Investing rules from the King of Short Sellers

From the top 10 list of rules on investing from the King of Short Sellers

Rule 1. Never buy shares with high valuations in relation to tangible net asset value.

Ruel 2. Never short-sell stocks when they are going up.


Rule 7. When a man says that his word is his bond . . .
. . . take his bond.

Rule 8. If you do not understand an investment, prepare to short it.

Rule 9. Borrow [shares for short selling] when others are not borrowing. Repay when others are not.

Interview with the King of Short Sellers

In a next article we will publish an interview with the King of Short Sellers. We will take some questions from readers. Please submit them by sending an email at the address at the end of this post.

Some questions that will be answered:

1. Some deep secrets of King of short sellers.
2. What does it take to be able to walk against the whole crowd.
3. Who taught the king of short sellers?
4. Who is the one trader the king of short sellers never dare to go against, as he always lost whenever he did.
5. Which blogs does he read?
6. His recommendations on real sources to stock market wealth.

King of Short Selling in the News

Simon Cawkwell, nicknamed the 'King of the short sellers' in London, made 250,000 pounds (320,000 euros, 550,000 dollars) in less than an hour this month, by betting on the market when it was down

Some comments in the news about Simon Cawkwell.

Excerpts from Agence France Press:

AS STOCK markets plunge and banks collapse, one man is rubbing his hands with glee.
Simon Cawkwell, nicknamed the 'King of the short sellers' in London, made 250,000 pounds (320,000 euros, 550,000 dollars) in less than an hour this month, by betting on the market when it was down.
'I love a crisis because that's when people are stupid,' he said with a broad grin.
'I've always liked fast-moving markets because the fools make more mistakes so I'm able to profit by it.'
In the sumptuous surroundings of his flat-cum-office in the upmarket London district of South Kensington, Mr Cawkwell gazes at four computer screens filled with stock prices and makes a confident prediction.
'I'll probably make three million pounds profit this year,' he said.
With a personality as big as his considerable frame, 61-year-old Mr Cawkwell is not, by his own admission, a modest man.
'I work on the assumption that I'm intellectually superior to 99 people out of one hundred and I'd give the other man a good run for his money,' he said.
'I think very quickly and carefully. The fools panic and I don't panic.'
Short-selling is typically the term by which investors, often hedge funds, pay a fee to borrow but not buy shares, and then hope to profit from an anticipated fall in prices.
The practice has been blamed for contributing to volatile stock markets.
But when the British authorities banned short-selling on about 30 companies, Mr Cawkwell simply transferred his attention elsewhere.
'I'm still short-selling, on other companies,' he said.
Mr Cawkwell is happy to offer his opinions on the looming recession.
He may be a gambler through and through, but he says even he would never have attempted the 'mad gamble' of the British government over the past decade.
He reserves particular criticism for Prime Minister Gordon Brown's actions in his time as a finance minister, blaming him for making cheap credit too easily available.
'People have been deceived on a massive scale,' he says. 'Mr Brown knew about all of this. It was a mad gamble to keep on expanding credit forever but you cannot expand credit forever.'
He foresees deep problems ahead.
'I expect massive unemployment. There will be deep impoverishment and bankruptcies,' he says.
'I really think it can lead to a civil unrest. It is really very serious, we're talking about people whose lives are shattered.'
But, if the worst comes to pass, Mr Cawkwell can see only one outcome for him personally.
'I shall make a good deal of money,' he says. -- AFP

making money in the stock markets (via shorting selling)

Welcome to the blog of the "The King of Short Sellers". There is an old art known as short selling. In normal investing, you buy first, and sell later. You make a profit is you sell at a higher price. In short selling, you first sell and then buy. You make a profit is at the price at which you buy is lower.



How could one sell something they do not have? Answer: they borrow the stock, sell it, and then returned to their owners when they buy back the stock.



Oh! some people do not even have to borrow a stock before selling it. It is called naked short selling.



The "King of short sellers" Simon Cawkwell made a fortune in just one hour. Nex post will contain article about Simon Cawkwell in the news.

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