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When the markets are plunging you tend to read quite a bit about Evil Knievil in the press. Every graduate trainee journalist wants to know what the UK’s best known short seller has to say. When markets are rising as they are now, he tends to fade from view somewhat. Of course you can get the greatest shorting opportunities when folks lose sense of reality in a bull market. But you can also do your conkers as folks can stay mad and shares can defy gravity for quite a while. So if you have not heard from the Great Bear for a while, fear not he will be back.
Evil Knievil acquired that moniker during his shorting of Maxwell Communications. The great socialist newspaper proprietor tried to silence his critics with lawyers letters (something all liars attempt) and so when sending out faxes to explain to dumb City analysts why the sums did not add up Cawkwell signed off as Evil Knievel. The publisher of his first book did not wish to get into trouble with the motorbike rider so made that Knievil. It stuck. Call up Simon Cawkwell and you just ask for Evil.
Like myself Cawkwell’s father was an academic. A distinguished one to boot. George Cawkwell was also an international sportsman (Scotland, rugby). His 23 stone son is no sportsman and no academic – he failed to get into Cambridge. That is not to say that he is not clever, just that he was never suited to the world of academia. Cawkwell trained as an accountant instead.
Although he still practices, for many years he has made a living from the markets. His ruin (other than eating and drinking far too much) is that he is a self-confessed gambler. You see that as he bets heavily on horses, football, Eurovision, indeed anything. Whilst he knows about horses his knowledge of soccer (to him, the plebs game) is miniscule. What he knows about Eurovision and popular music could be written on the head of a pin. But Cawkwell has a strange circle of friends who tip him off and it appears that one of them is a Eurovision expert.
It is the desire for a “tip” that can lead to some of Evil’s spectacular failures – an investment made after a company chat or because a pal says “they are going up.” His other weakness is that while he can be persuaded that he is wrong by a reasoned argument he cannot be persuaded merely by a fact that a position is running against him. Hence the £3 million loss on shorting Regus – a lesser man who have cut his losses far earlier.
Cawkwell’s big wins come when he combines his analytical skills with those of others and arrives at a reasoned conclusive case AND when he senses that the market mood is running his way. He called gold stocks well on the uptick from the early 2000s. His reasoning was correct and his analysis of likely winners was generally correct.
My big campaign with him was on 3DM, a truly bent little AIM company which was indeed censured by AIM twice for not being exactly truthful about what was going on. Originally Evil was long of 3DM as a mate had told him a good yarn. But once Evil had the wool pulled from his eyes (by the razor sharp Lucian Miers profiled here) he turned his brain to the bear case with a vengeance. Several of us worked together on that one – Evil is at his best when he can talk through ideas and share thoughts with others.
The man is ruthless. He will talk his own book and if he thinks a firm is going bust he will go short, say why he is short and look to hoover up. He likes making money and sees nothing unethical in doing that via shorting. He needs to make money simply to cover the odd margin call that always seems to go against him. I understand that he is (unwisely- as I explain here) long of Ruspetro (LSE:RPO) and that must be hurting right now
Is shorting unethical? Cawkwell does not claim that it is. He is out to make money and will do so by going long or short as he sees fit. But, correctly, he points out that there are teams of highly paid City folk hired by companies to pump and promote. It does no harm for investors to hear a counter view. And who better to give that view than a man who is unbelievably politically incorrect, to the right of Attila the Hun and does not care what people say about him. Cawkwell is uncontrollable. Having to edit his articles, that makes him a pain in the arse to deal with. Watching him in full flow is, however, a delight. When he has the bit between his teeth there is no stopping him.
So what are Evil’s current thoughts and positions? The odd thing is that by default he is an equity bull. That is because he, like me, sees bonds as a bubble. His big shorts are the UK 10 year Gilt and the 15 or 30 year US Treasury T-Bond (Evil seems a bit muddled about what the actual term is). Interest rates have to go up. Thus bonds will dive. And that suggests a big switch in terms of asset allocation into equities which means that EK (and I) see shares going up even though many are overvalued.
What is Evil long of? Avesco ( LSE:AVS) is a long time “special situation” favourite and he still regards that as amazingly cheap. On the short tack we discussed WANdisco (LSE:WAND). He is not short but he notes the argument HERE that it could be cheap on a 3 figure 2014 PE. He says that pro tem he is dissuaded from going short. He does , however remain short of Range Resources (LSE:RRL). But generally he seems to be biding his time on equities as he awaits the great bond crash of 2013. In fact his great interest this morning was a huge plate of scrambled eggs. Mrs Evil ( known by Evil as “pussy” but by others as a long suffering saint) does prepare, I am told, scrambled eggs from heaven.
Evil Knievil will be doing a main stage presentation with Lucian Miers (compared by me) at the UK Investor Show on April 13th. Other big name speakers include Nick Leslau, Nigel Wray, Mark Slater, Dominic Frisbey, Nigel Farage MEP, Christopher Booker, Amanda Van Dyke, Roger Lawson ( see video here) and Mike Hall. There are also 80 companies attending to present.
Tickets are now almost 50% allocated. For more details of the show and to reserve your FREE ticket go to www.UKInvestorShow.com
I’m having problems shorting stocks since the new rules came into effect in November. I’ve been told by my CFD/Spreadbetting company that they need to borrow the stock before I can short as there is now a financial penallty on the settlement date is delivery isn’t made…
Your home really should be what you want it to be. I could never live like that, but its what you guys want and that’s wonderful. You can use your money in other areas that benefit you more. I spend more money on my house, but its where I want to spend it. Of course I have to say, I could never afford the size house I have now if I lived in Santa Cruz! But your home should be exactly what you want it to be and its sounds like you guys are plenty happy with what you have.
Did Cawkwell report Quindell to the FCA for not complying with regulatory reqs as reported in the Telegraph and if so, where is the prrof, or is he just regurgitation Gothams lies?
Shameful shorting of Quindell, a growing British Company creating jobs and paying tax.
Co-ordinated shortselling is illegal of course……….