Model

KinderCare operates around 1,500 daycares across 41 states and calls itself "the largest private provider of high-quality early education and childcare services in the United States."

Investors believe KinderCare can continue its private equity growth playbook in the public markets and raise prices, cut costs, and grow through acquisitions to dominate America's fragmented childcare landscape.

Safety Concerns

I believe KinderCare often fails to deliver the safe and nurturing environment it promises parents and taxpayers.

Toddlers escape from the KinderCare daycares onto busy roads, are left alone, are locked inside KinderCare buildings and buses, and are physically and verbally abused, with many cases going unreported until bystanders raise an alarm or video evidence circulates.

Conclusion

In summary, KinderCare is a flawed business that harms the children and families it claims to support.

Follow me on X or Patron View for more.

For more accounts I follow for short research, see my 50 best finance and investing X accounts for 2026.

AppLovin’s Fall

Earlier today, AppLovin stock experienced a 15% drop. This occurred after a Bloomberg reporter released information regarding an SEC investigation into the company. But how can you be among the first to know about these investigations and related news?

FOIASearch.com

FOIASearch.com is a website created to simplify searching through the SEC’s Freedom of Information Act (FOIA) logs. By entering a company name, like AppLovin, you can view all FOIA requests filed with the SEC that mention the company.

Crucially, you can also see how the SEC responded. A “B7A exemption” indicates the SEC believes releasing related records could interfere with an ongoing enforcement investigation, strongly suggesting that an investigation is underway.

The AppLovin Example

In July, a Bloomberg reporter filed a FOIA request concerning a potential investigation into AppLovin. In August, the SEC responded with a B7A exemption, effectively confirming the existence of an investigation.

Notably, AppLovin hadn’t disclosed this investigation. The information was newsworthy enough to be included in a newsletter two weeks prior to the public announcement, highlighting the likely undisclosed SEC investigation. The subsequent news report triggered the stock’s fall.

Beyond One Company

The power of FOIASearch.com isn’t limited to AppLovin. You can investigate other companies, like Roblox, and observe significant SEC investigative activity. Conversely, searching for a company like Sezzle reveals FOIA requests without any B7A exemptions, suggesting a lack of SEC investigation.

Newsroom Intel

You can even search for entire newsrooms to gain insight into their potential areas of focus. For example, viewing FOIA requests filed by The Wall Street Journal can serve as an indicator of stories they’re developing.

Portfolio Alerts

Instead of manually searching the website, you can sign up for email alerts related to your portfolio and desired news publications. By entering companies like Tesla, Apple, and newsrooms like The Wall Street Journal and Bloomberg, you’ll receive monthly updates from FOIASearch.com. These updates will detail SEC FOIA requests matching your search terms and note any B7A exemptions issued by the SEC.

This tool simplifies navigating the SEC’s monthly FOIA logs, which can be complex and often overlooked by most investors.

Conclusion

FOIASearch.com offers a unique advantage, enabling you to anticipate market-moving news by tracking SEC FOIA requests and responses. This proactive approach helps you stay ahead of the curve in the stock market.

By using this tool, you can gain valuable insights into potential SEC investigations and news stories before they become public knowledge. Knowledge is power, and FOIASearch.com puts that power in your hands.

Ready to take control of your investment strategy? Visit FOIASearch.com today to sign up for alerts and uncover potential SEC secrets.

Follow me on X or Patron View for more.

These scams have a specific pattern that often starts small to gain your trust before escalating.

Keep reading below to know more about what I talked about.

Video Gallery

Watch the discussion below, or click here to watch it full on YouTube.

Modern stock scams start with small wins, then escalate to larger positions.

👉 Watch the full video with @StockJabber here:https://t.co/CdP2ZwIUkG pic.twitter.com/t3jVma2Hte— Investors Underground (@IUTraders) September 7, 2025

Talking Points

Below are some of the most important things we touched on in the discussion.

• How I went from college internships to starting The Bear Cave
• How Chinese pump-and-dump scams siphon $10B+ annually
• The mechanics of WhatsApp group recruitment & fake trades
• Why timing is critical when shorting scam stocks
• Real-world victims losing tens of thousands of dollars
• My decision to not short — only rely on subscriptions
• The role of loneliness and AI in enabling scams

Conclusion

The key takeaway is that modern stock scams are designed to be deceptive, starting with small, believable wins before moving to larger, more dangerous positions.

By recognizing this pattern of escalation, investors can better protect themselves from these fraudulent schemes.

Follow me on X or Patron View for more.

Keep reading for a brief overview of the key points I covered.

Video Gallery

Watch the full episode below, or click here to watch it on YouTube.

https://www.youtube.com/watch?v=Sv2WoKmSXP8

Massive Scale

As I explained in the podcast, these are not small-time scams. The operations behind them are huge and highly organized, often employing hundreds of people throughout Southeast Asia to execute these fraudulent schemes.

Predatory Methods

These intricate scams prey on vulnerable people. I've found they utilize specific, modern tactics to lure and trap their victims, primarily through:

• Sketchy, AI-generated advertisements on social media.
• Recruitment into private Whatsapp groups where the manipulation occurs.

Conclusion

The most critical takeaway is that large-scale Chinese stock scams are actively and successfully targeting everyday investors with sophisticated methods. These groups leverage modern tools like messaging apps and AI-generated content to build trust before executing schemes that cause stocks to collapse, leading to significant losses for their victims.

It is crucial for all investors to remain vigilant against these predatory tactics. For more of my in-depth investigations and reports on this and other market issues, consider subscribing to The Bear Cave newsletter.

Related article: Fighting Back Against Chinese Stock Scams

These sophisticated schemes are wiping out investor savings while enriching scammers who operate with impunity across international borders.

But now there’s a way to fight back.

The Problem

Overseas stock manipulators are using WhatsApp groups to pump and dump U.S.-listed Chinese stocks, wiping out billions in investor savings.

These scammers target retail investors with promises of quick profits, only to disappear once they’ve manipulated stock prices and cashed out.

The scale of this theft is staggering, yet many investors remain unaware of how these schemes operate.

The Solution

I made a website so we can expose the scams and fight back. StopNasdaqChinaFraud.com provides a platform where investors can see how scammers operate and contribute to stopping them.

This resource offers a public database where suspicious activity can be documented and shared. The website reveals the tactics used by these overseas manipulators and helps investors identify red flags before they become victims.

How It Works

You can help stop them through three simple steps.

1. Upload screenshots of suspicious WhatsApp chats to our public database.
2. Your evidence reveals how the schemes work, warns other investors, and helps us spot the next collapse before it happens.
3. Please share this website with others.

I made a short video talking about this website. Watch it below.

Every year, tens of billions of dollars are being stolen by overseas stock manipulators pumping and dumping small Nasdaq-listed Chinese companies.

I made a website so we can expose the scams and fight back. pic.twitter.com/Y6RYwKhtw9— Edwin Dorsey (@StockJabber) August 7, 2025

Fight Back Now

The fight against these billion-dollar scams starts with awareness and collective action.

Every screenshot uploaded, every warning shared, and every investor educated brings us closer to stopping these overseas manipulators.

Visit StopNasdaqChinaFraud.com today to see how scammers operate, contribute your evidence, and help protect fellow investors from these devastating schemes.

Together, we can expose the fraud and fight back against those who are stealing billions from hardworking investors.

Follow me on LinkedIn or Patron View for more content like this.

In retaliation, the company called my college and even sent a private investigator to my house.

Stock ultimately fell ~50% before being acquired.

Follow me on LinkedIn or Patron View for more content like this.

New tools are emerging to help investors and analysts cut through the noise and find critical information in seconds rather than hours.

Here are my top 3 tools.

Comment Letter Search

Comment Letter Search makes finding high-risk SEC comment letters effortless.

These regulatory exchanges often reveal the most pressing concerns about a company’s financial reporting, giving investors early warning signs that traditional analysis might miss.

FOIA Search Logs

FOIA search transforms SEC FOIA log searches from a tedious manual process into instant results.

Freedom of Information Act requests can uncover what other investors and analysts are investigating, providing valuable insight into emerging concerns and opportunities.

8-K Search Filings

8K search delivers minute-by-minute tracking of 8-K filings.

These current reports contain material events and corporate changes that can move markets, making real-time monitoring essential for staying ahead of the competition.

Conclusion

These tools represent a new approach to financial research – one that prioritizes speed and accessibility without sacrificing depth. The goal is making comprehensive stock analysis faster and more efficient for everyone.

Quick overview of what each tool offers:

• CommentLetterSearch.com – Find high-risk SEC comment letters instantly
• FOIAsearch.com – Search through SEC FOIA logs in seconds
• 8Ksearch.com – Track 8-K filings minute-by-minute

Ready to accelerate your research process? Try these tools today.

Follow me on LinkedIn or Patron View for more content like this.

With a career spanning three decades, Maj has invested in numerous multi-bagger microcaps and played a significant role in exposing the “China Fraud” stock listings in the early 2010s.

Background and Passion

Maj’s interest in investing was first sparked in high school, influenced by his father and watching the nightly business report on PBS.

His journey began with a mock investment contest where a painful lesson was learned: always do your own research.

After a company he invested in went bankrupt on the advice of his teacher, he never forgot the lesson. The true turning point came during his first year of college when his dad gave him Peter Lynch’s book, “One Up On Wall Street.” After reading it twice in five days, he knew he wanted to invest for a living.

This newfound passion led him to major in finance, but he found his real education came from spending countless hours in the college library reading Value Line, not from his professors who preached the efficient market hypothesis.

It was during college that he bought his first real stock, the very same company from his high school contest that had gone bankrupt, Storage Technology.

It had just emerged from bankruptcy, and he made a quick 60%, giving him his first taste of the rewards that come from getting ahead of the crowd.

GeoInvesting

After graduating in 1992, Maj began his career at Vanguard. He was so passionate about investing that he spent his lunch breaks in a conference room, eating a salami sandwich and calling management teams.

After passing two CFA exams, he realized the corporate world wasn’t the right fit. He was making good money in the stock market and was determined to go full-time.

After saving up $30,000, he left Vanguard in February 1994. In 2008, he started GeoInvesting without a specific profit motive, but with a desire to share research, prove that you could make money in smaller-cap stocks, and provide the everyday investor with access to quality research.

The platform began by publishing free content to build a network and didn’t introduce a paid subscription until 2014.

GeoInvesting vs. MS Cliff Notes

Maj clarifies the difference between his two platforms. GeoInvesting is a comprehensive bundle of products, including morning emails, model portfolios, and video interviews. It’s designed for those who want to do their own research but also appreciate direct ideas backed by research.

The Substack, Microcap Investing Cliff Notes, is geared more toward increasing idea flow and serves as an early look into his research pipeline. It is centered around the creation of the first-ever index of high-quality microcap companies, the MS Microcap Quality Index (MSMqi).

Research Process

Maj’s research process is anything but “asset light.” He is focused on understanding a story’s narrative, looking beyond the quantitative factors that anyone can screen for. He believes the biggest alpha in the microcap universe comes from combining qualitative and quantitative research.

His process consistently involves two things: reading press releases and tracking momentum. He treats press releases like “treasure maps,” analyzing how things are said, what is emphasized, and how sentiment changes from quarter to quarter. This approach allows for what he calls “information arbitrage”—when public information is available, but no one is connecting the dots.

His team has identified key characteristics and factors that point to potential winners.

He describes one of his “golden multibagger setups” that gives him goosebumps:

• Strategy for wallet share gains (more revenue from current customers). Could include new products/services and/or cross-selling opportunities between company divisions.
• Adding recurring revenue or routine maintenance service revenue.
• Increasing operating leverage.

1. Strategy for wallet share gains (more revenue from current customers). Could include new products/services and/or cross-selling opportunities between company divisions.
2. Adding recurring revenue or routine maintenance service revenue.
3. Increasing operating leverage.

Uncovering Fraud

The team at GeoInvesting famously stumbled into the “China fraud saga” around 2010.

Initially, Maj was trying to prove the shorts wrong, but after interacting with CEOs and sending a team to China, he received a stark warning: “get the fuck out.” They were all frauds. This led to an intense period of exposing companies with phantom customers and vanishing cash, culminating in the documentary The China Hustle.

He notes that today, the same fraud playbook exists, but it has moved from the OTC markets to the major exchanges.

Management

When interacting with management, Maj looks for several positive signs and red flags.

He values leaders who intimately know their customers, understand the importance of scaling, and can admit what they don’t know.

Alignment is key; he wants to see management teams that own shares through real purchases and treat all shareholders with the same importance.

Conversely, red flags include management teams that are cocky, that can’t seem to solve long-standing problems, and that measure profitability solely by EBITDA while consistently losing money. He is particularly wary of companies that file a “lazy” shelf to raise equity, as he believes it often caps the stock’s potential.

Conclusion

Maj Soueidan’s journey from a curious high school student to a seasoned microcap investor is a testament to the power of independent research, relentless curiosity, and the pursuit of “information arbitrage.”

His approach focuses on deep fundamental analysis combined with a keen eye for narrative and management quality.

To get all the details from this interview, you can read the full article by clicking here.

No one knows BDCs better than Nick, and I’m a happy subscriber to his various BDC publications. If you invest in BDCs, this interview is for you.

Nicholas Marshi is the Chief Investment Officer of BDC Investment Advisors and publisher of three specialized BDC publications.

His insights offer valuable lessons for both professional and individual investors looking to understand this distinctive asset class.

Key Takeaways From the Interview

Here are some of the key takeaways.

Specialization and Deep Knowledge

Marshi’s journey began when he successfully sold a company from his private equity fund and chose to manage the proceeds himself rather than hand them to a money manager.

His background in lending and private equity gave him confidence that he could succeed in the BDC space. “I felt that given my background in lending and private equity, I had a better chance of investing success than in most anything else out there.”

Thorough Research Is Non-Negotiable

“I am an insecure investor. I always want to know as much as possible about the BDCs I might or might not invest in.”

Marshi reads every filing, press release, and conference call transcript for the 46 public BDCs he follows.

He builds comprehensive data tables and familiarizes himself with individual portfolios, identifying the roughly 150 companies out of 7,000 BDC-financed companies that are large enough and troubled enough to materially impact BDC performance.

BDCs Are More Complex

“BDCs are not just lenders. They are also minority equity investors in the companies they lend to, and when needed, they can become turnaround specialists. At times, they even command and control portfolio companies.”

This complexity means investors need to look beyond simple credit results when evaluating BDCs.

Not All BDCs Are Created Equal

There are huge variations in BDC performance because they operate in five distinctly different segments of the non-investment grade market, each with very different economics, risks, and competitors.

“You really can’t compare a venture-debt BDC, principally lending to start-ups with no profit history, with a BDC serving borrowers in the upper middle market involved with billion dollar-loans.”

Patience and Nerves of Steel

BDC investing requires both patience and strong nerves.

“Having and holding and re-investing those monthly or quarterly payouts is what generates superior returns. Patience is very important in BDC investing – a quality many investors lack, including myself at times.”

The sector can be highly volatile – during the GFC, Ares Capital dropped 87%, and in March 2020, the sector dropped more than 50% in one month.

Outperformance Is Possible

While BDCs are “handcuffed by their format” with earnings that must be paid out rather than retained and limited leverage, real outperformance is still achievable.

Over the last 5 years, when the S&P 500 climbed 96%, 27 of 37 BDCs performed better – some by as much as three times.

Over 10 years, 9 of 32 BDCs outperformed the S&P’s remarkable 215% total return.

Structure Provides Downside Protection

The BDC format makes it difficult for investors to lose too much money with a buy-and-hold approach.

Over the last 5 years, not one BDC ended up in the red, and over 10 years, only 4 out of 32 BDCs were losers.

However, this protection disappears for investors who “flit from BDC to BDC.”

Missing the Bigger Picture

“Ironically, investors who see BDCs just as vehicles to harvest dividends and fail to reinvest are missing out on the power of compounding.”

Those treating BDCs as bond proxies, expecting safe, steady dividends are often disappointed, as dividends fluctuate with interest rates, credit losses, and payout strategies.

Quality Management Teams

While Marshi wouldn’t speak ill of any management team, he highlighted three organizations he particularly admires: Ares Capital (the biggest and one of the oldest), Saratoga Investment (which rescued a near-bankrupt BDC and transformed it), and Barings BDC (which built a diversified portfolio from scratch).

He notes it may not be coincidental that the BDCs he admires most are the ones that have performed best for him.

Market Conditions Require Caution

“Right now, BDC prices are just recovering from Liberation Day, and many are trading at healthy discounts to their price just 3 months ago.”

However, with recession predictions and concerns about credit investments, Marshi emphasizes it’s “a time to be more careful than usual,” though he remains optimistic about select opportunities in the space.

Conclusion

Nicholas Marshi’s approach to BDC investing demonstrates that success in specialized markets comes from deep knowledge, thorough research, and the discipline to stick with quality investments through volatile periods.

His insights reveal that while BDCs may not offer the explosive returns of venture capital, they can provide attractive risk-adjusted returns for investors willing to do their homework and maintain a long-term perspective.

For those considering BDC investments, Marshi’s emphasis on understanding the complexity of these vehicles and the importance of selecting quality management teams provides a valuable framework for evaluation.

With approximately 1,500 locations across 41 states, KinderCare Learning Companies (NYSE: KLC) has positioned itself as the dominant player in American childcare. Their $1.51 billion operation receives substantial government funding and serves primarily working families, including a special program for military personnel.

But as we take a closer look, we start to uncover alarming safety failures affecting children across the country.

The Big Picture: What’s Happening at KinderCare?

My investigation reveals a troubling reality behind this corporate giant’s operations—one that stands in stark contrast to its marketed image.

Behind KinderCare’s rapid expansion lies a concerning business approach where financial metrics may be overshadowing child welfare.

The significant taxpayer subsidies KinderCare receives demand a higher standard of accountability than what I’ve observed.

Children Finding Their Way Out

A truly alarming pattern emerged during my investigation—toddlers escaping from facilities without staff awareness:

“He’s been in the street, he’s been in Labcorp, he’s in the arms of a good stranger. And KinderCare is oblivious.” — A grandmother speaking about her 3-year-old grandson who wandered away from a KinderCare in 2024.

What’s particularly disturbing is that in multiple cases, family members only learned about these incidents after strangers’ videos went viral online.

These security breaches point to fundamental oversight problems.

When children can walk away from facilities unnoticed, it suggests serious staffing or procedural deficiencies that can’t be dismissed as isolated incidents.

Locked In and Left Behind

On the flip side of escapes, I found multiple incidents where children were forgotten:

“I do not know how I could live with it if he had died.” — A mother whose 5-year-old was left in a hot KinderCare bus for two hours.

In another troubling case, police had to break into a Florida facility to rescue a 2-year-old who was locked inside alone after hours when her mother arrived slightly late for pickup.

Basic attendance protocols appear to be failing at multiple levels.

These aren’t simple oversights but serious lapses that place children in potentially life-threatening situations, raising questions about training and supervision standards.

Abuse Behind Closed Doors

Perhaps most disturbing were the documented cases of mistreatment:

“The baby I brought home that day is not the same baby I dropped off… I wish I didn’t send him to KinderCare that day. I wish I didn’t. That day changed everything.” — Kimberly Hopson, after her 11-month-old tested positive for cocaine following a day at KinderCare in 2024.

In Texas, parents became so concerned they hid a recording device in their toddler’s clothing, capturing a staff member threatening:

“I’m going to beat both of y’all. That’s what I’m going to do. Touch it and you die.”

These cases reveal troubling gaps in employee screening and supervision.

The fact that parents felt compelled to use secret recording devices speaks volumes about the breakdown of trust between KinderCare and families.

A Pattern of Hiding Problems

A former employee provided crucial insight into KinderCare’s internal practices:

“There were also a couple of times I would write an injury report and give it to my boss, who would literally rip it up in my face and say, don’t tell the parents this.”

This testimony aligns with a pattern I observed throughout my investigation—incidents primarily coming to light through outside intervention rather than KinderCare’s own reporting.

This suggests a culture where problem-hiding takes precedence over problem-solving.

The whistleblower’s account raises serious questions about how many incidents remain concealed from parents and authorities.

What Parents Are Saying

Public sentiment about KinderCare appears increasingly negative, with commenters noting:

“KinderCare needs to be closed permanently. All KinderCares are shady. The ones in Texas have issues too; I am convinced it’s the entire KinderCare company.”

The geographic diversity of these comments suggests problems extend beyond individual locations to the company’s overall operations and culture.

Bottom Line

My investigation points to a fundamental disconnect between KinderCare’s public image and operational reality.

The documented pattern of safety failures across multiple facilities suggests systemic issues rather than isolated incidents.

For parents considering childcare options, for policymakers evaluating childcare funding, and for investors examining KinderCare’s business model, these findings warrant serious attention.

DISCLAIMER: This is an excerpt that summarizes key findings from my full investigation. For the complete details, please refer to the original article on my Substack here.

Here's what I've learned: most people don't know these exist.

But they're absolute gold mines for due diligence.

I'm sharing my go-to list of government databases that have consistently given me an edge.

These are free, public, and packed with information you won't find anywhere else.

Overview

These databases have helped me spot red flags months before they hit the news.

Here's the full list.

• CFPB Consumer Complaint Database
• SEC FOIA Logs
• Wisconsin Department of Financial Institutions FDD database
• Open Payments Data
• CMS Drug Spending
• Open Corporates
• Federal Procurement Data System
• NYC Health Restaurant Inspection Scores
• U.S Energy Information Administration
• Manufacturer and User Facility Device Experience (MAUDE) Database
• BrokerCheck by FINRA
• FDIC Search Form
• ClinicalTrials.gov
• RankMyHotel

Deep Dive

I use each of these databases differently, but they all serve one purpose: getting information others don't have.

Think of this as your cheat sheet for finding the good stuff.

Here's a full breakdown of what each database is actually used for, and how I leverage them for research.

CFPB Consumer Complaint Database

This is your window into consumer financial drama. Search millions of complaints about banks, credit cards, and lenders. I use it to spot emerging problems before they become headlines.

SEC FOIA Logs

Want to know what Wall Street is digging into? These monthly logs show what information people are requesting from the SEC. It's like getting a peek at other investors' research lists.

Wisconsin DFI FDD Database

Here's a secret: Wisconsin publishes nearly every franchise disclosure document. Want to know McDonald's unit economics? It's all here. This is gold for retail and restaurant investors.

Open Payments Data

Follow the money in healthcare. See exactly which doctors are getting paid by drug companies for speaking fees, consulting, or even just fancy dinners.

CMS Drug Spending

Medicare and Medicaid's drug spending data tells you which medications are really making money. I track spending trends here before earnings calls.

Open Corporates

Need to know who's really running a private company? This is your first stop. It'll show you executives, board members, and state registrations fast.

Federal Procurement Data System

If you're investing in government contractors, this database is essential. See who's winning the big contracts and for how much.

NYC Health Restaurant Inspection Scores

Perfect for restaurant investors. Check health inspection scores across entire chains. It's a great way to spot operational issues.

U.S Energy Information Administration

My go-to for independent energy market analysis. The data here is more reliable than what you'll get from most industry reports.

Manufacturer and User Facility Device Experience (MAUDE) Database

Medical device problems show up here first. Ten years of adverse event reports that can signal big problems for device makers.

BrokerCheck by FINRA

Before trusting any financial professional, check their record here. It's saved me from some questionable characters.

FDIC Search Form

Want to know which banks are in trouble? Search through enforcement actions here. It's like a early warning system for bank problems.

ClinicalTrials.gov

Track drug development pipelines here. Every clinical trial gets listed, which means you can spot problems or progress before the market does.

RankMyHotel

Texas-only, but incredible for hotel investors. Get actual revenue figures for individual hotels. Perfect for comparing performance.

Conclusion

These databases won't make you a better investor overnight.

But they will give you information most investors don't have.

The real edge comes from using them consistently and knowing what to look for.

Start with one that matches your investment focus. Get familiar with it. Then expand.

Just remember: the best data is useless if you don't act on it.

Thanks for reading. Follow me on X, LinkedIn, or Patron View for more.

Complete List of A+ Free Resources

1. Google Advanced Search — Use Google’s advanced search filters to find unique information. For example, filter by time for older results or search for: [Company name] filetype:pdf site:.gov to bring up interesting government records related to the company.
2. SEC Full-Text Search — Search through 20 years of SEC filings for specific terms, people, or entities.
3. PCAOB Auditor Search — Find the auditor and specific audit partner for any company, as well as their track record. Use the search bar in the top right and click auditor search.
4. Wayback Machine — A non-profit that regularly archives millions of the most visited sites. Use it to see how a site or specific webpage changes over time.
5. Webpage Archive — An alternative to the Wayback Machine that makes it incredibly easy to archive digital webpages. It often has several archives of media articles the week of publication, making it easy to track any changes over time.
6. Perplexity AI — Powerful AI agent that can often provide answers when Google fails.
7. Diffchecker — Compare any two bodies of text for potential differences (e.g., compare a company’s 2023 and 2024 risk factor disclosures).
8. IBorrowDesk — Website with stock borrow rates and short availability.
9. SocialBlade — Follow the social media growth of a company or individual. Two other strong alternatives include HypeAuditor and ViewStats (YouTube only).
10. Glassdoor — Go reverse chronological and read through all reviews, pay extra attention to complaints about toxic work environment, sales culture, leadership, turnover, and fraud allegations. Also, look to see if reviews are evenly spaced or clustered around a day or week (a sign the reviews may be manipulated).
11. BBB — A non-profit consumer review and business accreditation site. Will often issue public alerts for particularly problematic businesses.
12. SiteJabber — Wide collection of consumer reviews for online businesses.
13. TrustPilot — Another good consumer review site.
14. ReverseWHOIS — Shows you all websites registered to a particular company/email. For example, here is a list of ~12,000 public web domains owned by Apple.
15. PACER — Find lawsuits against any company or individual.
16. Court Listener — Search millions of legal decisions by case name, topic, or company.
17. Hacker News — Search through the Y Combinator message boards for any company or topic to see what Silicon Valley thinks.
18. 10x EBITDA — A compilation of many hedge fund activist presentations.
19. X/Twitter — Amazing platform for equity research. Search by ticker and limit the search to “people you follow” to find high-quality tweets.
20. SEC comment letters — On EDGAR, search for a company then “CORRESP” or “UPLOAD” in the document type search to find SEC comment letters, which are a type of informal correspondence between the SEC and public companies that bring up unique issues.
21. Google Alerts — Set Google email alerts for news related to a specific company.
22. Google Trends — Long-term trends in search volume for certain terms on Google.
23. Reddit — Often will have surprisingly good content from industry experts or former employees.
24. TikTok — Great place to search for consumer sentiment on any brand/company.
25. LinkedIn — See employees, their former workplaces, and how they know each other (e.g., red flags: CFO went to the University of Phoenix or bank loan officers previously worked for banks that failed).
26. Value Investors Club — Public platform to share stock write-ups.
27. ImportYeti — Search 70 million U.S. customs sea shipment records instantly.
28. “The Sketchy Companies Paying YouTubers to Promote Their Stock” — Outstanding investigation exposing the anatomy of stock promotion schemes on YouTube.
29. “The Makings of a Multibagger” — Amazing Alta Fox Capital case study on 104 multi-bagger stocks.

Useful Databases

1. CFPB Consumer Complaint Database — Searchable database of millions of consumer complaints to the Consumer Financial Protection Bureau.
2. SEC FOIA Logs — SEC’s monthly disclosures about FOIA requests the SEC receives. Learn more about the value of SEC FOIA logs here and here.
3. Wisconsin Department of Financial Institutions FDD database — Find nearly any Franchise Disclosure Document (FDD) for franchisors that do business in Wisconsin.
4. Open Payments Data — Centers for Medicare & Medicaid Services database to search payments made by drug and medical device companies to physicians for speaking fees, consulting fees, and meal reimbursements,
5. CMS Drug Spending — Centers for Medicare & Medicaid Services database to provide greater transparency on spending for drugs in the Medicare and Medicaid programs.
6. Open Corporates — Quickly find the executives, board members, or state registration for private businesses. Go to the Department of State filing search for more information on any entity.
7. Federal Procurement Data System — Searchable database of U.S. government purchase orders. Great for researching military/government contractors.
   NYC Health Restaurant Inspection Scores — Easily search for health inspection scores by restaurant chain.
8. U.S Energy Information Administration — Independent statistics and analysis about U.S. energy.
9. Manufacturer and User Facility Device Experience (MAUDE) Database — MAUDE is a searchable database of medical device reports of adverse events involving medical devices over the last ten years.
10. ClinicalTrials— Searchable database of clinical research studies. Website maintained by the National Institutes of Health.

List of Short Activists

Below are all the short report authors summarized in The Bear Cave newsletter this year:

• Black Mamba Research (Website, @blackmambashort)
• Bleecker Street Research (Website, @Bleecker__St)
• Blue Orca Capital (Website, @blueorcainvest)
• Bonitas Research (Website, @BonitasResearch)
• Capybara Research (Website, @CapybaraShort)
• Citron Research (Website, @CitronResearch)
• Culper Research (Website, @CulperResearch)
• DF Research (Website)
• Fuzzy Panda Research (Website, @FuzzyPandaShort)
• GlassHouse Research (Website, @GlassH_Research)
• Gotham City Research (Website, @GothamResearch)
• Grizzly Research (Website, @ResearchGrizzly)
• Hindenburg Research (Website, @HindenburgRes)
• Hunterbrook Media (Website, @hntrbrkmedia)
• Iceberg Research (Website, @IcebergResear)
• J Capital Research (Website, @JCap_Research)
• Jehoshaphat Research (Website, @JehoshaphatRsch)
• Kerrisdale Capital (Website, @KerrisdaleCap)
• Muddy Waters Research (Website, @muddywatersre)
• Night Market Research (Website, @NMRtweet)
• NINGI Research (Website, @NingiResearch)
• Old Time REITster (Website)
• Safkhet Capital (Website, @SafkhetCapital)
• Scorpion Capital (Website, @ScorpionFund)
• Snowcap Research (Website, @SnowCapResearch)
• Spruce Point Capital (Website, @sprucepointcap)
• Sunshine Research (Website, @sunshine_rsrch)
• The Friendly Bear (Website, @FriendlyBearSA)
• Viceroy Research (Website, @viceroyresearch)
• Wolfpack Research (Website, @WolfpackReports)

Emerging Managers Worth Watching

• @Jaro_rogue — Rogue Funds, Small/Mid-Cap
• @blueoutliercap — Blue Outlier, value/special situations
• @orrdavid — Militia Capital, global L/S,
• @natstewart5 — N.A.S. Capital, value/small-caps
• @aaronjsallen — Merion Road, small-caps
• @Mike10947310 — Independent, small-caps
• @HindeGroup — Hinde Group, high-quality compounders
• @gatorcapital — Gator Capital, L/S financials
• @fin_capital — Findell Capital, L/S small-caps
• @Josh_Young_1 — Bison Capital, Oil/value investing
• @rgrfan — RF Capital, global equities
• @SafkhetCapital — Safkhet Capital, concentrated shorts
• @WorchCapital — Worch Capital, L/S growth-oriented
• @JeffreyCherkin — Tourlite Capital, L/S equity
• @PhilTimyan — Independent, community banks
• @stoic_point — Stoic Point, L/S equity and de-SPACs
• @JonCukierwar — Sohra Peak, concentrated global equities
• @LaughingH20Cap — Laughing Water, value-oriented
• @Seawolfcap — Seawolf Capital, L/S
• @hkuppy — Praetorian Capital, concentrated special situations
• @1MainCapital — 1 Main Capital, high-quality growth

Newsletters for Idea Generation

• Doomberg — The best energy & finance commentary
• The Captain’s Log — Lauren Balik shares actionable ideas
• Nat Stewart — Small-cap value ideas
• NonGAAP — Actionable insights into corporate governance matters
• Unemon — Sporadic differentiated L/S investment ideas
• The Technology Letter — Interviews with the CEOs/CFOs of major tech companies
• The Diff — Inflections in tech and finance
• Net Interest — Financial sector insights from a former hedge fund manager
• Behind the Balance Sheet — Investment ideas and professional thoughts from a retired hedge fund partner
• Bison Interests — Oil and gas commentary
• 1 Foot Hurdle — Cheap Japanese stocks
• Altay Capital — Cheap Japanese stocks
• Value Zoomer — L/S equity ideas
• Mostly metrics — A CFO draws back the curtain on metrics
• Overlooked Alpha — Differentiated stock ideas
• Chief’s Substack — A smart trader shares ideas
• Timyan — Phil Timyan on bank stocks
• Pernas Research — L/S equity ideas
• Market Sentiment — General market research
• 310 Value — Compounder/value ideas
• Clark Square Cap — Overlooked stocks and special situations
• John Hempton’s Newsletter — Thoughts from L/S investor John Hempton
• Generals and Workouts — Benjamin Graham style deep-value ideas
• Stock Narratives — Smart microcap ideas
• NoNameStocks — Smart nanocap ideas

Below are X lists for each group of accounts and you can find even more info on The Bear Cave newsletter site.

1. Short activists
2. Emerging managers

X Accounts For Idea Generation

Most Underfollowed

• @Taocentric12 — Former healthcare executive, talking about healthcare stocks
• @MultiplesCap — Hospitality executive and investor sharing occasional ideas
• @accelerationcap — Former OpenAI engineer with infrequent but smart tech tweets
• @CousinGraig — Equity ideas
• @BrokenMoats — Smart L/S investor
• @vikasxkumarbk — Senior Editor at The Capitol Forum, great actionable tweets
• @glbeaty — Smart L/S investor
• @ParthenosCap — Smart fund manager, up ~750% since January 2019 launch
• @red_dog_capital — L/S ideas and microcaps
• @emo__girl_ — L/S analyst with interesting ideas
• @TheWinklerGroup — Shares interesting nuggets from SEC filings
• @finphysnerd — Individual investor, global L/S ideas
• @catechwilliams — Very smart L/S equity ideas
• @PharmakoiBoy — Short research, with forensic accounting focus
• @Jaro_rogue — L/S mid-cap fund manager

Must Follows

• @laurenbalik — Independent researcher, great long/short tech ideas
• @Seawolfcap — Phenomenal L/S financials investor
• @RagingVentures — L/S ideas and more from Bill Martin
• @orrdavid — L/S fund manager, independent thinker
• @RealJimChanos — The OG
• @CrosscheckC — L/S generalist with a focus on airlines/industrials/shorts
• @AlderLaneEggs — Prolific short-seller Marc Cohodes
• @PD13158196 — Unique short ideas
• @BlueDuckCap — L/S equities
• @rsandler21969 — CIO of Eminence Capital, large L/S equity fund, occasionally shares ideas
• @maninapurpledr1 — Exposing small caps/pump and dumps
• @partners_road — Anonymous L/S hedge fund manager
• @GMTResearch — Exposing Asian frauds and promotes
• @Mike10947310 — Extremely smart microcap investor
• @ActAccordingly — Independent research provider
• @NonGaap — Actionable tweets about governance and disclosure changes
• @ParrotCapital — Deep due diligence into frauds and misconduct
• @FriendlyBearSA — The Friendly Bear short research
• @AureliusValue — Very smart independent short-seller
• @DeepSailCapital — L/S equities
• @akramsrazor — L/S tech ideas
• @PhilTimyan — Smart long/short financials investor
• @gatorcapital — Very smart L/S financial investor
• @colarion — Financials fund manager
• @CorpusCol — Financials investor
• @ChrisCamillo — Smart investor, good at following social media trends
• @stockgutter — Short ideas and stock promotions
• @AltayCapital — L/S equities and overseas investing
• @EricTheUmpire — L/S equities
• @OddDiligence — L/S event-driven trading
• @unemon1 — L/S equities
• @Craig_McDermott — L/S equities
• @OnodaCapital — L/S equities

1. Underfollowed accounts
2. Must follow accounts

And apologies in advance to the many great accounts I missed!

https://x.com/StockJabber/status/1870997540897710286

Not the old-school “buy this penny stock” kind.

These are written by portfolio managers, industry experts, and analysts who actually move markets.

Each one specializes in a specific niche, and they’ve changed how smart money finds ideas.

Overview

Here’s the full list of newsletters that are worth your time:

• Doomberg
• The Captain’s Log
• Nat Stewart
• NonGAAP
• Unemon
• The Technology Letter
• The Diff
• Net Interest
• Bison Interests
• 1 Foot Hurdle
• Altay Capital
• Value Zoomer
• Mostly Metrics
• Overlooked Alpha
• Chief’s Substack
• Timyan
• Pernas Research
• Market Sentiment
• 310 Value
• Clark Square Cap
• John Hempton’s Newsletter
• Generals and Workouts
• Stock Narratives
• NoNameStocks

Full Detailed Guide

Energy & Finance

Doomberg

• The gold standard for energy and finance commentary
• Known for connecting macro trends to specific opportunities

Growth & Value Ideas

The Captain’s Log

• Written by Lauren Balik
• Focuses on immediately actionable investment ideas
• Clear entry and exit points

Nat Stewart

• Specializes in small-cap value opportunities
• Deep research into overlooked companies

Corporate Analysis

NonGAAP

• Deep dives into corporate governance
• Spots red flags others miss in financial statements

Unemon

• Selective but high-quality long/short ideas
• Known for contrarian takes that work

Technology Focus

The Technology Letter

• Direct interviews with tech executives
• Gets answers to questions analysts don’t ask

The Diff

• Analyzes inflection points in tech and finance
• Strong focus on industry transitions

Financial Sector

Net Interest

• Written by a former hedge fund manager
• Deep insights into banking and fintech

Energy Sector

Bison Interests

• Focused purely on oil and gas
• Technical analysis meets fundamental research

International Markets

1 Foot Hurdle

• Specializes in undervalued Japanese stocks
• Focus on companies with strong balance sheets

Altay Capital

• Another expert in Japanese markets
• Looks for deep value opportunities

Investment Strategy

Value Zoomer

• Long/short equity ideas
• Focus on asymmetric opportunities

Mostly Metrics

• Written by a CFO
• Explains the metrics that actually matter

Hidden Opportunities

Overlooked Alpha

• Finds ideas others are missing
• Strong focus on risk/reward

Chief’s Substack

• Trading-focused perspective
• Practical market insights

Specialized Focus

Timyan

• Phil Timyan’s expert take on bank stocks
• Deep banking sector experience

Pernas Research

• Long/short equity ideas
• Focus on special situations

Market Research

Market Sentiment

• Broad market research
• Good for understanding macro trends

310 Value

• Focus on compounders and value plays
• Long-term perspective

Deep Value & Small Caps

Clark Square Cap

• Specializes in overlooked stocks
• Strong special situations analysis

John Hempton’s Newsletter

• Insights from a seasoned long/short investor
• Known for detailed research

Generals and Workouts

• Benjamin Graham-style deep value investing
• Focus on special situations

Micro & Nano Caps

Stock Narratives

• Smart microcap analysis
• Focus on undiscovered opportunities

NoNameStocks

• Ultra-small cap focus
• Finds opportunities others can’t cover

Conclusion

Don’t try to read all of these at once.

Pick 2-3 that match your investment style.

The best newsletters are the ones you actually read and act on.

Want to read more? I’m also on X, LinkedIn, and Patron View.

These are the people actually moving markets and finding opportunities.

I’ve broken them into two categories: established short sellers and up-and-coming managers.

For the long-form version with descriptions of each account, see my 50 best finance and investing X accounts for 2026.

Overview

• 30 established short-selling research firms
• 21 emerging managers specializing in different strategies
• All actively publishing research in the last year

Active Short Sellers

Each of these firms has published significant research through The Bear Cave newsletter:

• @BlackMambaShort – Black Mamba Research
• @Bleecker__St – Bleecker Street Research
• @blueorcainvest – Blue Orca Capital
• @BonitasResearch – Bonitas Research
• @CapybaraShort – Capybara Research
• @CitronResearch – Citron Research
• @CulperResearch – Culper Research
• @FuzzyPandaShort – Fuzzy Panda Research
• @GlassH_Research – GlassHouse Research
• @GothamResearch – Gotham City Research
• @ResearchGrizzly – Grizzly Research
• @HindenburgRes – Hindenburg Research
• @hntrbrkmedia – Hunterbrook Media
• @IcebergResear – Iceberg Research
• @JCap_Research – J Capital Research
• @JehoshaphatRsch – Jehoshaphat Research
• @KerrisdaleCap – Kerrisdale Capital
• @muddywatersre – Muddy Waters Research
• @NMRtweet – Night Market Research
• @NingiResearch – NINGI Research
• Old Time REITster
• @SafkhetCapital – Safkhet Capital
• @ScorpionFund – Scorpion Capital
• @SnowCapResearch – Snowcap Research
• @sprucepointcap – Spruce Point Capital
• @sunshine_rsrch – Sunshine Research
• @FriendlyBearSA – The Friendly Bear
• @viceroyresearch – Viceroy Research
• @WolfpackReports – Wolfpack Research

Emerging Managers to Watch

These managers are building track records in specific niches:

• @Jaro_rogue – Rogue Funds
  Focus: Small/Mid-Cap
• @blueoutliercap – Blue Outlier
  Focus: Value/Special Situations
• @orrdavid – Militia Capital
  Focus: Global Long/Short
• @natstewart5 – N.A.S. Capital
  Focus: Value/Small-caps
• @aaronjsallen – Merion Road
  Focus: Small-caps
• @Mike10947310
  Focus: Independent Small-caps Research
• @HindeGroup – Hinde Group
  Focus: High-quality Compounders
• @gatorcapital – Gator Capital
  Focus: Long/Short Financials
• @fin_capital – Findell Capital
  Focus: Long/Short Small-caps
• @Josh_Young_1 – Bison Capital
  Focus: Oil/Value Investing
• @rgrfan – RF Capital
  Focus: Global Equities
• @SafkhetCapital – Safkhet Capital
  Focus: Concentrated Shorts
• @WorchCapital – Worch Capital
  Focus: Long/Short Growth
• @JeffreyCherkin – Tourlite Capital
  Focus: Long/Short Equity
• @PhilTimyan
  Focus: Community Banks
• @stoic_point – Stoic Point
  Focus: Long/Short Equity and de-SPACs
• @JonCukierwar – Sohra Peak
  Focus: Concentrated Global Equities
• @LaughingH20Cap – Laughing Water
  Focus: Value-oriented
• @Seawolfcap – Seawolf Capital
  Focus: Long/Short
• @hkuppy – Praetorian Capital
  Focus: Concentrated Special Situations
• @1MainCapital – 1 Main Capital
  Focus: High-quality Growth

Conclusion

Don’t just follow these accounts blindly.

Use them as a starting point for your own research.

The best investors verify everything independently.

And remember: Even the most famous short sellers get things wrong.

Thanks for reading! You can follow me on X, LinkedIn, or Patron View for more updates.

Here are 12 resources I use regularly that can significantly improve your investment research process.

• SEC Full-Text Search – A powerful tool for searching through two decades of SEC filings. Perfect for researching specific terms, people, or entities across all public company documents.
• PCAOB Auditor Search – Look up any company’s auditor and audit partner history. Access detailed track records through the top-right search bar’s auditor search function.
• SocialBlade Analytics – Track and analyze social media growth metrics for any company or individual account over time.
• Wisconsin FDD Database – Access comprehensive Franchise Disclosure Documents for businesses operating in Wisconsin. An invaluable resource for franchise research.
• OpenCorporates Database – The world’s largest open database of companies. Find executives, board members, and state registrations for private businesses.
• Wayback Machine Archive – Internet Archive’s tool for viewing historical versions of websites. Invaluable for understanding how companies have evolved their messaging and offerings over time.
• ROIC.AI – Access up to 30 years of detailed financial statements for any public company, completely free of charge.
• iBorrowDesk – Track real-time borrow rates and short availability for any publicly traded stock.
• ShortSqueeze – Comprehensive data platform for tracking short interest across the market.
• SEC Form AP – Search tool for finding audit partners and their complete work history.
• r/SecurityAnalysis – Community-curated collection of recent hedge fund investor letters and analysis.
• 10x EBITDA – Complete repository of hedge fund activist presentations and investment theses.

2/ PCAOB Auditor Search

3/ SocialBlade

5/ OpenCorporates

6/ Wayback Machine

Additional Resources

Q4 2022 Letters & Reports
byu/Beren- inSecurityAnalysis

Hedge Fund Presentations

On May 19, 2014, his handwritten note arrived with simple but powerful advice:

“Read the books on the attached list and start investing. You will learn by doing.” — Bill Ackman

Bill Ackman’s Note

The Reading List

Attached to Mr. Ackman’s note was a carefully curated list of investing classics – a roadmap for anyone serious about understanding the market.

• Seth Klarman’s “Margin of Safety” – The value investor’s bible
• Benjamin Graham’s foundational works – “The Intelligent Investor” and “Security Analysis”
• Peter Lynch’s market wisdom – “One Up on Wall Street” and “Beating the Street”
• Joel Greenblatt’s “You Can Be a Stock Market Genius”
• Thornton O’Glove’s “Quality of Earnings”
• Lawrence A. Cunningham’s “The Essays of Warren Buffett: Lessons for Corporate America”
• Robert G. Hagstrom Jr.’s “The Warren Buffett Way”
• Christine Richard’s “Confidence Game”

Looking back a decade later, this simple act of mentorship from a Wall Street titan made a lasting impact on my life. Sometimes the smallest gestures – a note, a reading list, and words of encouragement – can change everything.

Most aren't worth your time.

But these 29? They're different. They're the ones I actually use every day.

Best part? They're all free.

Overview

Before we dive deep into them, here's the full list.

• Google Advanced Search
• SEC Full-Text Search
• PCAOB Auditor Search
• Wayback Machine
• Webpage Archive
• Perplexity AI
• Diffchecker
• IBorrowDesk
• SocialBlade
• Glassdoor
• BBB
• SiteJabber
• TrustPilot
• ReverseWHOIS
• PACER
• Court Listener
• Hacker News
• 10x EBITDA
• X/Twitter
• SEC Comment Letters
• Google Alerts
• Google Trends
• Reddit
• TikTok
• LinkedIn
• Value Investors Club
• ImportYeti
• YouTube Stock Promotion Investigation
• Alta Fox Capital Case Study

Search & Information Tools

Google Advanced Search

This isn't your regular Google search. Use filters like "filetype:pdf site:.gov" with company names. You'll find documents most investors miss completely.

SEC Full-Text Search

Twenty years of SEC filings at your fingertips. I use this to track specific terms or people across multiple companies.

PCAOB Auditor Search

Want to know if you can trust a company's numbers? Check their auditor's track record here. The real gold is in finding who specifically signs off on the audits.

Wayback Machine

Think of it as a time machine for websites. Perfect for catching companies that try to rewrite their history.

Webpage Archive

My go-to for archiving media articles. It's faster than Wayback and catches those sneaky post-publication edits.

Perplexity AI

When Google hits a wall, this AI often finds answers. It's surprisingly good at connecting dots in company research.

Document Analysis

Diffchecker

I use this to spot changes in company documents. Risk factors suddenly changing? This tool shows you exactly what's different.

IBorrowDesk

Essential for understanding short-selling pressure. Shows you borrow rates and availability in real-time.

Social Media Intelligence

SocialBlade

Track a company's social media growth. Great for spotting fake follower purchases or declining engagement.

Glassdoor

Don't just skim the recent reviews. Go back in time and look for patterns. Clustered reviews on a single day? That's a red flag.

BBB

The Better Business Bureau catches problems early. Their public alerts have saved me from several bad investments.

SiteJabber

Consumer reviews for online businesses. I use it to spot emerging problems with e-commerce companies.

TrustPilot

Another solid review site. Great for cross-referencing with other sources to verify complaints.

Legal & Domain Research

ReverseWHOIS

Find all websites registered to a company. It's shocking what you can learn about a business from their forgotten domains.

PACER

Every federal lawsuit is here. Yes, it costs money, but the information can be priceless.

Court Listener

Free legal research. I use it to find precedents that might affect current cases.

Investment Community Insights

Hacker News

Silicon Valley's water cooler. Search any tech company here to see what insiders really think.

10x EBITDA

A goldmine of activist investor presentations. Learn how the pros tear apart companies.

X/Twitter

Filter by people you follow and search by ticker. It's like having hundreds of analysts working for you.

SEC & Market Research

SEC Comment Letters

Search for "CORRESP" or "UPLOAD" in EDGAR. These letters often reveal problems before they're public.

Google Alerts

Set it and forget it. Get emails when news breaks about your companies.

Google Trends

Track search interest over time. Great for spotting dying brands before the market does.

Social Platforms

Reddit

Don't dismiss it. Some of the best industry intel comes from verified employees here.

TikTok

Want to know if young people actually use a product? This is where you'll find out.

LinkedIn

Check employee backgrounds and connections. A CFO with sketchy credentials? That's an immediate red flag.

Additional Resources

Value Investors Club

The quality varies, but some write-ups are incredible. Free access after a delay.

ImportYeti

70 million shipping records. Perfect for supply chain research.

YouTube Stock Promotion Investigation

Search for "The Sketchy Companies Paying YouTubers to Promote Their Stock." Eye-opening look at stock promotion schemes.

Alta Fox Capital Case Study

Look up "The Makings of a Multibagger." It analyzes 104 stocks that went up 10x or more.

Conclusion

These tools are powerful, but they're just tools.

The real value comes from using them systematically and cross-referencing what you find.

Start with 2-3 that match your investment style. Master those first.

I had the privilege of sitting down with the Substack team to discuss my journey, and I’m incredibly grateful to Chris Best, Hamish McKenzie, Jairaj Sethi, and everyone who has helped make The Bear Cave possible.

During our conversation, we explored how I got started in finance, common misconceptions about the industry, and what fuels my passion for exposing corporate misconduct.

Here’s how it went:

How did you get interested in finance?

I’m Edwin Dorsey, author of the newsletter focused on exposing corporate misconduct.

I like to say you don’t choose your passions, your passions choose you.

I don’t know what drew me to like the stock market and researching companies a lot, but I always liked numbers.

I liked learning, I liked kind of investigating, and I kind of just had a knack for it.

What is a misconception about finance?

I think a lot of people view traditional finances like paper pushing.

I sell you the stock, you sell me just Adams going back and forth.

But, you know, with the kind of more activist work, you can have an impact.

You can shape the world in maybe a tiny way.

How did you start investigating corporations?

The way I really got drawn into this was I started investigating a babysitting platform called care.com, and a friend told me they had safety issues.

I decided to test it out for myself.

I applied as Harvey Weinstein with the photo and fake info and all that, and consented to their background check, and to my amazement, I was approved.

I decided I’m going to really look into them.

So, I go to every state attorney general, I file FOIA requests for consumer complaints.

I spent a year or two of my life in college obsessed with this company.

And then the CEO, CFO, general counsel, all resigned.

That was the start of how my passion here was born.

What is the best part of what you do?

I think everybody has, like, these frustrations with large corporations.

They’re pushed around, they’re taken advantage of, they’re screwed over, and they don’t know how to fight back.

I feel like I had this unique ability to be really good at fighting back.

It’s kind of fun that I can see everybody with their frustrations and, almost like a David versus Goliath fight, stand up to them.

I get to show the evidence and hold bad behavior to account, and that’s thrilling.

Did you have a nickname as a child?

When I was a kid in a stroller, I think my nickname was the Mayor because I’d wave at everybody no matter what.

I think that’s true to this day.

And I think there’s just, like, a lot of beauty in ordinary people.

Final Thoughts

My journey from a curious college student to a leading voice in corporate accountability has shown me the power of individual determination.

Here’s the revised version:

Through The Bear Cave, I strive to champion transparency and ethical business practices.

I aim to prove that one person’s dedication can make a real difference in the complex world of corporate finance.

My work is a constant reminder that the most impactful changes often start with asking the right questions—and having the courage to seek the answers.

Follow me on LinkedIn for more content like this!

We explored how I built my newsletter from scratch, the importance of staying independent, and why sometimes the simplest research methods reveal the biggest stories.

For me, it’s always been about one thing – helping investors see what others might miss.

What you’ll learn

• How a college newspaper editor built a 20k+ subscriber investment newsletter exposing corporate fraud
• Why common investigative tools (Google, LinkedIn, employee reviews) reveal more than complex financial analysis
• The patterns of corporate fraud and why they often surface in bear markets
• How qualitative research and independence from Wall Street lead to better investment insights
• Real examples of successful fraud detection: Akazoo (delisted) and ATI Physical Therapy (90% drop)

Video

Watch my interview on the Tidal Financial Group Channel

Or watch it here:

Edwin Dorsey on Corporate Misconduct Exposures, Auditor Analysis, and AI’s Ethical Dilemmas

Transcript

Michael Gayed: My name is Michael Guy. I appreciate those that are watching this episode of Get Think Tank that let’s start off with some quick intros and get into Edwin Dorsey and his research. Mr. Weiskopf, introduce us to the audience please.

Dan Weiskopf: Sure. Dan Weiskopf here, otherwise known as the ETF professor on X. Also lead ETF strategist for the ETF Think Tank and also portfolio manager or co portfolio manager of the largest blockchain etf. That’s me.

Michael Gayed: And then of course the guest for the hour, Mr. Edwin Dorsey, who I had on X Spaces. So weird to say X Spaces well over a year ago. I was very impressed with the conversation back then. So I’m excited to hear what’s going on in your role. But introduce yourself, Edwin, to the audience.

Edwin Dorsey: Well, Michael, Dan, first, thanks so much for having me. I’m Edwin Dorsey. I write the Bear Cape newsletter, which is a newsletter focused on exposing corporate misconduct. I generally criticize one to $10 billion public companies, US based tech or consumer that I feel is our misleading investors or harming customers. I also talk a lot about the active short space, follow questionable resignations and just follow the shorts of our industry as a whole.

Michael Gayed: So I’ll start off on my end. Corporate misconduct is hard to quantify, or maybe it isn’t. But how do you even go about identifying in a universe of thousands of stocks and thousands of companies which ones seem to have some corporate misconduct?

Edwin Dorsey: So I mean, being in big news that are out there in this space has its perks where you get tons and tons of inbound tips of people telling you stories and what they want to look you to look into. To start, you could just do a basic Internet search, look at the Better Business Bureau, look at Site Jobber, look at Tricepilot, see the complaints there, See the company’s positioning relative to peers. If there are more or less complaints, they seem more severe. Something that I can do that’s relatively unique with the Bear Cave that I think gives me an edge in trying to see how egregious problems are, is I’m really good at navigating the Freedom of Information app to go to government regulators to get copies of consumer complaints people file against businesses. So I won’t just read what’s online because that can be frivolous. It could be a competitor sabotaging them. I go direct to regulators, file out a FOIA request, and within weeks or months we’ll get hundreds of pages of consumer complaints people have submitted against companies to regulators. That’s one thing I use a lot in my newsletter to really figure out how egregious problems are. Sometimes you’ll get lucky. And also there can be government databases. So I’ve written a little bit on insurance companies in the past. There’s the national association of Insurance Commissioners. They have a complaint index where you can see the number of complaints against a company relative to the peer group. So this is this company getting more or less complaints than you’d expect for a company of that size. Sometimes that’s helpful, but usually to the way you said earlier, it’s a very qualitative process where I’m just reading lots of complaints, sometimes reading the company’s responses and trying to use the gut instinct to see if it’s really egregious or not.

Dan Weiskopf: Sorry about that. And talk about corporate governance. Do you have a position in a stock, long or short? But really mostly on the short side, I guess from your vantage point before you issue the report.

Edwin Dorsey: So, Dan, that’s a great question. Another thing that makes me unique, I do not bet against any of the companies I write about in the bear Cave. I only make money from reader subscriptions to the newsletter the Bear Cape. I don’t short, I don’t buy puts. And some people view it as a criticism you aren’t eating your own cooking, so to speak. Other people, what I would argue is it gives a degree of independence. One frustration I think many people have with activist short sellers is they might exaggerate, they might be bombastic. I remember one person called GE the greatest fraud since Enron and is going to zero. And all this because you’re trying to get that big single day move so you can make money on a short position or puts. Because I don’t have that. I really like to be understated, evidence based and just let the research speak for itself. So I don’t short or bypass. I just share the evidence.

Dan Weiskopf: And Mike, let me, let me just follow up with one more question. You use the term activist short.

Edwin Dorsey: Yeah.

Dan Weiskopf: And that’s that there’s a distinction between activist short and just somebody who’s shorting.

Edwin Dorsey: Yeah, absolutely, Dan. So, you know, traditionally a lot of short selling is. There’s a big hedge fund, analysts do some number crunching, think a company is overvalued and put on a short position and sit on their hands and do nothing. And that’s fine. Nothing wrong with that. We’ve seen a huge explosion over the last few years of activist short sellers who do deep research on one company and they’ll compile a 50 or 100 page report, they’ll hire private investigators, they’ll learn everything about the company. They’ll take a huge short position, they’ll get a lot of maybe short term puts and try to release a big report to get the market to see problems in a company, to get a big single day stock move. We, you know, early ones of that would be Citron Research and Muddy Waters Research. Now we have dozens of these activist short sellers who either take a position themselves or use a balance sheet partner, usually overseas, to take a position and try to move stock prices. And it’s something that, you know, you know, it’s kind of evolved over time. Where was first a few people, now it’s dozens of people. Now we’re seeing activist short sellers in effect become their own media arms where, you know, Muddy Waters has a TV show where they talk about Shorts, this new hedge fund called Hunderbrooke, which Shorts has a nonprofit newspaper that they use to disseminate ideas. It’s really been this explosion of this weird industry. Now I don’t really consider myself part of it because I’m not shorting myself, but I write about a lot of these players in my newsletter and kind of summarize what’s going on in that world. So it’s something I’m familiar with.

Michael Gayed: Let’s talk about how you create a template for analyzing companies. Right. So if you’re going to be trying to go after from an activist short selling standpoint, are you applying the same sort of checklists across companies that you’re coming across or is there some art to it?

Edwin Dorsey: I definitely think there’s a little bit of both. So one thing about me is I’m focused very much on the core qualitative aspects of a company and not the quantitative. So I’m not doing modeling. I’m not really even focused on numbers that much. It’s very qualitative. So something I do for all companies is I want to look at the people involved. One of the first things I’ll do is I’ll look at the board and just see what other boards the board members have served on. Because in a healthy company you’d hope that your board members have been on a lot of other successful, vibrant companies. If I see a board where none of the board members have served on other public company, that’s a red flag. If I see a board where a lot of the board members have a history of associating with companies that fell 90% plus, that’s a red flag because I focus a lot on a company’s relationship with their customers. I’ll read, you know, all the consumer review sites. I’ll do foia. I love reading Glassdoor and reading all the Glassdoor reviews in chronological order for a company. I always look at not just who the auditor is, but a lot of people don’t know this. You can actually figure out who this specific audit partner is responsible for auditing a company. That PCOB has this database that’s free and it’s easy to use. You just go, you type in any ticker and you can see the specific auditor responsible for auditing a company and their track record. So that’s another way I can just constantly do this for companies. Usually it turns nothing up, but sometimes you find, hey, there’s this person who has a history of auditing companies with accounting issues. Now he’s auditing this new company. I kind of want to bet against them. So I do all that. And then of course, there’s a lot that varies, company to company, depending on the industry they’re in.

Dan Weiskopf: Don’t, don’t a lot of partners who are auditors specialize in certain industries though. So it would, in certain industries have more complications than other industries. So what you’re, what you’re describing is, wouldn’t be uncommon. Right?

Edwin Dorsey: So, Dan, it depends. And where it’s most extreme with these audit partners issues tends to be in US listed Chinese companies. There’s a woman like, you know, my kind of understanding in a way is I think these auditors just like have fall people that they give their most complicated, questionable audits to that they use as the person they’ll blame whenever one of them goes wrong is that there’s like one woman, I think, who is responsible for Gia for Luck and Coffee, who the three companies she audited prior to each had like huge accounting issues and fell 90%. And it’s like, I’m just sensing something here where, you know, I can’t prove it, but I, I have a feeling that maybe you’re not doing great audits and you’re the person the questionable audits go to. So it’s not a catch all. It’s not like, oh, this person is on it and therefore everything’s wrong. It’s like a piece of a broader mosaic. And to your point about industry expertise, you’re totally right. Most auditors, people specialize in industries, except sometimes I’ll find somebody who like, is just scattershot. Or they typically audit very small companies in one industry and then they’re responsible for a $5 billion company in a different industry. And that makes no sense. And alone isn’t enough for a short thesis, but combined with other factors, it’s a red flag.

Dan Weiskopf: So I’ll follow up with that. I know there’s some discussions around BlackRock having corporate governance issues in the closed end fund area. Right. I’m not suggesting that you would ever even, you know, short a closed end fund, but maybe you would. I mean, is that something that you would consider?

Edwin Dorsey: I mean, I. I’m happy to look at anything. It’s a little bit outside what I’d normally do. Like I looked at BDCs a little because then you can look through the loan book. So I. I’d be curious. Probably not what I typically do. I. I am curious about governance. When you say BlackRock, for some reason my mind goes to ESG and ESG is one of my favorite topics to look at in companies to. You know, I don’t have a super strong opinion like you need to be pro ESG or anti esg. I. For me it just like is it genuine? And a lot of times my favorite shorts will have these big ESG slides and promoted but then actually be acting very unethically and it’s this contrast that to me becomes a really big issue.

Dan Weiskopf: Michael, you’ve got a question.

Edwin Dorsey: You want me to keep going, my friend, I got.

Michael Gayed: I got plenty of questions. Let’s talk.

Dan Weiskopf: Let’s.

Michael Gayed: Okay, so I’m looking at the. At your substack, the bearcade subs.com I encourage people to take a look again, you’ve killed. Okay, so you’ve got a number of stocks you talk about that might have problems. Has there ever been a stock, I assume there is, where you start saying, you know what? Those problems are getting rectified. Maybe I should be a bit lighter on. On my analysis or things are changing.

Dan Weiskopf: The camera is in.

Michael Gayed: So like, like ring going off as we were chatting.

Edwin Dorsey: Yeah, the. The. Probably one of my biggest mistakes with the barricade Biggest regrets is actually the first company I wrote on, Celsius holdings where they’re the makers of the energy drink Celsius. And they had a lot of issues. There was a lot of shady actors involved early in their state. Early in the company’s inception. They had some accounting oddities. They used a very questionable auditor. They had a weird revenue recognition policy. Just all the. All the kind of red flags around the core business was there. And I kind of missed the forest for the trees because the one thing that matters is the sales are real. And it was a very popular product that was getting more and more popular. So that is one where I think I really screwed up and you know, let all the red flags let me ignore the core point that the core business was doing really well. I don’t think I’ve had many screw ups like that but that one was up I think like three or four x since I wrote on them, you know, three and a half years ago. So that’s one I really regret sometimes just businesses outperform despite the red flags. I, I’m trying to think if there was one where I really think they rectified the issues and I’d want to go long. But you usually, it’s like, it’s very like moral and character problems and those aren’t resolved quickly that that might take decades but not six months or a year.

Dan Weiskopf: So along those lines you don’t have to be specific. You initiate a short report on something. Do you advise when to cover too?

Edwin Dorsey: No. So I probably wouldn’t describe the Bear Caves articles as short reports. I, I usually call them deep dive investigations and it’s somewhat odd in which I’m clearly saying I think this company has problems and a lot of short sellers. Read the articles. I never explicitly just say to short, I never give price targets. And again I’m very much not talking about numbers. What I like to say is if you’re a short analyst at a hedge fund, you would use mine for early stage idea generation. So it’s off the beaten path, it’s outside Wall Street Group think I’m not going to be talking about Tesla and Carvana and whatever. I’m going to be talking about problems at companies that nobody else is talking about. And in aggregate, I think if you look at the companies every now and they tend to severely underperform in the future, but it’s not like a trading service giving price targets and cover recommendations and the like.

Dan Weiskopf: So let’s dig into one of your favorite names like, well, Hershey. You were talking about that before. I’d love to hear more about that. Listen, I love chocolate. How could Hershey be a short?

Michael Gayed: I am not a short. I am fasting. What are you doing talking about Hershey?

Edwin Dorsey: It’s not about you. Oh, I, you’re right. I love talking about Hershey’s views and it’s the one thing I get criticized most for in the veracy of Hershey’s roughly $40 billion business. 30 times plus earnings seen as a super save dividend payer. Great for grandma’s retirement portfolio. People love it. And Hershey’s, unlike many of these Big CPG giants isn’t actually that diversified. The vast majority of their sales come from the U.S. the vast majority is from chocolate, and the vast majority is from really two brands, Hershey’s, and they also own Reese’s peanut butter Cups. And, you know, nothing was wrong with that business historically. However, there’s been one big change that I think investors have missed, which is that this really popular youtuber who I follow named Mr. Beast two years ago launched a chocolate brand called Feastables. And most people when as soon as I start saying, oh, there’s a creator, launched a new brand, they roll their eyes, they think, how, how impactful could it be? Mr. Beast isn’t like a normal creator. He has over 300 million YouTube followers. He’s by far the most followed creator in like the 10 to 25 demographic. His videos, which come out twice a month, typically are doing hundreds of millions of views, like a Super bowl, you know, every two weeks. And his chocolate brain, Feastables, as far as I could tell, has gone from about zero in sales to about 500 million in sales in the last two years. And it does that almost exclusive, largely through selling through about 40,000 retail locations in the U.S. they’re in every Walmart, every Target, and they’re becoming so big and popular. I think Feastables is ultimately going to take some share from Hershey’s, and we haven’t seen it extremely yet. But, but the core of my thesis on Hershey’s is I think Feastables is going to get so big that it’s going to take share and Hershey’s is going to start seeing volume declines and it’s going to become a big issue for them in the future. And I’m happy to talk more about.

Dan Weiskopf: Well, wait, why wouldn’t Hershey’s just buy them?

Edwin Dorsey: So that’s a great question. A few reasons. First, Mr. Beast and his managers have signaled they wouldn’t even take a multi billion dollar acquisition offer at this stage. Second, if you look at the Feastables marketing, I think it’s more likely a Hershey Sue’s Feastables than buys them. Because every day in the Mr. Beast video, they portray Hershey’s as the enemy. Hershey’s is for boomers. Hershey’s is for losers. Hershey’s is the worst tasting chocolate on the planet. We’re better than Hershey’s, but that means nothing because we could be second, worse. Hershey’s, that is just constant. They literally had one room in their video that was viewed 100 million times that just said Hershey’s sucks in big letters. They have contestants on some of the shows take the Hershey’s bar and throw it into a trash can. They’re, I think they’re asking to be sued rather than acquired. And the guy who founded it, Mr. Beast, again, very popular in the youth demographic. He had Crohn’s disease. He made this chocolate brand largely because he wanted a healthy, better for you thing. And like just Hershey’s is too processed. Not healthy is something people with Crohn’s candy. So it’d be antithetical to the mission to sell, antithetical to the marketing. And they’ve kind of explicitly said they don’t need the money, they don’t want the money, they’re not going to sell. So I kind of take it at face value that Hershey’s won’t buy them. But again, it’s this Wall street mentality. Everyone says, oh, Hershey’s just going to buy them. If they get bigger, I think they wouldn’t really sell and that, you know, they can’t solve the problem that way.

Michael Gayed: All right, so on, on the substack you have the. I found a post from last year, the Bear Caves ultimate guide for Bears. And you’ve got a huge list, a red flag checklist. I got to ask you on one of them. Well, I think it’s. Yeah, it point number 23 as far as a checklist for bears. Any company based in Fort Lauderdale. Okay, now I want to, I want. First of all, that sounds hilarious. All right. But. But what?

Edwin Dorsey: Okay, so in short sellers there’s largely seen as some areas that tend to have more promote and fraudulent companies than others. Florida tends to be one, Utah tends to be one. Some people say Nevada. One issue with Florida as a state, my understanding is Florida has very big homestead laws, meaning that if you are convicted of fraud, if you need to pay a big penalty, you will never lose your home. So one thing a lot of sketchy people do either while they’re making money or after making money, is they move to Florida. They buy a 50 million dollar home, all cash, and then they can never lose it. So Florida for that reason attracts a lot of people who make money in unscrupulous ways because you just buy a huge home and no matter what, the government can’t take it from you. So that’s why Florida. And then you see this in pockets, I think like Miami and Fort Lauderdale. And I, I think I just noticed that there was a. Anytime I look at a Company from Fort Lauderdale. I could never really find a successful one. You see a ton of stock promotions there. I don’t know exactly why Fort Lauderdale and not Miami. Maybe it’s little bit like cheaper area. I’ve been to Fort Lauderdale before and I kind of know the culture there. And I think Miami is not Miami for Lauderdale isn’t always known to have the most ethical people. So, you know, it’s, it’s a little bit homestead laws, it’s a little bit just. I’ve noticed a lot of things there and I’ve never really noticed a successful one. So Fort Lauderdale is one, you know, people like to say Utah has a lot of these MLM type scams because there’s, you know, a large Mormon population there. So then there’s a lot of selling culture there and then you got a lot of promotion, you know. So I think sometimes these blanket rules just work fine. Avoid Port Lauderdale.

Dan Weiskopf: Well, it used to be also there were a lot of bucket shops in Florida too.

Edwin Dorsey: Yes, stock promotion. Thank you.

Dan Weiskopf: Yeah, yeah, no, I get it. But did you say that you don’t.

Edwin Dorsey: Really hone in on balance sheets or.

Dan Weiskopf: That’s just not part of your trigger?

Edwin Dorsey: So I look at it, I definitely look at it because I wouldn’t be doing anything useful if I just say here’s a business that has all these issues but it’s trading at 2 times earnings. It’s like clearly the market’s pricing that in or if like it’s trading below net cash, then I’m not doing anything useful. So I use it. I look for businesses. I prefer businesses with a lot of debt. I prefer businesses I feel like can go to zero. I also have this view that Wall street is just good at getting like the number stuff, right? I don’t. I could write, you know, a thousand word report on the valuation, but everybody already understands that where Wall street struggles is qualitative. And that’s where I think my edge is. And I like to even say there’s a lot of things businesses can do to improve the financials in the short term, but actually degrades the value in the long term. And an example of that would be is if you raise prices and make it very difficult to cancel, that helps your financials. Everybody’s going to be like, retention’s going up, the financials are going, and Wall street will model it to infinity and beyond. But if you see that it’s actually not sustainable and it’s going to cause a lot of churn and customers are pissed, the value from that Decision is actually going down while the financials are going up. And that’s where I can come in and say, hey, the financials aren’t connected to riot reality. Let’s do it. So I obviously look at the balance sheet and income statement, same of cash flows and look at the basics there. It just really not, it might just get a paragraph in the newsletter rather than what you see a traditional financial analysis, which is a large, you know, portion covering it.

Michael Gayed: All right, I, I got another one.

Edwin Dorsey: Yes, let’s do it.

Michael Gayed: So this is like, this is like perfect for asking questions. Point number 32, CEOs who wear wigs. Let’s, let’s get into that because I, I, I, first of all, you have to, it has to be a bad wig, so you can tell that they’re wearing a wig. Is that just a joke or is there some legitimacy there?

Edwin Dorsey: So, so when I made this list, I kind of crowdsourced it from Twitter and I said to all the short sellers I respect, what do you think are the red flags? And the person who gave that one is Mark Cohes, a prolific short seller. A little eccentric, I think. He’s very smart on the short side. And he has this rule that CEOs who wear wigs. There’s, I think his view is there’s a dishonesty behind it where if you’re wanting to cover up something about your appearance, then you might be willing to cover up, you know, other things in your financials and the like. I don’t know how accurate it is. It’s just, it’s just one that I think has some humor value and maybe some truth to it. You know, I’m not saying short all CEOs of the week wigs, but, you know, I think he said Parker Petit had a wig and that failed. And he could probably give a few examples. You know, I, I do like to, though, look at a CEO’s appearance and how they present themselves and their interviews. And what I often try to figure out just by listening to them is, are they a missionary, where they believe in the mission, that this is like their baby and they’re going to die for the business, or are they the mercenary? This is a job. They’re getting paid a salary. They view it as a, you know, this is a way for them to make money. An example of a missionary CEO is Elon Musk. It’s his baby. He sleeps in the factory. You’re not going to do any. You’re going to kill him before you kill his business. You never, ever, ever no matter what, I never want to give out against the missionary CEO. If this is, this is your bait, I want to bet against the mercy. I want to use someone who views it not as a baby but like, like a babysitter. Like, you know, they’re just watching the business, they want to earn money, whatever, you know, but I never want to bet, get it? Bet against the missionary CEO, someone who has their heart and soul. It’s like, you know, they’re a mom to the business rather than a babysitter.

Dan Weiskopf: So are we all going to like pull our hairs right now just to make sure that we’re not? Go ahead.

Michael Gayed: The Jensen Huang from Nvidia, does he have a wiggle? I don’t know. Does he?

Edwin Dorsey: I don’t know.

Michael Gayed: You know, I’m sure even with AI, you can, you can probably get real here. No, I, I, the appearance point is interesting. Another one which I think is also interesting. But I, I, I find like every CEO does this. You said it’s CEOs that promote their stock. I mean everyone, I, I think the person I’ve always viewed CEO is more than anything else as, as not just the face of the company, but the salesman to investors.

Edwin Dorsey: Right.

Michael Gayed: So, so don’t all CEOs promote stock? I mean, is a certain style of promoting a certain tone or communication approach?

Edwin Dorsey: So I think it depends on how egregious it is. Yeah, obviously it’s fine to be optimistic acting your own company. I think first if you’re paying stock promoters, that’s a really big red flag. And you know, I, you see this is more in the smaller market cap ranges. But this is easy to check for if they’re paying for analyst coverage, if they’re doing anything where they’re expending company cash to be promotional. Because that’s not, that’s just promote the sock, not to promote the company. And then I also like to look at just promotional claims. So you know, one example of a company I wrote on was this company, Ageagle Aerial Systems. They claimed to be making next generation delivery drones. That, and they kept hinting at a partnership with Amazon. They never explicitly say it, but they keep hinting and dropping hints. And like, you know, I think the people connected to the company would be on message boards saying oh Amazon, partner in minute. That’s what I really hate because that’s just, it’s not doing anything for you. Not trying to build a product or service or make something useful. You’re just trying to generate retail investors enthusiasm on nothing. So it’s like this puffery where you’re making claims that aren’t really true, you know, it’s just trying to get retail investors involved, using company cash to promote. I don’t like that. If you’re a big cheerleader for your business, that’s fine. But there’s, you know, maybe a tough to define line where you go from, you’re not excited about the business, you’re excited about the stuff.

Dan Weiskopf: And Michael, I know you were asking about the CEO, and you’re right. And you know, Edwin, I guess the CEO is expected to wear pants too. Like, the CEO of AMC didn’t do. That was like, crazy.

Edwin Dorsey: Yes, that’s very.

Michael Gayed: He knew his audience. And fairness, right? It’s like. And I. I don’t mean that, like, disrespectful. You know, you’re trying to go meme friendly, right? It’s like trying to find something goes viral. I’m sure that was purposeful. Come on, are you being serious? Yeah, of course. God, at that time when everything was memes and rocket ships and, and the silliness, it’s like, yeah, fine, you’re a CEO and you know that your audience is buying up your stock. You want to cater to that, put something out there that is like, so bizarre and silly that people repost and say, I got to buy this guy’s stock. I love it.

Edwin Dorsey: The crazy thing is, though, and I criticize AMC in my newsletter, a AMC still has a $1.5 billion market cap, and I think it’s going to zero. Like, it’s not maybe as egregious to check. It just. It’s just, you know, even if you think theaters have a role, the theaters that are going to survive are the ones that are like a high quality novel experience. You go on to. You don’t know. The days of AMC are just over. No one wants to be in a 200 person theater with like, you know, not going to work.

Dan Weiskopf: Which brings. Brings me to the question that once you. Once you write your piece, do you revisit it? See, you know, every. Every other month, you update people. What. What happens once you initiate the position.

Edwin Dorsey: So typically, what I like to say is, I’m really good at the early stage of research. I’m good at the first few innings of research. I’m good. I’m less good. I don’t follow them too closely after I write on them. What typically happens is most of the times I’m one and done. And again, it’s early stage research for people who are looking offer off the beaten path. Ideas. And I’d rather say here’s 15 interesting ideas than three that I’ll follow closely. And what does happen is every year or two I’ll pick up a few ideas. I do want to follow closely. So I follow Roblox closely over time. The game that has a lot of children create content and I think has a lot of child safety issues. I followed Planet Fitness closely. Hershey’s is very, very like I’m following that extremely closely. It just, I think from a reader perspective, people would rather hear fresh ideas than me rehash the same old ideas over and over again. So I do follow them sometimes, but it’s, it’s usually just for the most egregious companies and not all of them.

Michael Gayed: Let’s do a little bit of a preview of.

Edwin Dorsey: Yeah.

Michael Gayed: What you’re writing on now. New things. Let’s give, you know, everybody should sign up to the Bear Cave on subsac. But you know, let’s, let’s do a little sort of hinting at what’s coming.

Edwin Dorsey: So I never explicitly say I’m going to write on this company at this future date, obviously, however, you know, AI is being talked about a lot. So. And the one of the most successful recent articles in the Barricade was I criticized Chegg in January and it was already down a lot on fears that I would destroy their business. But I just became convinced looking at it that they just have no like students aren’t going to continue to use Chegg when there’s a free option. You can just ask ChatGPT for homework out. And that’s been totally true. The stock’s down 75% this year to date or so. And I personally believe it’s a zero. There’s no way out of it that this is just done. So everybody’s going to be canceling this summer. None are coming back. So that’s a past name I wrote on that I think continues to be a great short but then derivative of that. I look for a lot of other things that AI is going to hurt. Coursera is another business people talk about. I haven’t written on them yet and I don’t know if I can get to that level of confidence, especially with the stock down so much. But just the way people learn. I think online paid education is tough because there’s so much great free resources online. Just these education stocks like 2U was trying to do university degrees online. That’s like just online education, I think is more. There’s too much available for free. That’s easy especially with ChatGPT, I think this could get hurt. Shutterstock is a business I’ve looked at a lot from an AI perspective. You know, the bear case is you’re going to use AI generated images generated very cheaply instead of paying Shutterstock for licenses. A bull case is that Shutterstock actually makes a lot of money going to these AI companies who want to train their AIs on Shutterstock’s database. So they license their database to train AIs. You know, the other thing with Shutterstock I’m not sure of is AI generated images. Is that going to create a new market or is it going to hurt the existing market? The problem or the opportunity for investors, I think often comes from the fact that businesses that are being hurt by AI will never just admit it to investors. None of them will say, oh, AI is going to destroy our business. What they’ll say is, AI is going to change things, but we’re going to benefit from this AI tool we’re rolling out. And then you need to figure out how legitimate is that or not. And I think even if they’re optimistic, like Jake had their AI bot homework help thing, it just, it just didn’t work in the face of competition. So, you know, I spend a lot of time looking at AI. Duolingo is another one that people talk about. The demand for learning new languages might be reduced if you speak into a phone and it’s auto translated. The ability to learn through AI could be better than through these apps. You know, I like the Duolingo CEO. I think he’s talented though. So I’m not sure I want to bet against them. You know, there’s a lot of tech and automation companies that could be hurt. There’s call centers, there’s. I’ve seen a few public companies like that that could be heard. I think we’re going to see a lot by AI and I think it’s going to take some time to play out where there might be short term losers that are long term winners, short term winners that are long term losers, businesses that are prices losers that are just going to lose more. We’re going to see a lot around AI that I’m excited to explore.

Dan Weiskopf: So, you know, I’ve often heard shorts, you know, guys who are on the short side frequently complain that the market’s very difficult for on the short side. Right. But wait, I mean, breadth’s been very narrow. So I would think that these days, you know, the conditions are pretty favorable on the short side. What are your views on the macro level? On what’s happening overall in markets right now?

Edwin Dorsey: Well, I think they’re having difficulty on the short side. They should read the bear cape and that’s it. But you know, I, I think we were very lucky two years ago where shorts had it easy because there was a lot of, there was a lot of SPACs, there was a lot of retail investor participation and I think when you have a lot of easy money flowing around that makes good people do bad things, bad people do worse things. You had a ton of unethical conduct, tons of low hanging fruit and it was such an easy environment two years ago. Now with that gone, it can be a little difficult. We’re also in times of huge change. So I don’t have a ton of sympathy for someone who says it’s impossible to find shorts. The market is rigged. I mean, we got the most change ever. There’s so many companies, not just AI, we got GLP1 drugs, we’ve got tons of technology change. I mean there should, there’s a lot of companies that are just declining 80% in a year and that’s exactly what you want for the short world. I just think the type of things that worked in the past for some of these bigger institutional shorts maybe don’t work today. This modeling focused on financials a ton that can be just all, all that can be true, but overshadowed by a really strong core business or even if something has clean financials, it can be destroyed by just, you know, competition and technology. So, you know, I’m really, I do wish there was more SPACs and retail investor participations that would make my job easier. But I’m happy that there’s so much change and so, so much going on. I could probably do every single Bear Cave edition for the rest of the year just on companies. I’ll be hurt by AI if I really want it. I do think there’s, there’s tons of potential shorts. You just get the way you find them is going to be a little new and you got to be fresh.

Michael Gayed: All right? So I gotta ask you one that’s a little near and dear to me. Planet Fitness, which the one near me had for two weeks, I couldn’t find gym pins for the machines. People were stealing the gym pins and it was actually frustrating to the point where I had to go on Amazon.com to get my own gym pin. People were putting literally pens like this right as the pin for the weight machines, which was bizarre in ourself. Very cheap price, right gets the job done. But what is wrong with Planet Fitness.

Edwin Dorsey: Great question. So I wrote on Planet Fitness two times, largely in January of last year, is when I started criticizing them publicly. The biggest problem with Planet Fitness is it’s very easy to sign up and very tough to cancel. And gyms are notorious for being a little tough to cancel. This is nothing new. The issue with Planet Fitness is I think they go overboard. So the Planet Fitness policy is you can’t cancel over the phone. You can’t cancel by email. You can’t cancel online, you can’t cancel an app. You need to go in person to the gym you signed up at. That’s their policy. And that can be even problematic if you’re a college student and you sign up and you move away for the summer or you move. It’s. It’s a kind of a mess just on its own, and I think it’s kind of antiquated. But when I start researching it, when I start going to state regulators and filing FOIA requests for consumer complaints, what I see often is consumers say, I actually did follow their policy. I go to the plan of Fitness to cancel, and they just say, I can’t cancel today. It’s a payment processing day. Come back another day. They say they did cancel it, but then they continue to get billed the $10 a month. What Planet Fitness policy is if you move out of state is that you’re supposed to send a letter to the location you’re trying to cancel. But what they do is they send a letter and then they say, we never received the letter. We never received the letter. Send another letter. There’s one woman who said she sent three letters and she called and she said that the manager said they had so many cancellation letters in a box that they couldn’t find hers and she needed to send another letter. So she sent a certified letter, and they still didn’t cancel it. So she’s reaching out to her state attorney general to try to get them to stop processing these cancellations. So you, in my view is Planet Fitness has a huge number of people who are just, you know, either don’t know they’re being billed or trying to cancel that can’t cancel. And here’s a little thing which is with businesses that are really tough to cancel and play these games, they tend to get a lot of credit card disputes. So Planet Fitness, I believe, has around 2 million members. And Michael and Dan, I got a trivia question for you, which is, of the 2 million Planet Fitness members, roughly how many credit card disputes do you think Planet Fitness got in the last year?

Dan Weiskopf: 75%.

Edwin Dorsey: 75%. Michael, you want to guess?

Michael Gayed: I mean, I don’t know. 30, 40. I don’t know.

Edwin Dorsey: So the real answer is zero. Because Planet Fitness doesn’t let you sign up with a credit card. They make you do a debit card or direct account ach. And this is something I commonly see in scamming businesses where they don’t let you do the credit card or deter you from it. They try to do derivative card and direct account ach. So you don’t have a dispute mechanism. So that’s another way in which they kind of circumvent and play games. So I wrote in my article, is, is Planet Fitness a gym company or is it an illegal billing operation with gyms on the side? And that’s a high level of it.

Dan Weiskopf: I love it. By the way, during COVID I, you know, prior to Covid, I was using Equinox.

Edwin Dorsey: Yeah.

Dan Weiskopf: And I tried to cancel because I wasn’t going to be going. Right?

Edwin Dorsey: Yeah.

Dan Weiskopf: And I did it on the phone and they took my number and they said it was canceled. And sure enough, exactly what you said was true. They just kept on billing me and I was using the American Express. And when I went back to American Express to try and, you know, reverse it. Well, we’ll try. We’ll, you know, couldn’t do it, couldn’t do it. And it was a lot of money, actually.

Edwin Dorsey: WIt’s annoying. And that, you know, another thing is this is a top priority for the Biden administration and regulators is these tough to cancel subscriptions where a lot of lawmakers say we want to make it as easy to cancel subscription as it is to sign up. And I just think, you know, whether it’s through regulators or public pressure, that’s ultimately how it’s going to be. And when that occurs, Planet Fitness is going to get in a lot of trouble. And then there’s a lot of stuff around the edges where I think Planet Fitness is oversaturated in a lot of areas. There’s one planet Fitness a 10 minute walk from another one. These are franchise based, you know, not thing units. So not only it’s like the corporation basically turns a blind eye to the franchisees continuing to illegally bill people. But oftentimes because it’s $10 a month, many of the members are like, you know, under educated, don’t know how to complain to regular, like there’s a little bit helpless. If you go to like local credit unions a lot, a lot of times the employees will say the number one reason people cancel Their planet, their credit, their checking accounts is to stop Planet Fitness from billing them and they open up an identical account that Planet Fitness isn’t able to like illegally bill that, you know, Planet Fitness, when you sign up, they put you generally in a contract where you’re paying $10 a month, but if you want to cancel, you need to pay a cancellation fee. So some people say I’m too poor to continue paying, but I’m too poor to pay the hundred dollars to get out. It’s a real mess that is really harming a lot of people. And I think if they acted ethically as a business, their franchise footprint would be a lot smaller and the business would be a lot less profitable.

Dan Weiskopf: Are there certain industries that are more prone to being on the short side in your thinking?

Edwin Dorsey: So that’s a great question. You know, the one that comes to mind is like anything mining related. Mark Twain said, you know, a mine is just a hole in the ground with a liar on top. So I don’t look at that as much as I focus a lot where I can use foia, that’s like kind of my edge. So I naturally gravitate towards consumers. The places where there might be a lot of consumer complaints. What I have found is it’s not necessarily industries, it’s demographics. Businesses catering to low income people, to undereducated people, to Spanish speakers. Those are ones where I find there’s going to be a lot of complaints. So sometimes you might want to like reverse engineer it. And it’s like I wrote about Globe Life recently, a life insurance company. They target a lot of low income, demographics, Spanish speaking populations and the like. And it’s like, okay, that’s the type of business I feel might be acting very unethically. Let me go in, see how egregious the problems are and how I think it’ll play out in the future.

Dan Weiskopf: I did my master’s thesis on pawn shops.

Edwin Dorsey: Yeah.

Dan Weiskopf: And you know, there are some arguments that they’re charging too much. But it’s highly regulated. Right. And a lot of their clients, well, can’t afford to have checking accounts. Right. Because there’s costs there too. So anyway, I, I’m not looking for you to short any pawn shops.

Edwin Dorsey: Yeah. So. So pawn shops, you know, are an interesting one. I, what I like to do is try to find these questionable or shady industries and try to see who is the worst actor. Right. So there’s a lot of payday lenders and but if you look at most payday lenders, they tend to trade at 2 times earnings. They’re very cheap. The market values them like payday lenders. There was one, however, called OPPI that went public in a multibillion dollar SPAC merger. And they were not clear that they were a payday lender. Where it’s like, we’re esg. We help people build credit. We’re a financial resources and tooling company. And you read the SPAC deck and they don’t mention payday lending. Once you think this is the most generous, nice company and you open up SEC filings and it’s like, yeah, we’re a high interest lender. The average interest rate on our loans, 124%. And then when you see this disparities where it’s like, you know, I think there’s a Warren Buffett quote you can hound like a rock concert or you can have a ballet. Just don’t advertise a ballet as a rock concert. So it’s like, I won’t criticize a payday lender or pawn shop company that says, look, we’re payday and you know, lender pawn shop companies. These are the regulatory scrutinies we face. This is our evaluations, how we generate value. It’s where you try to play games and convince investors you’re not one. Where you are one.

Michael Gayed: Where.

Edwin Dorsey: I think there’s an opportunity for me to come in.

Michael Gayed: As we wrap up, Edwin, maybe kind of final thoughts as far as if somebody wants to identify those early opportunities. Outside of looking at your stuff and the checklist get sort of how, how would you recommend somebody go about your way of thinking about things and doing that research and then give a quick pitch on the subsect.

Edwin Dorsey: So, Michael, I love that question. Always look at the people, look at the CEO, look at the cfo, look at their track record, look at the board members and all the other boards they’ve served on. If you have a history of success, I think you’ll continue to have a history of success. If you have a history of failure, I think you’re going to continue to have a history of failure. And you don’t need to be fancy. I think there’s nothing wrong with going on YouTube and seeing what people say about the business. Nothing wrong about going on Better Business Bureau or site job or trustpilot and seeing what consumer says. Just doing just research. Sometimes I like to say. What I like to do is I go to Seeking Alpha. I find the article with the most comments and I skip the article and just read the comments because there’s always going to be one smart commenter. There’s a saying on the Internet. If you want the right answer, put out the wrong answer and someone will correct you. So read all the comments, these articles, see someone saying something smart. All that is how individuals would do it. And if people want to follow me, you can Google Edwin Dorsey and got a Twitter. Just look up the Bear Cave newsletter. I’m grateful for everybody who reads the newsletter. I think it’s really useful. There’s a ton of content on the free side. In fact, the vast majority of readers are free. And then, you know, there’s a thousand or so who choose to pay for the publication. But I’m grateful for anyone who checks out the Bear Cave and I think.

Michael Gayed: It’s really special thanks to my my friend who does not wear wig, Mr. Dan Weiskopf, and of course Edwin Dorsey. Please make sure you check out the Bear Cave on substack and hopefully we’ll see you next time for another edition of Get Think Tanks product of Title Financial Group. If you ever want to watch an etf, you know where to go. It’s Title Financial Group. Thank you, Edwin. Appreciate it.

Edwin Dorsey: Thank you guys. Really enjoyed this. Michael and Dan, good night.

What started as a discussion about corporate misconduct evolved into an eye-opening exploration of how easy money and weak oversight are creating perfect conditions for deception. From $1 billion drone companies spending just $200,000 on R&D to auto insurers trapping customers in predatory contracts, the scale of corporate fraud today is staggering. After years of investigating companies through The Bear Cave newsletter, I’ve learned that the most dangerous frauds aren’t always the most obvious ones – they’re the ones Wall Street celebrates while customers suffer in silence.

What You’ll Learn:

• We’re living in a “golden age of fraud” driven by easy money and weak oversight, where good people do bad things and bad people do worse
• Regulators act like “financial archaeologists” – great at investigating after fraud happens but poor at prevention, though they’re starting to target individual executives
• The most dangerous corporate fraud isn’t always the most obvious – companies with great metrics can be secretly abusing customers (like Root Insurance’s predatory practices)
• FOIA requests are a powerful tool for investigating companies by accessing consumer complaints and internal documents through state regulators
• A major red flag is when companies make it impossible to cancel services or trap customers in recurring billing – it may boost short-term metrics but destroys long-term value

Video

Watch my interview on The Wealthion.

Or watch it here:

We’re In A “Golden Age” Of Corporate Misconduct & Fraud

Transcript

Edwin Dorsey: We’re living in a golden age of fraud.

Adam Taggart: Welcome to Wealthion. I’m Wealthion founder Adam Taggart. A system is only as good as the people running it. And too often these days we’re finding out that folks in charge are not nearly as competent or as ethical as we’ve been told to believe. Take the scandal at FTX as just one recent example. Who watches the Watchmen? That’s an important question that’s been raised since Roman times. Who will monitor those in power and help us hold them to account? Well, one new voice doing just that is today’s guest expert, Edwin Dorsey, who tracks corporate misconduct and outright fraud over at his substack, the Bear Cave. And sadly, the number of bad actors these days is so large that he’s a very busy man. Man. Edwin, thanks so much for joining us today.

Edwin Dorsey: Adam, thanks so much for having me. I’m excited to be here.

Adam Taggart: Thanks. Well, it’s a real pleasure. I want to give credit to Doomberg, who reached out after my last interview with him and asked me if I knew of you and your work and said I definitely needed to get you on the program. Glad we could make it happen so quickly.

Edwin Dorsey: Absolutely. Doomberg is very awesome, and I loved your podcast with him.

Adam Taggart: Oh, you’re very kind. He’s a great, fantastic guest. Of course, we’re going to set the bar higher here today. All right, well, let me just start with a high level question. I like to start all these interviews at a very high level. Answer any way you like. But what’s your current assessment of the state of integrity incorporate America and the financial markets?

Edwin Dorsey: Adam, one of my favorite people, Jim Chanos, has the saying that we’re living in a golden age of fraud. And I kind of agree with him. There’s a lack of integrity at a lot of companies and, and some of the factors that are making this such a big problem, in my view, is there’s just a lot of easy flowing money. And when you’re in a period where there’s lots of venture checks being written for things and investors are throwing money at anything that’s growing, that kind of makes good people do bad things and bad people do worse things, lots of easy flowing money is not a good thing for integrity. When you have lots of retail participation in the markets, I think that can lead to companies or CEOs of publicly traded companies, you know, being a little misleading, trying to cheat around the edges to get their stock price up. When you have like a weak punishment dynamic with regulators where you can just do wrong over and over again. And the fines are kind of minimal. And usually they’re at the corporate level and not the individual level. That’s problematic. So we’re living in a golden age of fraud. And, you know, it’s very sad because it harms a lot of people. But it’s great for me because it means I have a lot to write about and a lot to research and a lot to talk about.

Adam Taggart: Well, look, we’re going to get into a bunch of sort of different ways in which corporate malfeasance is manifesting right now. I guess as you from your perch as a guy who’s sort of watching it all, are you becoming increasingly optimistic that we’re identifying this and we’re going to rein it in and our regulators are going to catch on to this stuff? Or perhaps is it the opposite, where you feel like the bad actors are getting away with more and more as time goes on?

Edwin Dorsey: You know, regulators are in some ways like financial archeologists, especially financial regulators like the sec, where they’re very good at going in and seeing what happened after the fact and telling you who was responsible for what and sending subpoenas and analyzing the laws. But they’re not great at proactively preventing bad things from happening. So that’s kind of one of the big problems we have. You know, one shift that I see happening with regulators that I think is a big positive for like improving the conduct of executives is we’re not going to, you know, no longer is it just that the company pays a fine. I think there’s been a big, big push to like, name and shame executives and get executives, you know, bad press and find them. Personally, I think that is kind of key for improving misconduct. Because if, you know, if trend is that regulators just issue small fines to corporations, every CEO is going to call the general counsel and say, hey, I’m thinking of doing this unethical thing. What do you think? And they’ll say, oh, it’s a gray area. This is the potential downside, a fine for the company, but this is how much we can make if we do it. But if that conversation is different and the CEO calls a general counsel and says, hey, I’m thinking of doing this unethical thing, you know, what are the upsides and downsides? And the general counsel is like, the downside is you could personally pay a big fine and you could get in a lot of trouble and you could be name and shame and you could get a director and officer bar for five years. I think that is much More effective even if the fines are smaller. And you know, seeing, seeing regulators take that more nuanced approach is good. Another factor we have going in our favor is now with the Internet being so open, you have a lot of people like me on substack, on Twitter, on YouTube, wherever, trying to highlight misconduct, almost forming this like quasi community of like investigators highlighting this misconduct before it occurs. One example could be Mark Cohodes being a really early whit whistleblower on FTX before anyone was paying attention to it.

Adam Taggart: That’s a great point. And I’m trying to remember the name of the guy. There was a guy who was emailing the SEC annually about Bernie Madoff. I mean this was largely sort of pre the new Internet generation you’re talking about here. But it sounds like we’ve now got more of those people kind of on the beat.

Edwin Dorsey: Yeah, absolutely. So that was Harry Markopoulos and.

Adam Taggart: That’s right, Markopolis.

Edwin Dorsey: Kind of in response to that, the SEC created a really good program like the whistleblower office, where now instead of just, you know, doing it out of your kind heart to share information with the sec, if you’re an executive at a company and there’s serious misconduct, they’re cheating on their taxes, they’re lying on their financial statements, something like that, and you go to the SEC and say, hey, like I want to be a whistleblower. You can get 15 to 30% of like any like award or any recovery the SEC levies from the situation. So people are earning like tens of millions of dollars being SEC whistleblowers and reporting misconduct. And I think that’s one of the biggest things in the finance world that’s probably short of behavior, having big financial incentives for executives at public companies to blow the whistle on misconduct. Because other than that, being a whistleblower like kind of is terrible. If you look at the history of whistleblowers, a lot of them get addicted to drug. They’re just buried in bureaucracy, they commit suicide. You’ve got all the power in the world going against very, very tough to be a whistleblower. And I think regulators over time, at least in the US have got more sophisticated about that. Accepting anonymous whistleblowers, paying whistleblowers who provide credible information, making it easier to be whistleblowers. Another positive trend. But there’s still a lot of bad stuff in the world.

Adam Taggart: All right, and we’re going to talk about that in just a sec. But it does sound like at least some good things are happening. We’re incenting people to come forward and report misconduct when they see it, protecting them, maybe in a way they weren’t being protected before, too. And it sounds like there’s. The pendulum is swinging towards more, you know, we’re going to go after individual bad actors and not just the corporate structure itself, to kind of put the fear of the executives that they could be on the chopping block. And that I think, really it’s pretty stark in contrast to going through the last big crisis we had in this country, the 2008 crisis, where there was so much banking malfeasance and really nobody went to jail. And I, back then was interviewing guys like William Black who was involved during the hearings during the SNL crisis. And I can’t remember the exact numbers, but there was. There was some, you know, I don’t know, 20,000, you know, cases brought against people. And I think something like, I don’t know, a couple thousand went to jail. Right. Where virtually nobody went to jail in a much larger crisis in 2008. So hopefully, again, we’re seeing at least some optimism going into this topic, which I’m sure is going to make people’s blood boil as we get into some of the specifics of some of the stuff you’re watching right now. So let’s now move into the world of the current bad actors. There are a couple different categories that you sort of put this malfeasance in. I know one of them is just companies that harm customers and then maybe end up failing and then harming investors and just the economy in general. So let’s talk about that first category first. Unless there’s a framework you want to introduce before we just start going one by one.

Edwin Dorsey: Adam, that’s a perfect question. And I spend a ton of time looking at individual publicly traded companies to try to assess their relationship with their customers. Because if you delight customers, if you make customers happy, you might not be a great investment, but you’re probably not going to be a terrible investment. On the other hand, there’s a lot of companies, and this is the type. Type of stuff I spend a lot of time looking at in the barricade is companies that are having good financial results. They might be, you know, be having great customer retention, their profitability is increasing, whatever, but they’re just, you know, abusing their own customer base. And it might be helpful to give a few examples.

Adam Taggart: Please do. Let’s name some names.

Edwin Dorsey: Yeah, absolutely. One of the big companies I wrote about was an auto insurance company called Root Insurance that went public in October 2020. They are a Car insurance company. And what they did is they say, hey, download our app. We track your location 247 and based on getting the data from your phone 24 7, we can determine whether or not you’re a good or bad driver. Because we see the speeds at which you drive, the areas you drive, the times at which you drive. We in theory could even figure out like your braking speed just based on your ph owns GPS data. And that’s their kind of sales pitch. We are going to be the world’s most tech savvy, smart auto insurance company.

Adam Taggart: We’re the big data of auto insurance. Yep, got it.

Edwin Dorsey: Big data. We’re going to use big data to get great auto insurance and only underwrite good drivers. And investors were eating it off. All their metrics are up and to the right. And you know, I’m, I got interested because I saw one consumer complaint about them. And then I go to state regulators and send FOIA requests for consumer complaints that consumers had filed with Root insurance. And it was remarkable. Just like hundreds and hundreds of pages of consumers saying, hey, I signed up at this great price. But they, in the pandemic, when no one’s driving, I got no accidents. They just keep increasing my like renewals 50% every year, you know, for the last five years. And they make it really difficult to cancel. So Roots underwriting greatness isn’t actually that they’re a great underwriter. It’s that they lure customers in with cheap auto insurance and then just abusively renew them. Even during the pandemic, when no one was driving. Every other auto company in the pandemic was like lowering rates for customers. And Root just is making the rates go up, up, up, up. And in tandem with that, making it really difficult to cancel. And like to give you an example, you know, I, you know, some of the documents I got from FOIA was a lawyer who represented Spanish speaking clients and he wrote the Georgia insurance commissioner saying, hey, I have like 10 Spanish speaking clients. They all have roof insurance, have no idea to cancel. And they keep getting gouged for their auto insurance. And you know, it’s just so frustrating seeing conduct like that, you know, seeing the harm they’re doing to consumers, seeing how they’re abusing their customer base. And then Wall street on the other hand, is saying, oh, look, they’re so sophisticated. You know, the underwriting is so good because their profitability is going up. Look at these geniuses. And long story short, you know, people do end up figuring it out how to cancel. Regulators do eventually probe the company. And since it’s I in October 2020, I think the stock’s down 98, 99%. And you see that a lot where cusp companies are doing things that help their like short term financial metrics, short term retention, short term profitability, but jeopardize the long run of the long term prospects of the business. But because Wall street is so numbers oriented and model oriented, I don’t think people are as good at getting that like consumer complaints, consumer like sense, at least right away. You know, another example, hey, I’m sorry.

Adam Taggart: Hey, I’m sorry real quick, just before we go to your second example, which I want to get to you, you talked about filing FOIA requests. First, I just want to explain what FOIA is, right? It’s a Freedom of Information act request. Just explain really briefly for people exactly what’s involved in making one of those requests. And is this one of your sort of primary vehicles for really digging beneath the covers of what’s happening with the companies that you investigate?

Edwin Dorsey: ADAM Absolutely. And one of the beauties of being the US Citizen is the US Government has an obligation under the Freedom of Information act to share, you know, public records with us. So any US Citizen can go to the state regulator or federal regulator and demand public records. And part of public records are internal emails that aren’t, you know, going to be used in like an immediate dispute. Part of the public record are consumer complaints people file with their insurance commissioner or state attorney general. And now the laws vary a little by state. So not all states will give these records to you at all or give them to you quickly or give them to you without cost. But because I’ve done this so much, I know which states are more responsive and which states aren’t. But basically any US Citizen can go to their government agency. Most agencies have a FOIA officer and you can give them a specific request for records and within a certain period, like 30 days or 90 days, they need to get back to you. And it’s sometimes a little bit of a dance where they might charge you, they might say we need more time to figure it out. If they don’t want to give you the records, they’ll usually, you know, invent an excuse not to give them to you. This type of tool is used by journalists a lot to hold the government accountable. And this is absolutely one of the key things I do with my newsletter because I focus a lot on companies relationship with their customers. So you can read online, you can get a sense of some consumer like complaints online. But that’s not like a hard Document, you don’t know if a competitor is writing that, you don’t know, like, what’s the truth. But going to a state regulator, getting consumer complaints, you can often see a company’s response. You know, that is to me, the gold standard in understanding a company’s relationship with its customers. And if there’s any abusive business practices or unfair and deceptive business practices going on, and you know, 80% of the time there’s probably nothing there. 10% of the time you might see more mild stuff, but every once in awhile you find really, really egregious stuff that I just know is going to have a big impact on the future of the business. And, you know, that Wall street just isn’t picking up on, at least in that moment, if that makes sense.

Adam Taggart: All right, that sounds super fascinating. Thanks for explaining that key tool in your sleuthing here. I interrupted you. You were about to go to another company.

Edwin Dorsey: Yeah. So just to give kind of another example of like, how this can work, there was a publicly traded company called the Joint, and they were a franchisor of chiropractic clinics. So you could go to any one of their franchisees throughout the US and pay for like a chiropractic adjustment. If your back was hurday, and in theory you’d pay like $20 for an adjustment, but they were pushing this type of plan where you’d spend $80 a month to get like unlimited or five adjustments a month and like get on there just like renewal cycle. And they started to grow. They were expanding their franchise base rapidly. You know, all the metrics were looking good. Wall street was taking them to like 40 times revenue. It was insane because everybody’s like, look, they’ve hit an inflection point. This business is doing great. We think they have a long Runway for growth. And you know, when I filed FOIA requests for consumer complaints, very similar pattern to root insurance, where people are like, I didn’t even know I was signing up for this monthly plan. I’m being billed and I can’t cancel. The thing that the joint did that was really abusive is in order to cancel, especially in the pandemic, there wasn’t a phone number you could call. There wasn’t a way to cancel online. You need to drive in person to your chiropractic clinic and fill out a two page form. And people are like, I’ve done this and I still can’t cancel. And just at a high level here, I’m saying, wait a minute. It looks like the company’s like, Franchise base is one probably unhealthy. Even if the financial metrics look good, if they’re doing this type of stuff, this isn’t sustainable. Once the pandemic subsides, people will be able to cancel and people will be pissed and their brand will be tarnished. State regulators had started investigating them. They had a lot of issues. They also, in my view, were kind of concealing some of the problems at the franchise level by having, you know, executives associated with the company loan money to troubling franchisees. And that was just like mildly disclosed in SEC filings. But by going to state agencies and getting more data on that, you saw like, hey, they’re like learning, you know, substantive amounts to franchisees and they’re not like clearly disclosing this. This could be a sign of problem. So I kind of at a high level sum that up. I also showed that about the chairman of their audit committee had like previously served on a bunch of boards for like failed penny St, which to me was a big red flag. And I kind of wrote about all these problems. And long story short, in like the 16 months since then, the stock’s down 80%, a lot of their franchises have begun to close or sell off and the kind of Wall street story imploded. And just to hammer this home, it’s like, you know, you can do things as a business that help your financial results. Making it impossible to cancel a subscription helps your retention and helps your financial results. So every investor thinks your value is increasing, but it’s actually dramatically decreasing because you’re tarnishing your entire future for a short term benefit.

Adam Taggart: Right. It’s a short term gain that creates long term pain. Yeah. And what didn’t help in the situation is leading up to the pandemic and then actually for a good while after, with all the stimulus funds flooding into the markets as well, you know, all boats rose. And so really what became the metric is who’s rising the fastest. And that’s where I should put my money in. Right. So these guys got rewarded for things that juiced short term results. Right. When the FOMO was really going to your point, you know, these are the companies that are going to fail the fastest once all that support’s removed because they’re doing things like abusing their customers or burning their long term goodwill for a short term gain. So, you know, we had an environment that was really conducive to practices like this. Is it over for good? We don’t know. But certainly a lot of what was propelling all that has been removed. As we’ve had the Fed withdraw liquidity, start hiking rates, tightening its balance sheet, we’re not seeing much more stimulus coming from the fiscal side of things from Congress anymore. And clearly that’s manifested in the markets. Right. We had the major indices down 20 to 30% last year. And that’s just the, the on average of the indices, there’s a lot of individual companies like some of the ones you’re listing here, down an awful lot more. All right, so you talked about this first class of custom companies that kind of get ahead in the short term by abusing their customer base. You have another one here that’s just companies that lack any real underlying economic substance or kind of actively go out of their way to mislead investors and by misleading. I’m sure lying is included under that umbrella as well. So can you, what can you tell us about these companies?

Edwin Dorsey: Absolutely, again, it’s easier for me to go with examples here. And oftentimes companies that, as I say, lack economic substance. What you really have is just like a shell of a company, you know, pretending to have something substantive and lying to retail investors to generate a lot of hype. An example of that would be Ageagle Aerial Systems, which was at one point like a billion dollar company. And they described themselves saying that we’re a pioneerin advanced commercial drone technologies. That’s what they said. They had all these investor presentations being like, we’re building drones that can deliver packages, we’re delivering, we’re making drones that can, you know, look at marijuana fields to determine whether or not marijuana crop is growing. Well, just all this bizarre stuff. And then literally within an hour of just reading the SEC filings and just trying to understand what substantively is going, you’re like, wait, they have one employee in research and development. In the last five years they spent a total of like $200,000 in research and development. Like comical numbers for a billion dollar company. Like what the heck? You know, you look at the investor base involved and there was like a Liechtenstein based hedge fund called Alpha Capital Ansell that has been involved in like 90, you know, or dozens of other like pump and dump operations and fined by the sec. And it’s like, how is this possibly a billion dol dollar company? Just seems so obvious. Like one photo that we can show is that if you look at the company’s drones on their YouTube page, it’s literally, it’s literally a remote controlled airplane with the GoPro attached. That’s what they said is their like revolution in, you know, Aviation drone technology. And this company reached a billion dollar market cap, you know, and it wasn’t even heavily shorted. And, you know, how does that happen? You know, it happens because the company goes out of their way to try to mislead investors. One of the things they did is they had the chairman’s daughter create like a locked YouTube video that had the Amazon logo next to the Ageagle Aerial Technologies logo to make it seem like a partnership was coming. And then all these stock promoters started saying, hey, guess what? We did some research. We found this locked YouTube video where the chairman’s daughter is hinting at an Amazon partnership. And you’re getting all these gullible investors to think, oh, I found the next big, let me invest, get the stock up. But it’s terrible because the company actually has nothing and it ended up falling 99%, you know, or another example is Embark Trucking. This company, real quick, I want to.

Adam Taggart: Real quick, I want to go to Embark Trucking. But what you’re talking about there. You know, this is something that’s clearly happened at many times throughout history, but one relatively recent, very high profile example of that kind of deception is Theranos. And I, I used to live down in Palo Alto and actually know some of the people that were impacted by that are affected by it. And I remember in that story they had then Vice President Biden coming to the Theranos headquarters to tour the lab, and they basically created an entirely new, separate, fake lab to walk him through. So, you know, he comes through it and says, oh, I’ve just seen some amazing things. You know, this is the future of medicine. It was all completely fake. It was a potential lab that they, they created for this guy. So, I mean, this, you know, in retrospect, we hear these things and we can’t believe people went to this, you know, huge extreme to deceive. But as you’re saying here, you know, it kind of goes on. I don’t want to say on a daily basis, but I mean, it’s something that just keeps going on.

Edwin Dorsey: Yeah. And you know, Theranos is a, was a private company. So I think if Theranos was a public company, it would have faced a lot more scrutiny and probably a lot of these issues would have become a lot sooner. Especially because there’s people with financial incentives who can make money by shorting the stock and doing the research to uncover all the nonsense going on there. So it tends to be, at least in my view, with these private companies, whether it be an FTX or Theranos, a lot of this crazy, egregious stuff can be going on and no one’s really looking into it other than maybe a local investigative journalist, because there’s no financial incentive to expose it. Right.

Adam Taggart: And the hurt is only going to be amongst generally a small number of private, Depocketed investors that, that are funding these private startups. The other thing, though is there’s less incentive to do it in a private company in the sense that you can’t pump the price of a private company overnight and then get out real fast. Right. The way that you can with this public company, especially these sort of smaller penny stocks or meme stocks or whatnot. Correct.

Edwin Dorsey: Yeah, absolutely. Because, like, you know, Elizabeth Holmes, I don’t think she sold the share. There are no stock. So she did this all and she didn’t like, you know, make any money from it, you know, and I’m not super familiar there, but it’s just like. Yeah. So it sometimes is an ego thing or you get addicted to the press coverage. I think oftentimes people are doing nonsense or committing fraud. Not just motivated by the money.

Adam Taggart: I mean, I think that’s true. But to your point about the chairman’s daughter faking people out, what not, I mean, my guess is I don’t know that specific company, but I imagine you’re kind of a shady executive. There’s a big temptation to do that if you’re trying to raise, you know, a new round or you’re, you’re, you’ve got some executive, you know, stock option bonuses coming up. You want to hit those targets, right?

Edwin Dorsey: Yeah, like, you know, some of the things you. So that is a really excessive example of the chairman’s daughter making nonsense YouTube videos. That is very, very egregious. But there’s less egregious stuff you can do to get your stock up, like issuing a lot of press release, changing your tone on conference calls and your language a little stuff like that. And yeah, you know, sometimes I’ll see companies that, you know, try to pump up their stock. Then you keep issuing more and more stock to get cash, which is valuable. And then you’ll have a public company that really has no substance, that has a lot of cash. And how do you get that cash to executives? How do you really cash out? You’ll see these unethical companies pump a stock, issue a lot of shares to get cash from new investors. The company has cash, and what the company will do is they’ll start acquiring all these random related party businesses. They’ll acquire the CEO’s other company they’ll acquire furniture from the CEO’s wife, they’ll acquire a board member’s company for $100million. They’ll do all these shenanigans. And there’s real publicly traded companies, 1 to $5 billion market caps doing these like nonsense related party transactions just to get shareholders cash out of the business and into the hands of management and board members. And it’s disgusting, it’s terrible and it happens all the time. And I guess it’s kind of good it happens because it means I can write about it and people pay attention, but it’s disgusting. And like that’s what sometimes frustrates me with the state of corporate America in journalism is people people like to criticize. People aren’t good at differentiating the egregiousness of misconduct because there’s misconduct everywhere, there’s bad behavior everywhere. But there, there’s something like deeply, deeply, completely wrong with using shareholders cash on frivolous acquisition, these acquisitions to enrich board members and your wife and whatever and essentially launder money out. That’s a lot different than you know, being too aggressive on a conference call and like you know, just maybe being a little incompetent. But it doesn’t seem like the financial media is like good at like or investors are good at differentiating the level of egregiousness and kind of going back to what we talked to earlier, a lot of places make it difficult to cancel things, but you need to the big thing that where you can have value is how egregious is it? Is it, you know, just a little difficult to cancel and people are complaining online or is it basically impossible and people are like you Companies are billing a consumer against their will because that the most egregious stuff will always be addressed in the long run. You can’t build a multi billion dollar business if 90% of your customer base is pissed off at you and trying to cancel.

Adam Taggart: Yeah, that’s a great point about sort of degree of abuse here. You know, we kind of lump it all into misconduct, but not all misconduct is created equal like you’re saying. And you know, you’re talking about how egregious this can be and how it really can frustrate you. And that’s the whole point. I meant when I said earlier that a lot of what you’re about to talk about in this conversation is going to make people’s blood boil. I’m just curious back to what we talked about at the very beginning. Are we beginning to see more of Those people that are doing kind of the crazy shenanigans that you were talking about, the deliberate pumping of the stock and buying all these other, other stupid companies just to get cash flow or investor capital into the business so the execs can extract it. Are we beginning to see more of those people start to get held personally accountable for this stuff?

Edwin Dorsey: You know I think it’s too early to tell. I think the worst stuff.

Adam Taggart: Sorry, let me ask it a different way so you can answer. Has the status quo up until now been. Those guys were largely getting away with it?

Edwin Dorsey: Yeah. And SPAC deals were a big proponent of this nonsense, where you’d have companies that just are just nonsense. Like, you know, there’s no way it’s worth $2 billion. Merging at a $2 billion valuation, taking a lot of retail money, having this entire ecosystem to sucker retail investors into investing in nonsense deals, and then seeing all that evaporate. That game has completely changed where, you know, eventually people wisen up and say, hey, your four last SPAC deals fell 80%. Maybe I don’t want to invest in your fifth year. So seeing that deflate, I think has led to a lot of the, like, big nonsense kind of go away. Did I answer your question?

Adam Taggart: Yeah, yeah, you did. You did. Okay, well, look, I had interrupted you when you were about to go into Embark as another example of one of these, you know, sort of highly misleading companies.

Edwin Dorsey: So that is just a little similar to Theranos where you had a 26 year old CEO, you know, of an autonomous trucking company, they made software for autonomous trucking go public via SPAC at like a 4 billion multibillion dollar valuation. And you just read the prospectus, just read the SEC filings, and a bunch of things would pop out. They said they owned no patents, even though their competitors each owned hundreds of patents. And it’s like, wait a second, why do you own no patents if your competitors own hundreds of patents? And they’re like, we rely on trade secrets right away, I think they’re in us, like, this might be like nonsense. And then you’re like, well, who are these other executives? And they wouldn’t really advertise it. But the 26 year old CEO, all the other executives were like friends from his college class. And I’m like, well, this is a little odd. And usually if you’ve got a burgeoning startup, something growing really fast, new technology, you hire an adult in the room, you hire a professional who comes in to help give it legitimacy. And they hired a famous engineer from Tesla who Left after six months. And one of the big red flags consistently over time is if you see an executive join and then leave, leave like within a year or within 18 months. Because no one ever does that. No one ever goes moves to join a new company and then quits after18 months or less unless there’s something really bad going on. And if you see that with multiple things, you know, you know, there’s like something under the hood that didn’t make sense. And oftentimes what I see is companies that have issues try to like cover it up in the public eye. So what Embark did that, you know, was another red flag is if you looked on Glassdoor, the CEO had like 50 five star reviews, tons of positive things on Glassdoor about the company. But if you look at the date of all the reviews, like all the reviews were posted literally the day the SPAC merger was announced. So these aren’t like legitimate reviews for employees saying we love the CEO. This is the CEO’s HR office saying, everybody go leave a five star review on Glassdoor. We got a spacious deal. It’s just like, you know, so just a small amount of initiative and like digging into this, you find these really crazy situations of companies just trying to mislead investors, getting multibillion dollar valuations from it and then of course collapsing. And I think Embark is down over 99% since its SPAC merger less than two years ago. So, you know, it’s infuriating, it hurts investors who lose a lot of money, but it keeps happening. You know, the SPAC stuff has declined, but not good.

Adam Taggart: God, you’ve got so many topics wrapped up in there. Just the SPACs themselves as a highly speculative vehicle may go down as one of the dumber ideas of this decade, but the 26 year old CEO, I mean, does that really ever work out? Well, the young kid is put in charge of the multi billion rocket ship company. Those stories just always seem to prove out. More often than not it seems that, you know, it was a total, you know, cash burner and fly by night operation. But you also talked about this was in the autonomous trucking space. What’s the company? I can’t remember the guy’s name, but there was the CEO of Nikola, I think.

Edwin Dorsey: Yeah, Trevor Milton Nikola

Adam Taggart: Trevor Milton Nicola and I mean that company’s had a lot of troubles, but certainly one of the more famous things that he did that really blew back on the company was creating a promotional video showing their truck actually in operation before the street was expecting it to be. And Then it turned out basically, you can’t tell from the way it was shot, but they just basically put a truck on a hill in neutral and let it roll down the hill, right?

Edwin Dorsey: Yeah. So, Adam, the example you’re talking about, it was highlighted by Hindenburg research and this trucking company, hydrogen powered trucking company, Nikola or electric truck company. They wanted to show that their truck could drive when it couldn’t drive. So they found this special hill in Utahthat had a 3% downgrade and they just started pushing the truck and let it roll slowly down this hill so they could shoot a promotional video that made it seem like it was moving when it wasn’t actually moving, like under its own propulsion. It was just rolling down a very low incline hill. And you couldn’t. Cantell from the video. I’m going to use that, Adam, almost as a counter example here. I don’t think that’s as egregious as people make it out to be. Now, the media went wild because it’s funny, it’s hilarious. They’re rolling a truck down a hill. It’s like, oh my goodness, how bad that is that I’m going to say, I don’t think so. That is nowhere near as bad as this ageagle aerial or embark trucking stuff. Even though the media gave it a hundred times more press because that happened, happened when it was a private company. It wasn’t even a public company when this was occurring. This was like, you know, private venture capital rounds. And it’s like you, you’re just building hype among potential customer base. You’re not even misleading investors with it. That’s not part of an investor presentation. This is just when you’re a private company, you’re doing that. And you know, it’s actually like a common thing from the auto industry to like build models that can’t move under their own, like, propulsion, like just, just to see if you can manufacture it and stuff like that. My understanding from Auto Manuf is it’s a little bit like making a drug. We’re making the first few models is really difficult, but like subsequent models get a lot easier as you mass produce. It’s so like when you dig into that a little deeper. And Nicola had like thousands of employees, millions in research and development. Don’t get me wrong, there’s a lot, a lot of issues there. And Nate and Hindenburg did great job pointing it out and it was ridiculous. It got to like a $10 billion plus valuation. But there’s a difference between that. Where you’re kind of, you know, as a private company building a little hype and the media is just going after you like crazy. And yeah, you’re like lying a little versus having nothing. And I mean, like, you’re spending 40grand in R and D, you have half an employee working on your drone, and you reach a billion dollar valuation that way. The Nikola stuff, I think, can be a lot tougher to decipher as an outsider, which is why Hindenburg and a lot of these activist shorts will contact recent former employees and literally just like, act like an investigative journalist and talk to people. People where the stuff I’m more focused on, at least in my view, is like, this is peanuts. This is. This. I could do this in my sleep. It’s so egregious. And it’s almost all document based. You can learn everything I learned just by reading the company’s filings, being inquisitive, curious, applying scrutiny and filing FOIA requests and state regulators. So there’s levels to all this stuff. And I don’t. And I think there’s a lot of stuff that happens that’s so much more egregious than Nikola that just people don’t talk about and it’s frustrating.

Adam Taggart: Okay, got it. This goes back to the earlier discussion that, you know, there are degrees of egregiousness, and you’re basically saying that you hang out in the deepest part of the pool where all the real trash and garbage, you know, is collected. Yes, there’s a lot of junk in the pool itself, but you’re really trying to focus where the most people are getting hurt the most.

Edwin Dorsey: Yeah. And the important thing is it needs to be something that the market doesn’t fully appreciate. I could go, I could say, hey, here’s a payday lender trading at 3 times earnings and half of book value. Here’s all the issues with it, but the market’s kind of saying, well, we understand that we’ve priced it in. So you bringing this to our attention, like, doesn’t do anything. Like, everybody understands acting this gaming way, where I can do a lot about add a lot of value, where I think I do my best work is if there’s a company that, you know, everybody seems to love that’s getting a great valuation from Wall street, but is secretly not understood by everybody. Eng and really, like, you know, egregious misconduct, in my view, that that’s where you can add a lot of value, at least with my newsletter.

Adam Taggart: Got it. Yeah. You’re breaking the news. You are the young boy finally Saying the emperor has no clothes and just changing the entire perception of something overnight. Got it. This is a question I was going to ask you at the end, but I’ll ask it now and then we’ll keep going through your categories of companies. But you mentioned John Chanos earlier in one of your answers. And for those that don’t know, Jim Chanos, sorry, Jim Chanos, he runsKynikos and is one of the most well known and most respected short sellers around. And I’ve got to imagine, you know, that he would think a service like yours that you offer through Bear Cave is a great opportunity for finding targets for shorting.

Edwin Dorsey: Yeah, absolutely. Jim I’ve met a few times. I think he’s a wonderful human. He’s a subscriber to the Bear Cave, which is kind of awesome.

Adam Taggart: Congratulations. That’s very cool.

Edwin Dorsey: The main people who read the Bear Cave are people who are interested in short selling, law firms looking to sue companies and people who actively short.

Adam Taggart: Okay. Yeah, so yeah, so I mean, on this channel we’ve talked a lot about the opportunities in shorting. We’ve also really told people, you know, most people shorting’s tough. I mean, it’s tougher than just being long, especially in the markets that we have had for the most better part of the past 10 years because kind of everything went up, even the junk, as you’ve said, a lot. So we do encourage that people generally work, if they’re going to short work with a financial advisor to kind of help hold their hand and help them make sure they’re not putting too much at risk in case the trade goes against them. But there is lots of opportunity in short for the right person who’s done their homework. And what’s great about you, Evan, is that you’re doing a lot of the homework for people, which is great. So, all right, let’s get to your third category here. Oh yeah, sorry.

Edwin Dorsey: Go ahead, can you back on the point you just made about the difference.

Adam Taggart: Absolutely.

Edwin Dorsey: You, you mentioned Jim Chanos earlier. Jim Chanos, gold standard of a short seller, like kind of world renowned for being a great short seller, I think is fun. Chanos and company or Kinnikos. Like if you look over the very long period of time, I believe he’s about broken even on his short shorts. So the guy who’s best in the world at short selling or one of the best in the world has with his short book about broken even or maybe made a 1 or 2% return on the shorts over time. So, you know, if you’re like, if you’re a genius at this, you’re, it’s tough to make money. And the reason he’s still adding value if he does this is the market on Average goes up 9, 10 a year over the very long run. So if you’re just short the market, you’re probably losing 9 or 10% a year. So if you’re short and break even, you’re actually doing quite well because you could get levered long and reduce that risk. But just on his short portfolio, short only, I’m pretty sure Chanos is more or less broken even or made a 1 or 2% return over a very long period of time. So it’s very tough if you’re at least running a portfolio and sticking with the larger apps to make money shorting over the long run.

Adam Taggart: I really appreciate that additional intelligence. Yeah, and you’re just helping reinforce the perspective here, which is there is opportunity there, but you got to go in wise wide open because it’s not an easy place to make your money. You got to be really good on the timing. Right. You can have a great thesis that might even get proven right over time, but if it doesn’t happen in the time in which you’re exposed, it’s that classic the market can remain irrational longer than you can remain solvent. Are you?

Edwin Dorsey: Precisely.

Adam Taggart: All right, well look, so one sector you’ve been looking at closely, obviously because of recent events like ftx, is the crypto space. So there’s been a big collapse in crypto banking which maybe you could explain a little bit and connect to how that is enmeshed with the regular US banking system in ways that probably a lot of people don’t understand.

Edwin Dorsey: Yeah, absolutely. So when FTX collapsed, me being me, I naturally wanted to see are there any publicly traded companies that are going to be affected by this or what are going to be the follow on effects. And right away it was like, people think the crypto ecosystem is just some offshore things with kids gambling around with play money. There’s no way it affects me or my U.S. bank or my hometown bank. And, that was reinforced by Janet Yellen on November 30 who said in a press conference, quote, the good piece of an explosion like we saw is that it hasn’t spilled over to the banking sector. Banking regulators have been very careful about crypto. That’s what Janet yellen said on November 30. And it turns out that it’s kind of not true. Or atleast my view on it is that the US banking Sector or a specific sliver of small banks have a lot of exposure to the crypto ecosystem that isn’t immediately obvious to people. And this exposure comes in five different ways at a high level. Number one is deposits. There’s a lot of banks, not necessarily big ones like bank of America and JP Morgan, but smaller ones like Silvergate and Signature bank and Metropolitan bank. These like one to $10 billion banks that literally and Community Bancorp that got tens of billions of dollars of deposits from crypto related companies like stablecoin, like Circle, like exchanges like FTX and other other places in the crypto industry. Because all these players needed places to deposit their money at banks, most of the big banks didn’t want anything to do with them. So there’s a sliver of small banks that said, hey, we can get this huge base of deposits from crypto companies and we don’t even need to pay interest on them because these clients are kind of desperate for banking relationships. And we can earn a lot of money taking the tens of billions in deposits, getting them for free and then loaning the deposits out at much higher rates like banks do. And you know, that alone is kind of problematic because you saw with Silvergate bank where all their deposits were with crypto companies, their deposit base has like gone down rapidly. And when your deposit base goes down rapidly, you need to sell off your securities down rapidly. So you need to like sell your mortgages that you own, you need to sell your municipal bonds, whatever, and you’re selling them at worse and worse prices as it gets illiquid. So banks like Silvergate took a big hit hit on their like crypto deposit base. And I think you could see other banks like Signature and Community Bancorp get hurt as their deposit base rapidly diminishes from crypto companies. Another example is transfers and transactions where two specific US banks, Signature bank and Silvergate bank, processed over a trillion dollars of like transactions for these crypto companies of people getting on the platform with US Dollars dollars getting onto the platforms or getting off these crypto platforms, you know, back into US Dollars. And the bank intermediaries that did that are kind of responsible for know your customer compliance and anti money laundering compliance. And at a high level it looks like they’ve completely failed there where you process literally trillions of dollars of transactions for getting money onto and off of crypto companies. And you know, some investigative journalists have made like a accounts as bora on some of these like crypto firms. And I’ve been able to get bank accounts like as like this Frivolous character or you know, you know, so there’s been some early litigation showing that, you know, I think Silvergate bank processed $400 million of crypto transactions onto and off of platforms for like a cartel money laundering. And that’s something I published about, you know, so, so if you transfer trillions of dollars in payment payments, you know, you’re responsible for, know your customer compliance, anti money laundering risk compliance, the fines there can be incredibly steep. If you don’t fulfill your legal obligations to file Suspicious activity report and not support that type of conduct. And I think the banks there fail, they’re going to have a lot of risk. A third category of how the US banking system is intertwined with the crypto ecosystem is loans where some smaller banks like Provident Bancorp, which is the 10th oldest bank in the country, was loaning money. They just decided to pivot into this crypto space and start loaning money to like bitcoin miners and you know, digital asset platform companies. And those loans as you can imagine have performed horribly. The bank is taking huge write downs. The CEO just departed and now you have the 10th oldest bank in the country potentially going under or suffering because they decided that they’re going to pivot into the crypto space that it’s like so embarrassing. But another example, and then two final ones that are a lot smaller on how the crypto space is intertwined with the banking space is we saw some banks or some crypto platforms like FTX invest in like really small, like local community banks. Like I think it was Moonstone Bank, FTX took a stake in this one branch bank in Idaho or Nexobank took a one took a small stake in Summit national which is another one branch bank in the US and it’s not completely clear to me why they did that or with the exposure is going to be for the banking system. But that’s kind of a big question mark. And then the fifth is FDIC insurance where a lot of crypto companies and the crypto banking platforms would say, hey look, we’re FDIC insured, your deposits are FDIC insured. Even though that might not always be true in certain cases. And if one bank under FDIC insurance fails, like a silver gator signature, that is going to have like ripple effects where either the government might need to come in to backstop the FDIC or FDIC is going to raise, raise the insurance rates they charge other banks which is going to then trickle down to all of the other consumers. So the important point here is you think oh, it’s a bunch of kids in Miami playing around with NFTs and nonsense offshore. But it’s actually like. No, the crypto banking ecosystem. The crypto ecosystem found its way to the US banking ecosystem over these last three years, you know, to the tune of tens of billions of dollars in deposits, trillions of dollars of US dollar transactions. And there’s going to be, like, significant, you know, fines, I think, for some of these banks. And the cost might be borne either by the taxpayer or all bank depositors.

Adam Taggart: That is really super fascinating. This is what people talk about when they talk about contagion in the banking system. Historically, we’ve talked about it where, you know, some banks start failing, and then banks that were lending to those banks and doing business with them then get compromised and it starts sort of cascading towards the center. This is almost like a Covid type of infection contagion where just people weren’t expecting this. Right. It’s a pandemic that came out of nowhere. Right. Oh, we thought this crypto thing was just sort of offshore and people playing around, but all of a sudden it’s doing some real damage in here potentially, man. The part about the FDIC insurance I hadn’t even thought about. But that could just raise the cost of banking going forward, hurting both the banks themselves as well as taxpayers. If we’re funding all the backstop that’s going on, and we’d certainly pay in higher banking fees as well, just as consumers. That’s really interesting in terms of, like, you know, you turn on the light and you see that. You turn the light in the middle of the night. That’s where you see the cockroaches. Where the cockroaches are. Right. Like, where are we, do you think, in this story, in terms of finding out how bad the contagion in the infection is? Like, in terms of innings, is this still inning one? Are we halfway through the game or near the end, what you think?

Edwin Dorsey: I would say inning three. You know, inning one might have been in November when FTX was just collapsing. You know, it’s like Silvergate bank, the bank that’s kind of really involved in all of this. I think their stock’s down 90% over the last year or so, which is a sign at least the market for that specific bank has said we recognize there’s huge problems, so we can’t really be in any one anymore. But we’re still seeing these big banks that I don’t think it’s fully priced in like a signature or metropolitan Bank. You know, the big question is going to be like, how much in money laundering went on on these crypto platforms, and how big of a role did banks play? That is going to be like, you know, otherworldly fines, in my view. And we.

Adam Taggart: Because that’s where the big penalties come into play, right?

Edwin Dorsey: That’s where the big penalties come into play. And bank boards, unlike, you know, most boards, most boards have, like, director and officer insurance. My understanding is bank board members can be held personally responsible for some of the misconduct their banks go. Even if, like your directors and officers insurance, if you’re a bank board member, does not apply in certain scenarios, if it’s like, true negligence on the part of the boards. And that’s like, a unique thing to the banking sector. So we’re going to see some, like, I think, really crazy stuff come out over the next few months, and we’ve even seen regulators start to signal that where in November 30, I told you Janet Yellen was like, there’s no problem. Now, I think the treasury and the Office of Comptroller releasing a joint statement saying, actually, we think there’s a lot of problems, and we’re very concerned with certain players, which is kind of a signal saying, one, stop the nonsense. And two, we’re gonna. We’re gonna. We’re gonna, like, you know, throw the book at you if you were really doingegregious stuff. So inning three, inning four. But there’s a lot to play out, in my view.

Adam Taggart: All right. Wow. Oh. These are all reasons to keep reading the Bear Cave to find out how the story unfolds. Speaking of which, how do you. How do you find these companies? How do they get on your road radar?

Edwin Dorsey: Absolutely. So I’m like, very simple. I’m addicted to Twitter. Adam, I know you use Twitter a little. I’m a Twitter addict. I’m on there two, three hours a day. I follow thousands of people. I got different lists of smart people. I’m bookmarking, like, 50 tweets a day. It might not be healthy, but I think it’s a great way to find ideas. Oftentimes it’ll literally just be a tweet of somebody complaining about a business. I follow, like, nonprofits that do consumer advocacy. I follow, you know, other short sellers. I. Twitter is an amazing tool. I’m also, like, you know, I spend a lot of time on YouTube, so. And YouTube learns. I like watching videos of people complain about companies. So I get more and more videos of people complaining about companies.

Adam Taggart: That’s a Great way to use it.

Edwin Dorsey: And every big company is going to have some complaints. It’s always a question of, like, how Regis is the kind conduct. But Twitter, YouTube, I read a lot of SEC filings, SEC comment letters. And the one thing I do is. That’s kind of funny. I call border left. So anytime I see a recent IPO or SPAC deal collapse, like, fall 90% in a year or six months, it’s. I look at all the board members and I say, hey, you served on the board of this failed company. What other boards do you.

Adam Taggart: What other companies are you on?

Edwin Dorsey: Yeah, if you. If you. If you did one nonsense company, I bet your other companies are a little bit of nonsense, too. And you’d be amazed at how often it’s like, hey, this person serves on three boards. The first two were SPAC deals that fell 90%, and their third is, like, a $2 billion recent IPO. And I’m like, this is so good. And a skeptic might say, oh, why does that matter? Does the board even influence the value of the company? And I would say, maybe minimalist. But it’s a sign of, like, deeper issues. Because like attracts like.

Adam Taggart: Exactly. It’s a sign of an ethos or a culture. Yeah, it.

Edwin Dorsey: It precisely. It’s a sign of, like. So oftentimes, what I’m doing in this early stage of trying to find a company is just, like, identifying these common red flags. Another thing I do is every day, every week, at the end of every week, I look through the 300 or so, like, publicly disclosed recent resignations, and I, like, try to find the five or ten most egregious. For example, a CFO who leaves after just four months. Or, like, the head of hr. You’ve had three different head of HR in, like, the last four years. Stuff like that. That’s, like, a sign of, like, something being wrong at a company. I look at that every week. I highlight a few of the not able ones in my newsletter. And that can serve as, like, an impetus for me to be like, hey, you seem a little sus. Let me check you out. Yeah.Yeah.

Adam Taggart: Yeah.Yeah.And I’m guessing that as you built a community around tracking companies like this, you get a lot of people out there kind of doing a lot of gum shoe detective work for you and saying, hey, I just noticed this bit of news about this company or just heard this customer complaint.

Edwin Dorsey: Adam, you’re so right. That’s the thing I forgot to mention. And that’s the beauty of, like, doing this for a while. People are willing to send you inbound tips. So I really function almost like a journalist looking for this stuff, proactively getting inbound tips from readers and then just like, you know, investigating for a while.

Adam Taggart: What is the best way for people to send you tips? I’m sure in this video they’re going to be a few people at least, Edwin, who have had a bad enough experience with a company that they’re motivated to let you know about it. What’s the best way for people to reach out to you like that?

Edwin Dorsey: If you know a public company that’s misleading investors or harming customers, you can email me edwin8585research.com or just DM me on Twittered edwindorcey@stockjabbers. So Edwin Dorsey, find me on Twitter or just like look up the bear cave and reply to any of the emails there. It should be easy to reach me.

Adam Taggart: All right, great. Well look, in beginning to kind of wrap things up here, this has been a fascinating discussion. Edwin, thanks so much. I’m going to have to thank Doomberg for making this connection here and getting you on. What are some common red flags that investors should look out for when thinking about investing in a public company that maybe they could check before hand just to say, okay, I want to reduce my odds of getting surprised that this company’s deal doing shady things behind the scenes.

Edwin Dorsey: The easiest thing is just to read SEC filings and read the risk factors and just see if you can understand a business. Read the investor presentation and see if it makes sense. For me, oftentimes I’m reading something, it’s just gibberish. I can’t understand it. If you can’t understand it, that’s generally a big problem. I think something really easy to do is just look at all eight board members and Google them and see what other company boards they’ve served served on. And you know, I use a tool called the SEC Full text search tool, which is this public site by the SEC that lets you search all SEC filings inexistence. And what I do is I take each board member’s name and I put their name in the SEC full text search tool. And that means I can see every, every time that board member has been mentioned any SEC filing ever since 2001. And if you do that, then you can get like the most comprehensive in my view, like biography of a board member. You can see the other boards they served on, the ones they’ve resigned from. You can see times they’ve been shareholders or mentioned in other companies press releases. And if you see like board members of A big company who have been involved in a lot of failed companies or penny stocks or promotions or stuff like that, that is a huge, huge red flag sign to avoid. You can look for executive turnover. A high level of executive turnover is bad. And, you know, just read like consumer complaints. Something as simple as going to YouTube and typing in the company’s name plus complaints. Or. Or like, at least for consumer focused businesses. Wall street likes to be fancy and hire consultants and expert network calls and say they have a proprietary model. I think just like the bare bones. Like, you wouldn’t want to invest in a pizza company. Read the consumer reviews on the pizza. Taste the pizza. Like, look into the executives a bit. That’s how I prefer doing it. And I think just having a little bit of initiative to look into the board members, look into the executives, see their history. History. See who the auditor is. If it’s a big four, that’s a slight positive. See the consumer complaints. Just do a little bit of Googling. That goes a long way.

Adam Taggart: Yeah, it’s amazing. You know, Edwin, I’ve familiar, you know, past incarnations of my career working with management consulting companies. And, you know, I can see the massive, you know, decks that they would create. Create to replicate the type of work that you’re doing and the massive charges that would come along with it, massive fees that would come along with it for their clients. And they’d have 12 different people at the management consulting firm involved in the project. By your scrappiness, you’re basically getting a lot of the same value that they’re assessing out there. And in many ways, doing a level of gumshoe detective work that they don’t even stoop to doing. But it’s where you can really uncover the most of this stuff. So it’s really impressive what you’re doing there. Bear cave.

Edwin Dorsey: Well, thank you. Adam and I had a lot of time talking about it on here, and thanks for having me on. And no, it’s a lot of fun. Great.

Adam Taggart: Great. Well, so folks that want to follow you in your work, Edwin, where should they go? Presumably, they should start by going to the Bear cave. Right.

Edwin Dorsey: Adam, just Google the Bear Cave newsletter and it should be the first thing to come up. And you can check it out there, or you can just GoogleEdwin Dorsey Twitter, and my Twitter will pop up and I’ll tweet about stuff.

Adam Taggart: Okay, so. All right, great. And when we edit this, Edwin, we’ll put up the URL to the bear cave and to your Twitter handle and whatnot so people know exactly where to Go. This has been a super pleasure, Edwin. Thanks for coming on. And you’ve underscored in many ways. You know, a big part of this channel’s mission is to help people build wealth. And a big part of building wealth is to, you know, take prudent steps, to build momentum in the right direction. But it’s also to add a layer of risk management so that you’re less vulnerable to just general market setbacks, but also that you’re less vulnerable to outright misconduct or fraud or minimize your chance to get surprised by that stuff. So that’s one big reason why I’m such a big fan of your work and just want to underscore, for most people that have real lives, real jobs, it’s hard to do a lot of this detective work on your own, which is why you want to leverage experts like Ed and just a good professional financial advisor that does the right kind of due diligence when they make an investment in their portfolio to make sure that they’re only investing in companies that have a very high probability of being run with acceptable integrity. And look, if you’ve got a good professional financial advisor who’s serving as that kind of guide for you, great. Stick with them. They’re extremely valuable. If you don’t have one or you’d like a second opinion of one who does, does feel free to schedule a free consultation with the financial advisors that are endorsed by Wealthion. It’s totally free. It doesn’t cost you anything. There’s no commitment to work with them. It’s just a free public service they offer. Soto schedule one of those, if you’re interested, just go to wealthion.com fill out the short form there, and they’ll be right in touch. And if you’ve enjoyed this conversation with Edwin just a fraction as much as I have and would like to see him come back on the channel in the future, please do me a favor and support this channel by hitting the like button, then clicking on the red subscribe button below, as well as that little bell icon right next to it. Edwin, it really has been a pleasure. I hope we can have you back on this channel when you know you’ve got something that you think is important enough to let the general audience know about in terms of any misconduct that you might be seeing in the future.

Edwin Dorsey: Adam, Absolutely. This was a blast. I think you’re doing great work. Thanks for having me on.

Adam Taggart: All right, thanks so much, Edwin. Everybody else, thanks so much for watching.

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