Edwin Dorsey's Bear Cave

And now for some more Fatal Conceits…

Welcome to Episode #80 of the Fatal Conceits Podcast.

In today’s conversation, we talk with Edwin Dorsey, the man behind The Bear Cave newsletter. Edwin provides analysis, commentary, and curated links on the short world, focusing on corporate misconduct and malfeasance in companies in the $5-10 billion range.

Over the course of 45 minutes or so, we talk about why the mainstream media continuously, almost reliably, misses the big stories when it comes to fraud and bad actors.

Bonner Private Research is a reader-supported publication. To receive new posts and support our work, consider becoming a free or paid subscriber.

Edwin also gives us his take on the crypto eco-system, and how it is much more intertwined with the US legacy banking system than most people realize. He lists 5 specific ways in which banks are potentially exposed… none of which inspire much confidence this will end well.

Needless to say, this has potential knock-on effects for institutions that dove headlong into the crypto sphere without appropriate safeguards in place. Now that liquidity is drying up in the space, some of these banks are looking shaky to say the least...

Finally, Edwin offered his insights on the way alternative media platforms, just like Substack, are helping to reshape the financial media landscape, particularly in the short world.

Please enjoy this episode and, as always, feel free to share our humble podcast far and wide. The larger our audience, the more time we can spend putting into these episodes and the more guests we can feature for your listening and learning in the future.

Also be sure to follow Edwin’s excellent research over at TheBearCave.Substack.Com and follow him on Twitter @StockJabber

Cheers,

Joel Bowman

TRANSCRIPT:

Fatal Conceits Ep #80 - Edwin Dorsey’s Bear Cave

Joel Bowman:All right. Well, welcome back to another episode of the Fatal Conceits Podcast dear listener. As you know, it's a show about money, markets, mobs and manias. And this of course is our first show for the new year, for 2023. So, thanks for joining us.

If you haven't already done so, please head over to our Substack page. You can find us at BonnerPrivateResearch.Substack.Com, and you can sign up there for our free newsletter, which covers everything from high finance to lowly politics and plenty more.

I am delighted today to welcome a fellow Substacker to the show, Mr. Edwin Dorsey, who writes the very popular Bear Cave newsletter, which provides analysis, commentary, and curated links on all things short world that is leaping tall tales and exposing misconduct wherever he goes.

You can check him out at TheBearCave.Substack.Com or follow him on Twitter. For those of you who are snooping around the little blue bird, his Twitter handle there is StockJabber.

Edward, happy new year. Welcome to the show.

Edwin Dorsey:Joel, thank you so much for having me on. I'm very excited to be here.

Joel Bowman:Fantastic. We were just mentioning off camera, it looks like we've coordinated our uniform for the day. As you said, we can let the ideas speak for themselves and keep it simple.

Let's start off with your take on how alternative media platforms, like Substack, that we're both enjoying right now, are moving the landscape, particularly for financial media and especially in an era where we see plummeting trust in traditional mainstream news outlets.

Edwin Dorsey:It's been absolutely revolutionary. One great example I always like to highlight is my friend who writes the anonymous Doomberg newsletter that's focused on doom, gloom, finance, energy, all sorts of misconduct. And this is just a guy who started a publication and Twitter handle from nothing.

And over the course of two years, he's built like a 200,000 person Twitter following. He's built a newsletter that is earning him over $3 million a year. I mean, these are huge, huge numbers that shows there's a real appetite for genuine, authentic takes on the world and maybe a lacking of trust in the traditional media.

So, we're seeing a big shift from brand names to individuals. And now, with Substack removing all the friction to starting your own publication, people... individuals can easily start a publication and individuals can earn each other's trust. So, for me, it's been a huge boon. No decision I've made has been better than starting the Substack and I'm obviously a huge Substack fan.

Joel Bowman:Well, congratulations. You're doing some really fantastic work over there. I'm glad to have you on. And actually, you mentioned, I guess, Mr. or Mrs. or Mx Doomberg, however the chicken wants to be gendered. The "Anonymous Doomberg" will be on this show next week, actually.

So, we're excited to have "they" on too, over on the Fatal Conceits Podcast. But you bring up an important note about trust and its erosion there, and I'm wondering how that plays specifically into the work that you do, which as I mentioned is on the short side.

Typically, at least in my living memory, we have this very cheerleading, flag waving commentators or pundits in the mainstream media, and people are probably thinking here of Jim Cramer's cheerleading for Meta all the way into the dirt or teary, misty-eyed people talking about "transitory" inflation or Cathie Wood's Ark Fund or all these buzzwords and buzz concepts.

ESG is another one that comes to mind over in the mainstream news, and it's really not until we see stories of misconduct or outright fraud or corporate malfeasance on the front page of a newspaper that people sit around and scratch their heads and say, "Geez, how did I miss Sam Bankman-Fried?"

"How did I miss the FTX story? How did I miss Enron?" This is going on right under our noses. So, how is this space opening up for folks like you to do the kinds of due diligence under-the-hood work that you're doing?

Edwin Dorsey:So, for a long time, as long as there's been fraud, there's been people highlighting the red flags leading up to the collapse. The problem is they typically haven't had much of a microphone to spread their ideas. So, if you look at the past frauds, I think you mentioned Enron, Jim Chanos, a famous short seller, was pointing out a lot of problems with Enron in the months and years leading up to the collapse.

But it was tough for him to disseminate his ideas, especially when you have this idea of capturing the media, large corporations capturing the media. So, the way that Enron thing came about is Jim Chanos was sharing a lot of information with Bethany McLean who ended up writing a few stories in Fortune.

And then, that shifted the sentiment eventually to where the whole thing imploded. And then, regulators came in after the fact, like financial archeologists to say what went wrong. With Substack and Twitter and this new media landscape, it's a lot easier to highlight the problems earlier, be seen as credible and be heard by people.

So, what I do in my newsletter is I track a lot of resignations, executive resignations. And in the past, four or five board members resigned over a period of two years, many people wouldn't really notice or care. But now, that this information is publicly available and I'm out able to scour the web for it, you can highlight the misconduct and say like, "Hey, there's a really troubling pattern of resignations here."

Then other people can read that and build off of it and go deeper. So, you have this group of hundreds of just investigators on their own sharing information, creating this new ecosystem to identify fraud and root it out earlier.

Joel Bowman:That's a great example of Chanos with Enron and probably, I guess, one of, maybe, if not the most famous short seller of all time. I'm going to get to a couple of his ideas for the year going forward, and I think there's probably a little Venn diagram with some of the sectors that you're also looking at.

But just to back up a little bit, because I think probably most of our listeners and certainly all of yours are going to be very familiar with short selling as a strategy, but I wanted to just peel back a, I guess, a case study of yours that you highlighted in 2021 in your Bear Cave newsletter, just by way of being able to introduce the concept, the work that you do and your due diligence.

And this is, I think it was mid-2021, you wrote an investment note titled Problems at the Joint Corporation, and you were hunting around for these red flags that you just mentioned. It was at the time a rapidly growing chiropractic franchisor. Do you want to talk us through your investigation there and just use it as an example for how you implement this strategy and the things you're looking for?

Edwin Dorsey:Joel, absolutely. So, I'm focused on companies that are misleading investors or harming customers. And I think The Joint is a great example of something doing both. But about a year ago, they were a one and a half billion dollar publicly traded franchisor of chiropractic clinics.

So, they had a few hundred chiropractic clinics across the US. You'd go in. You'd pay $40 for a chiropractic adjustment, and you could enroll in their monthly $80 a month program where you'd get multiple adjustments per month. And Wall Street was loving the model.

The franchise base was growing. The company presented the franchise base as being healthy and earning a lot of money. The financial metrics look good. The stock was up something like 3000% over five years.

Joel Bowman:That's a red flag.

Edwin Dorsey:Everything is going great. And when I start to look at a company, the very first thing I do is I look at the board. I take five minutes to look at the bird's eye view, who are the people on the board and the executive team and what is their history?

And right away, there were some oddities with The Joint. Even though this was a multi-billion dollar publicly traded company, the chairman of their audit committee had previously served on the board of two different penny stocks and that's a big fault.

When you look at a board of eight or 10 people and none have experience on other successful public companies and other experience is with public companies that have failed or gone to zero, it's like that's a screaming, screaming red flag. And a lot of individuals don't look at that.

A lot of even sophisticated investors I don't think put enough weight in that. So, that right away was an issue. They had I think three different CFOs over a period of five years. They had a lot of auditor turnover. A lot of insiders were selling. Now, that's painting a mosaic of potential problems, but that isn't hard evidence and misconduct.

What really determines the value of a business is how they treat their customers and the value they generate for their customers. So, from there, I do what I think I do best, which is start examining consumer complaints. And it can be starting with something as simple as a Google search, look up The Joint consumer reviews.

And with consumer review sites, there's non-credible ones that are paid by companies that only post positive reviews. And then, there's some ones that I think are more intellectually honest like SiteJabber or Trustpilot, and they had hundreds and hundreds of complaints against the company.

So, that's a little problematic. And then, if you want to take that to the next level, what I do is I often go to state regulators and file FOIA requests under the Freedom of Information Act for consumer complaints against a company.

For example, if a company's based in Florida, I might go to the Florida State Attorney General, file written request for all consumer complaints against a company within the last three years. And that might return nothing or one PDF. But occasionally, you'll get hundreds upon hundreds of consumers going to their state AG complaining about fraudulent billing and other issues.

And that's what I saw with The Joint where across all the states they operated in, dozens of customers were writing to their state attorney general saying, "Hey, this company either isn't holding up their end of the bargain. When I go in for services, they have misleading advertising."

Or, most troubling, they're fraudulently billing my credit card. I go in for one adjustment and without my consent, they start billing me $80 a month to be part of their monthly program and I didn't know. And now, I looked at my credit card and I have six months of statements and they won't even give me a refund even though I've never gone there.

And it's like, okay, so now I see why your financial results are great. I can see why Wall Street loves you, but you're not generating real value, you're not helping a society, you're not building a beautiful, vibrant business. It's fake. So, when I saw lots of that, that is a screaming red flag.

I knew I had to write on them, you're really harming consumers. And this revenue you generate, it gets a huge multiple by Wall Street but it's not substantive, it's not economically viable. And so, you look at all that and then I'm good at digging through SEC filings. One of the board members was loaning money to struggling franchisees.

They were playing games. They were disclosing franchise health. But most importantly, you had a lot of consumers saying they were billed without their consent. And this was during COVID. They made it nearly impossible to cancel their monthly subscriptions.

So, if you had a monthly subscription, you couldn't cancel it over the phone or online, you needed to physically drive to one of their locations and fill out a two-page form just to cancel this monthly billing. And then, if the location was closed, you couldn't even cancel.

You could only pause your subscription for a period of three months, then they'd start billing you again. So, this is the importance of what I do versus what maybe a typical Wall Street analyst to look at. A Wall Street analyst will look at the numbers and they'll say, "Oh, it's great retention. Huge lifetime value of a member. Great year-over-year growth. Look at how profitable their franchisees are."

But they won't get down to the individual nitty gritty and understand how those numbers are made, and that's where I spend a lot of time lurking. And in these $1 to $5 billion market cap ranges, there's some ethical actors, there's some amoral actors, and then there's the most egregious ones where their entire value or a lot of their value is built off shady practices.

And those are the ones I try to highlight. And those are the ones that will always eventually fail. They might get a few years runway, but people always find a way to cancel.

Their brand is destroyed. People talk to other people and the word spreads and these businesses always end up collapsing. And if you look at The Joint, I think it's down something like 80%, 85% over the last 16 months. So, how you generate the numbers matters a lot.

Joel Bowman:If you haven't given it a refund in the past two years, maybe it's because you've made it damn near impossible for anybody to get their money back. Not exactly a viable long-term business strategy as you point out. But to go back to something you said at the beginning there, you said that Wall Street were chorusing their appraisers and talking them up.

Why for example, in example after example, I mentioned Cathie Wood's Ark fund. Just a little bit ago, we actually ran a column at Bonner Private Research by Bell back when we just started in December 2021 called Knock on Wood. And we promptly got plenty of hate mail from haters doing exactly what they best, how dare you call... Saint Cathie into question.

But how is it that Wall Street analysts who are supposedly paid to look at the robustness and vitality of businesses so often make these calls at the top and then you see something like Joint Corp or Ark Fund or whatever, dishing back 85%, 90%, 95%.

How is it that they miss these things, which as you're talking your way through there, it seems like the first thing that you would want to look at is customer satisfaction, legitimate retention, corporate balance sheet, health, that stuff?

Edwin Dorsey:So, I would agree with that sentiment. I think a lot of people on Wall Street, they spend a lot of time behind their computers making Excel models. And just even now, it's how good of a modeler you are is almost seen as a proxy for how good of an investor you are, at least at the more entry level stuff.

So, in terms of Wall Street analysts, generally, the people writing research reports for the big banks are aren't seen as the most talented people on the street. If you're really talented, you're going to end up working for a fund. So, in some ways, Wall Street analysts and analysts of Morgan Stanley giving buy and sell ratings, if they're really talented, a fund's going to hire them so they're not going to keep producing research. If they're mediocre, they're probably going to stick around in that role. So, you end up with all the best people leaving and the quality of thought and diligence and research there isn't that great.

I would say numbers are also a lot easier to just think about and quantify. It takes effort to file FOIA request. It's a little difficult to understand which consumer review sites are credible versus non-credible. It's also not super fancy. I found at least talking to a lot of hedge funds, they want to spend $2,000 on expert network calls.

They want somebody with a fancy title to tell them something. They don't want to spend 30 minutes on YouTube watching consumers review a product. Even though I think that's much more helpful and a better way to evaluate companies, it's tough to justify, Hey, investors pay us 2% and a 20% carry and pay us hundreds of millions a year in fees and we're just going to watch YouTube videos-

Joel Bowman:Let's watch YouTube.

Edwin Dorsey:... how they like their products, that's a tougher sell versus "we built sophisticated models and we hire the people from the Harvard MBA track who did two years of great investment banking and know how to model." But there are very talented people on Wall Street and sometimes modeling has value.

The last thing I would say, going to what you said about Cathie Wood is I'd been critical of her funds as well. It seemed like they were very good at picking out general themes and trying to say what are going to be big themes for the next few years, but then very bad is at expressing those themes as investment ideas.

So, they had one investment in a company called Vuzix that makes AR goggles. And their investment was all about how augmented reality is going to be huge, it's going to be a big industry and maybe this company can capture some of that value.

What they didn't realize investing in this company had partnered with somebody who was arrested multiple times in foreign countries. The company had never generated a substantive product that became popular. The company had been around for 30 years and their accomplishments were de minimis.

And when you have that type of management team and that type of culture, things aren't going to switch overnight even if the industry gets hot. So, that's what I would say is Cathie Wood and the Ark's invest's big problem is. They were decent at articulating these themes that came out, but very bad at expressing them in individual stock picking to generate returns.

Joel Bowman:That's a huge distinction, I guess, when the rubber meets the road. So, let's go from 2021 then, and you've put a lot on the table there with regards to how you go about your due diligence in your particular process. Not to be outdone by the former year, 2022 was also a big year for fraud and co-mingling of funds and corporate misconduct.

I think we would be remiss to not mention the FTX shaped elephant in the room. You mentioned Jim Chanos before. I know that he is remaining short companies like Coinbase, like Block, formerly Square, a few other dialings of the mainstream media, Tesla, IBM among them.

To start out with the general and then we can get into some of the specifics that I know that you're looking at, I guess. When the tide goes out, and there's been obviously a big outflow of liquidity from the 2021 highs in the crypto space in general, I guess this is happy fishing for people looking for bad actors and malfeasance and that sort of thing. What's, first of all, your take on where we are in that space and then we can maybe drill into some of the specifics that you're looking at?

Edwin Dorsey:Absolutely, Joel. So, I focus more on publicly traded companies, so it's a little tougher to talk about all the crypto actors. Generally speaking, anytime you've got a lot of free-flowing money and VCs making a lot of investments, easy money could bring out the worst in people.

It makes good people do bad things and bad people do worse things because if you see easy amounts of money, it just appeals to a little bit of the devil and people to try to go get it. In terms of publicly traded companies, which is where I'm a little more comfortable talking, Coinbase is definitely one that seems to have benefited by a lot of this stuff.

I understand the value of Bitcoin. I get it. I'm not invested in it but it's the long tail of cryptocurrencies, where it's not just Bitcoin and Ethereum, there's literally hundreds like Sushi coin and Pancake coin and whatever you want that seem to have really little value or real world like impact, but still tons of market cap and generates tons of trading fees.

So, to talk about Coinbase, a bit like Coinbase's real value hasn't been in just facilitating Bitcoin trading, it's specialized in that really long tail of frivolous, spurious cryptocurrencies that have now deflated because no one wants to buy Dogecoin or Sushi coin or whatever when the enthusiasm's gone and you've seen a lot of fraud root out.

So, that that's one of the many problems facing Coinbase. And I can speak about others if you want, but I'm not hugely bullish on this space or at least the non-Bitcoin stuff.

Joel Bowman:It did seem to those long tail things. There are those taxi driver indicators where you just pick up anecdotally in the ether, or in the air I guess when, for example, you have celebrities every other night on the Jimmy Fallon show talking up their Bored Ape NFT and it going for gazillions of dollars or whatever.

It did seem to have the whiff of peak market or pick your tulips metaphor there. But then, to get specific about this, you've written recently about a few of what might be the knock-on effects in the broader US banking system itself and then you've got a couple of names here. I don't know if you want to mention Silvergate and the like...

But do you want to talk us through how you go from this big pool of receding liquidity and bad smells and then get into particular actors that are raising the red flags for you?

Edwin Dorsey:Joel, absolutely. So, at a high level here, when people think of the crypto ecosystem, they view it as completely separate from the US banking ecosystem. Oh, it's just some of this nonsense happening offshore where young people are gambling money.

There's no way it affects us or real banks, it's just a completely separate thing. That sentiment was echoed by Janet Yellen who in a November 30th like press conference said, and I'm quoting here, "The good piece of an explosion we saw is that it hasn't spilled over to the banking sector. Banking regulators have been very careful about crypto."

And that alarmed me because I have a very different view where the crypto ecosystem is a lot more intertwined with the banking ecosystem than most people realize. I'll give you five examples of how that happens. The first is with deposits.

So, if you look at stablecoins like Tether, and more importantly USDC, which are stablecoins, people give US dollars for these coins that are supposed to be pegged to a dollar. Those companies like the one for USDC has now this $50 billion pile of cash.

And what do they do? They deposit it at financial institutions, US financial institutions. And not the biggest financial institutions because most of them have not been excited to take deposits from crypto companies. They deposit it at smaller financial institutions with Silvergate being one of them.

There's a bank called Citizens Trust Bank, a tiny $60 million publicly traded bank in Atlanta that has a lot of deposits from stablecoins. There's Metropolitan Bank. There's a bunch of these banks in the $50 million to $5 billion market cap range that literally have tens of billions of dollars of deposits from crypto related companies.

And with the crypto industry, if those deposits dry up, those banks could be in trouble because what do banks do? They take deposits and then they loan that money out.

And historically, crypto firms have been a really attractive source of deposits because of their limited banking options, they would deposit money anywhere they could and these banks would literally not pay interest on the deposit. So, you get this huge source of billions and tens of billions of dollars of deposits.

You don't need to pay any interest on them, and you can lend it out to 5% or 6%. It's hugely profitable. It's wonderful until all the deposits go away overnight. And Silvergate has a little bit of that problem. So, that's number one, there's deposits.

Number two, there's a lot of transfers and transactions where in order for money to get onto these crypto platforms and off of these crypto platforms, a bank would need to serve as an intermediary. That bank was often a bank called Silvergate Bank, sometimes a bank called Signature Bank.

But when you're transferring literally trillions of dollars, Silvergate, this tiny bank in California transferred over a trillion dollars of payments onto and off of crypto platforms. Banks are responsible for knowing that the money is going to customers who have been vetted through know your customer compliance and the money isn't used for money laundering or some illicit activity.

And as we're seeing now come out, a lot of times, the activity on these crypto platforms would be money laundering or extortion payments or money laundering for foreign countries under sanctions.

So, there's a lot of legal liability that's going to come from facilitating these trillions of dollars of transactions. And the liability isn't going to be with the big banks who've largely avoided that, it's going to be with smaller banks who participated in this.

The third way the banking system is intertwined with the crypto ecosystem is with loans. So, banks like Provident Bank, a small bank in the Northeast that just decided to pivot fully to the crypto industry. Instead of giving money for mortgages, they started loaning tens of millions of dollars to Bitcoin miners.

Joel Bowman:After almost 200 years in the traditional banking space, I was just reading your report on it of doing the former piled into the latter. I just want to read one. You've really nailed some fantastic insights on this and one of the highlights from a publication that they provided. I'll just highlight this here. I think it underscores precisely what you're saying.

This is the bank problem highlights here, "All deposits held at Bank Prov are fully insured by a combination of the Federal Deposit Insurance Corporation, FDIC and the Depositor's Insurance from DIF. No depositor has ever lost a penny with unlimited deposits backed by DIF."

You go on a little further into the report here and you can see this unraveling almost with every paragraph you're writing here, where one column is stacking up far, far lower than it's corresponding one, on the other side of the ledger. It really actually makes for quite exciting reading. So, with Prov Bank, where are we with them now?

Edwin Dorsey:So, the CEO has just been ousted. It was the CEO's son who was employed to give a lot of these loans to dubious crypto who later defaulted. So, it's a little unclear what's exactly going to happen because they weren't able to file their 10-Q for the quarter ended September 30th.

They've delayed that and that hasn't been filed yet. So, once that gets filed, we'll probably have more information. Right now, I think the stock is down something like 50% over the last six months, so it doesn't look like they're, the bank is going to go under at least right now.

If they do, the FDIC could be on a hook for insuring a lot of deposits and you might see some contagion with the other banks. So, Bank Prov, because if this had gone on for two years and they'd loaned out more of their balance sheet to crypto firms, they might have been in trouble.

But now, it looks like they'll survive but just be taking like $100 million-dollar, $150 million impairment charge on a lot the loans to companies they made in the crypto space.

Joel Bowman:And so, we've got number four and five that you're looking for in crypto here?

Edwin Dorsey:So, deposits one, transfers and transactions two, loans three. Number four, this is small but a lot of these big platforms made investments in small banks. So Nexo, a European crypto platform took us big stake in Summit National Bank, which is this one branch bank in Selma and Idaho.

FTX invested in an, I think it was Moonshine Bank somewhere in the US. A lot of these crypto platforms took over small, not publicly traded banks. And it's not completely clear what they were trying to do there, whether it was accessing lending or accessing creating securitized products.

It's not 100% percent clear how that'll play out, but that's a big question mark. Number five, we just talked about was FDIC insurance where if any one of these banks failed, Provident Banks, Silvergate Bank, Signature Bank or somebody else, the FDIC, which isn't taxpayer funded but it's like government guarantee in the end will need to maybe pay out to depositors and that would become a big scandal.

And then, number six, which is a lot smaller, there's been a lot of companies that generated money in weird ways in this ecosystem. For example, Metropolitan Bank was issuing credit cards for a Singapore crypto company called crypto.com.

And these credit cards were really weird where you need to sign up by depositing a lot of money into their weird cryptocurrency to get the credit card, which would give you special benefits like 8% cash back.

And it was just like this very bizarre thing that I think could result them lot... which generated a lot of affiliate fees and fees for these banks but could end up costing them a lot in litigation for people who lose money on these platforms.

So, I don't think that US banking, as a whole, might not be super effective, but there's a lot of small banks that are going to be over the coming months criticized, fined and hurt by their ties to the crypto banking ecosystem.

Joel Bowman:And how would people... I'm sure a lot of people would be glad to hear that potentially widespread contagion, a Lehman moment or whatever, if you will, is maybe contained just with what we know about the whole FTX fallout so far. But for people that are maybe wondering, "Hmm... I bank with a small regional bank, I wonder if I'm going to be affected?"

Is there any way that they can follow along or what kinds of things should they be looking at with regards to the health of their own bank if they're listening and they're starting to hear familiar names, like the ones appearing on their credit card bills?

Edwin Dorsey:The best thing is if your bank's publicly traded, just read their annual report, that's fair. This is going to sound so simple, but just Googling the bank's name plus crypto or crypto deposits should be fairly easy because it's a small subset of banks here.

And for the banks that were taking a lot of crypto deposits or doing crypto loans, they were promoting it very much publicly in the early days because it was a huge driver. So, if you're concerned about your bank, just reading their annual report that they're publicly traded, reading any disclosures you can find that they're not publicly traded.

And just Googling to see if, hey, are there any press releases that my bank put out in the last two years promoting this type of activity when it was seen as a positive. That's the big things I'd look for.

And what could be problematic is if you're a depositor at a bank that has a huge proportion of their deposits from crypto firms, that's not most banks, it's not going to be like Bank of America. But for some of smaller banks that's the case.

Joel Bowman:I was just getting a flashback. I was trying to have a little look for it in my documents here on one of your research notes. There was a very resounding endorsement for one of the banks that you mentioned until you read the author of the quote was Mr. Sam Bankman-Fried.

And that's one that you want to expunge from your banking website if you've been doing the wrong thing. So, there's another red flag to look for there. Edwin, I've taken a bunch of your time up until now and I'm very thankful and grateful for you spending the past 45 minutes or so with us.

I wanted to just peel back a little bit. We've got 2023 up ahead. We mentioned a couple of mainstream news darling sectors that you would not have wanted to have been part of for the past couple of years while they were being cheerleaded over in the MSM. Are there other sectors that you're looking for just broadly at the moment and what have you got in store for Bear Cave readers for 2023?

Edwin Dorsey:Generally, I look at consumer tech companies in the $1 to $10 billion market cap space, because those companies are understandable. And a lot of times, they can be sleepy, low, short interest names, or no one's really ever scrutinized them. So, that's what I'm looking for.

But that's too general to be like an actionable insight. I've been a huge skeptic of any US listed Chinese company for the longest time. So, those companies have generally performed terribly over the last five years. I think US listed Chinese companies will continue to perform terribly. So, if there's one prediction I'd make, it would be don't get involved with US listed Chinese companies, especially those in the smaller market cap sub $10 billion range.

Joel Bowman:All right, fantastic. Edwin Dorsey, mate, thanks for spending a little time with us today. Listeners can follow Mr. Dorsey's research over at the Bear Cave, check him out on Substack. Also, follow him on Twitter, @StockJabber is the handle. In the meantime, we've got plenty more daily free e letters over at bonoprivateresearch.substack.com.

You can check out the link, I'll put it in the description below. In the meantime, I'm Joel Bowman. Thanks for listening to another episode of the Fatal Conceits Podcast. And Edwin, let's catch up again soon.

Edwin Dorsey:Absolutely. Thanks so much for having me on, Joel.

Joel Bowman:Cheers, mate. Thanks a lot.

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