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Stansberry Investor Hour

Simple Yet Powerful Tips for Short Selling – Exposing the Red Flags

Stansberry Investor Hour

Stansberry Research

America, How, To, Crash, Money, Learn, Stansberry, Income, Research, Debt, Stocks, Porter, Business, Realestate, Banking, Investment, American, Investing, Invest, Howtosave, Sjuggerud, Ferris, Eifrig, Jubilee, Buck, Sexton, Market, Bonds, Churchouse, Savings, Options, Lashmet

4.4677 Ratings

🗓️ 4 November 2024

⏱️ 65 minutes

🧾️ Download transcript

Summary

On this week's Stansberry Investor Hour, Dan and Corey welcome Edwin Dorsey to the show. Edwin conducts deep, investigative analyses of public companies in his newsletter, The Bear Cave. By prioritizing customer relations and common-sense logic over financial data, he can gain an edge and find troubled companies for his subscribers before Wall Street does.

Edwin kicks off the show by explaining how he got his start doing short-selling research and how he identifies prime opportunities for shorting. Rather than focusing on the financials, he hunts for $1 billion to $10 billion companies in the technology or consumer sector with bad customer relationships. Edwin shares case studies of how he discovered safety issues at two child-focused companies. The first was caregiver platform Care.com, which wasn't properly vetting its caregivers. The second is Roblox, which has ongoing issues with child predators and gambling. (0:39)

Next, Edwin talks about why candy maker Hershey could face long-term issues now that trendy competitor Feastables is steadily stealing market share and doing a better job of appealing to the younger generation. As he points out, most investors tend to be older and male, so there are often blind spots for companies catering to youth and female demographics. Edwin also makes his bearish case for the predatory fitness-center company Planet Fitness. With the Federal Trade Commission working to make canceling memberships easier, this is bound to hurt the stock. (24:12)

Finally, Edwin names several companies that are doomed thanks to the rise of artificial-intelligence technology. He highlights call-center businesses and tax-service providers in particular, but also warns of downstream effects. After, Edwin talks more about how he first got interested in the financial world, how he learned that the numbers don't matter if the underlying business is not sustainable, and how he picks which stocks to go long. (40:23)

Transcript

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0:00.0

Hello and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and the Ferris Report, both published by Stansberry Research. And I'm Corey McLaughlin, editor of the Stansberry Daily Digest. Today we talk with Edwin Dorsey, editor of the Bear Cave newsletter. Edwin is a very bright young guy. He digs deep and has a unique skill set that

0:23.5

I'm really excited for you to learn about. So let's do that. Let's talk with Edwin Dorsey. Let's do it

0:30.2

right now.

0:40.7

Edwin, welcome to the show.

0:41.9

Really glad you could be here.

0:45.8

Dan, Corey, thanks so much for having me on the Stansberry Investor Hour.

0:47.0

It's an honor to be here.

0:51.7

You know something both, I think both Corey and I, I'll speak for both of us in this case.

0:54.5

I think we were both surprised at how young you are because your content is amazing.

0:58.5

I would agree, yeah.

1:01.8

I guess let's start, yeah, let's start there.

1:04.9

Let's ask, how did you come to be the guy

1:09.2

who writes this wonderful substack called the Bear Cave,

1:12.4

which is loaded with pretty deep short side kind of research? How did you come to do this?

1:21.4

Thank you so much, Dan. And I've been passionate about stocks from a really young age,

1:26.5

like second grade, I was obsessed

1:28.5

with the stock market.

1:30.1

Now, the transition to the short side happened a little bit around my freshman year of

1:34.3

college where just by coincidence, I got introduced to two of the big players in the short

1:39.4

world.

1:40.1

One guy, early mentor was named Mark Cajodas, who used to run a short short only fund and now is more of an independent skeptic and short seller.

1:48.0

And my other early mentor was Jim Carothers, who ran a billion dollar short only fund called Sophos.

...

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