On this week's Stansberry Investor Hour, Dan and Corey welcome Edwin Dorsey back to the show. Edwin is the founder and editor of The Bear Cave newsletter, in which he conducts deep, investigative analyses of public companies for his 80,000-plus subscribers.

Edwin kicks things off by discussing The Bear Cave and his extensive work exposing corporate misconduct. He says, currently, his favorite companies to find for shorting purposes are those that are going to be hurt by technological innovations. Edwin gives education-support company Chegg as one example of a business that has already been disrupted by AI and has been employing questionable cancellation practices. And he discusses the growing market for lab-grown diamonds and how that will harm traditional retailers such as Signet Jewelers...

In 2022, [diamond prices] hit an all-time peak... Now [diamond prices are] really starting to free-fall. So when lab-grown becomes the standard and becomes endlessly cheap and... you can buy them online or at Walmart or anywhere, then that's going to put pressure on the price of natural diamonds... Signet, I think on all ends, is going to be hurt.

Next, Edwin talks about QMMM, a U.S.-listed Chinese company whose stock is being manipulated by overseas groups. He goes in depth on the manipulation tactics these groups use on social media to pump and dump shares of unprofitable companies, why it's so difficult to pinpoint the scammers and investors running this dark network, the investigative research he's doing to stay up to date on the scams, and how crowdsourcing from the community has helped increase awareness...

I estimate this is over $10 billion a year going from U.S. investors... to overseas stock scammers... These [scams] are so profitable, and all they need to do is just seem legitimate. So this whole dynamic people kind of have of, "Scammers are going to try to get me to transfer money to them" – that's kind of outdated. Now it's like they can just get the money by convincing you to invest in a Nasdaq stock that's going to fall 95% in a day. It's really funny how much it has evolved and how bad regulators have been at stopping it.

Finally, Edwin warns listeners that the overseas scammers will often engage in after-hours market manipulation, so the best time to short the companies is intraday. He further advises listeners not to take large positions because there is so much volatility in these scam companies. This leads to a conversation about why Edwin has never criticized electric-vehicle maker Tesla in his newsletter, the legendary saga of Netflix ex-CEO Reed Hastings responding publicly to short seller Whitney Tilson, and which sectors Edwin believes will be hardest hit by AI...

I looked at the earnings-call transcripts for a lot of major public companies and they all said call centers... [are] going to be a point of cost savings for us because we can use AI automation to get rid of a lot of the manpower there. I think it's something that's going to take maybe a year or two to play out, but I would not want to be long.

Click on the image below to watch the video interview with Edwin right now. For the full audio, including Dan and Corey's post-interview thoughts, click "Listen" above.

(Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Shortly before graduating from Stanford University in 2020 with a degree in economics, Edwin Dorsey started a newsletter on Substack called The Bear Cave. He quickly gained a following and boasts more than 83,000 subscribers today. His newsletter focuses on corporate misconduct that he believes is misleading investors or harming customers. Unlike many others in the industry, Edwin doesn't make specific recommendations against any company he writes up. Rather, he just informs his subscribers and lets them use that knowledge to make their own investment decisions.