00:00 Speaker A
Do you use AI to help you with DS1?
00:02 Speaker B
So, I haven’t. Um, not really. Uh I’ll sometimes like I’m no, the answer’s no. I I I strongly, strongly, strongly believe in reading these things and looking for something weird and something that’s a little bit off. And and, you know, my work as, you know, I’ve worked mostly most of my investments have been on the long side, but I professionally I’ve done a lot of work as a short seller and you don’t find the weird stuff. It doesn’t jump out at you. The the stuff that’s really revelatory, it’s hidden and hard to find because they want you not to find it.
00:41 Speaker C
a footnote. So you yeah, it’s a it’s a weird footnote, it’s a weird sentence.
00:46 Speaker C
But if you tell the AI, you should try it. You should give it a command and say, look for an irregularity or look for like, give it a command and see what it sends you.
00:56 Speaker B
Yeah, that’s interesting.
00:57 Speaker C
You can read it on your own.
00:59 Speaker B
When you see something, when you see them going through
01:01 Speaker C
You can read it on your own and look for the irregularity. Then let AI see if it finds you irregularity.
01:05 Speaker B
You can do both. Yeah, well, I certainly would do both. But I when you when you read these S1s and and you see a sentence and they’re going through acrobatics not to say something.
01:21 Speaker B
That’s when you find something. I remember reading a a secondary uh thing. It’s when I was a reporter at Bloomberg when an anchor on the show, but it was this company that was doing a secondary and I can’t remember the name, I’ll I’ll be vague about it. But essentially it said that our CEO, uh after some youthful indiscretion, uh went to the University of Idaho and I was like,
01:47 Speaker B
Wait, what? How do they describe him in the S1? So I compare the secondary offering to the S1 and they just described him as being going to the University of Idaho. I’m like, was the youthful indiscretion in the course of the last like four months between these two offerings? So I went they mentioned he went to the University of Idaho, so I just did a Bureau of Prisons search for the guy’s name.
02:08 Speaker B
He’d been in prison. He committed a felony. He was a drug addict who broke into cars and stole a radio and and you know, that was the youthful indiscretion. And I don’t know that AI would have found that or not, but I only found it from reading the the the, you know, the secondary offering memo.
02:20 Speaker C
It’s interesting, you know, if you take that memo, put AI on it now and see what it comes up with. See if it finds, see if it finds that the indiscretion.
02:27 Speaker D
How rare, not rare, but like
02:29 Speaker B
How rare are felons running public companies?
02:31 Speaker D
Yes.
02:32 Speaker B
It’s not it well, it happens. And and and that that is the joy of of being a short seller is uncovering these things, is finding these things that are deep, that are hidden, that are that are that are just, you know, you look for my my old boss at Kings for Capital used to say just pull out if you find a loose thread, just just pull the loose thread. You look for that one thing that’s a little bit off.
02:55 Speaker D
It’s a little similar to that great scene in the big short where I think Michael Barry was reading more back securities and they were like, wait, you read them all?
03:06 Speaker A
Yeah. Yeah. Well, it’s always good to also you would appreciate even to proxy statements. And you scroll down on page 57 and there’s a we spent $500,000 on a private club membership for the CEO and I mean,
03:25 Speaker E
That’s owned by his brother.
03:26 Speaker A
Yeah, yeah, right? I it just says so much about the company’s
03:30 Speaker B
cretion. Yeah.