Simon the Trader

Simon is an English entrepreneur who has developed a straight forward, no nonsense, common sense approach to trading the financial markets.  This is the culmination of well over 25 years of study, research and unconventional thinking combined with hundreds of thousands spent to unlock the secrets that will elude most people their entire lives.

Today he implements his unique strategy via Hedgehog, a private fund originally established for friends and family.  His success, particularly throughout a period where the performance of most investments has been catastrophic, has been catching the attention of an ever widening circle.  Not surprising perhaps.  Consequently Simon has slowly been coaxed out from his semi-retired, semi-reclusive lifestyle with his family in the rolling countryside of South East England, to share his unique insights in various ways.

These include:

• Occasional live events for the most dedicated and discerning of traders
• Shorter webinars aimed at helping traders of varied experience
• Trade advisory services to provide traders with profitable trades to take while they gain the experience to find their own trades
• …and the biggie!  Coming soon later in 2011 – an online trading university bringing together the trading secrets of several of the worlds top traders and all delivered via video coaching at a time and place of your choosing!
• even less frequent workshops designed for the most dedicated investors.

Simon’s Earlier Career

But it hasn’t always been this way…

• Simon is an engineer by training, holding a Masters degree from London University and having worked for a BOC group precision engineering company. Interestingly a well known investment bank recently completed a 20 year study and concluded that their future graduate recruitment should focus on engineers “because they look at things differently, tend to think in a more structured way and have the highest levels of discipline”.

• Much of his career however was spent working in management consultancy initially for PA Consulting Group, Cleveland Consulting Associates and ultimately for PSM Consulting Services which was a business grown by Simon and two other partners, who were all close friends when working at PA Consulting in the 1980s. Throughout this time he worked with many well known multinational businesses helping them to improve performance and profitability as well as providing essential advice and coaching to smaller businesses and start-up ventures.

• Simon has always had an entrepreneurial flair and has owned and run several other businesses including an engineering company (in which he lost money) and his family retail business (in which he made money) as well as having a strong interest in investments and the markets since early teenage which is where his quest to unravel their secrets first began.

Simon the Online Business Coach

More recently Simon has applied his general business and management consultancy experience to the modern internet age.  During this time he has applied time proven business techniques to several new online business startups – with dramatic effect.

As someone who admits to being slow to get around to exploring the potential of the internet, Simon has applied his experience to this new business environment.  He has built several internet businesses completely from scratch.  Against the odds every single one of these has been profitable, some to a spectacular degree.

This hobby has now become much more serious and Simon has agreed to share much of his experience with other would be online entrepreneurs in the years to come.  For someone who was planning to have a quiet life with his family after a hectic early career, Simon suddenly finds himself in great demand again.  Oh well, there is no escape when you have entrepreneurial blood!

Simon’s Trading Philosophy

Simon’s work is all based upon the simple fact that markets only move as a result of the interaction of supply and demand.  When buyers outweigh sellers a market moves up, when sellers outweigh buyers a market moves down. He quickly concluded therefore that the only thing that matters is understanding this balance and measuring it.  Beyond this everything else is irrelevant in terms of calling the direction of the market.

Of course being consistently profitable requires a bit more than just knowing the direction as supply and demand can change quite quickly.  Nevertheless knowing the market’s next direction is the most fundamental and critical aspect of profiting in the markets and Simon’s strategies call the markets direction with an unprecedented degree of accuracy.

As Simon explains if you focus purely on supply and demand, rather than all the fancy valuation models and crystal ball gazing hocus pocus, not only are you working with the true drivers of market movement but also all (freely traded) markets suddenly become as readable as each other.  It makes no difference at all whether you are looking at stocks, bonds, currencies, commodities, real estate or any other market for that matter.  No longer do you have to be a gold expert, or a Swiss franc expert or a London housing expert, you simply become an expert at observing supply and demand and reacting to its changes.

This is both a paradigm shift and a revelation that has stunned many people who have followed Simon’s work over recent years.  Just look as these outstanding examples that Simon has shared with his friends and members in recent years.

The British Pound

On 9^th August 2008 this email was sent to Simon’s fund members and the red arrow on the following chart shows exactly when this was and the price referred to in the email.

In May 2009 readers of “Simon Says” as well as fund members were advised that the Pound was set to rally, which it dutifully did without hesitation.  The same audience was also tipped off that the move was over in August 2009.  These two blog articles are still on this site exactly as published at the time.

The Stock Market

In October 2007 Simon’s model was giving sell signals and he concluded it was time to cash in the chips and stay out of the stock market for the foreseeable future.  With hindsight (when everything is so obvious of course) his only regret was not going short at this time.  However the main thing was not remaining long or initiating long positions whilst the market was potentially starting to form a top, which of course it subsequently did.

Members read this warning and the precise details of the sell signal (which we cannot reproduce here as this is confidential) in their newsletter which was received on 1^st November 2007.  Here are two extracts from that newsletter:

The newsletter went on to put this exit signal into longer term context as follows.

Finally let’s see what unfolded in this market from that point onwards.  This longer term chart shows the positions of points A and D on the first chart along with a red arrow showing the release date of the newsletter:

The Property Market

In January 2007 Simon ran a workshop in London for a number of friends and fund members.  During the morning the group spent some time examining the 1929 stock market crash.  Simon guided them through a post mortem of the whole affair including an evaluation of the supply and demand dynamics preceding this historic event.

Right at the end of this session, Simon pointed out that the property market at the time of the workshop exhibited the same structure as the 1929 stock market.  Simon is no property expert and made that very clear, but there was no escaping the fact that the market was setup ready for a fall.

“I’m not saying it will definitely fall, but it certainly is primed and ready.  Just like the 1929 stock market all it will take is some small catalyst to trigger it and boom it will be off!”

Several people found that idea so ludicrous that they actually laughed.  What a crazy idea that the insatiable property market would do anything other than continue rising.  They weren’t laughing a few months later.

“The property market is particularly vulnerable during a decline.  In most other markets a mouse click is all it takes to sell and there is always someone willing to buy from you.  Property is different because when prices turn down the volume evaporates – no one will buy from you.  If you are forced to sell the lack of liquidity means the price you will get will be just miserable and such low priced transactions themselves exacerbate the decline and the market feeds on itself.  It is the time it takes to sell that makes this so precarious, so just beware.”

Despite the initial laughter at least two people did go off and do their own homework and sold investment properties that summer into the last flurry of desperate buyers that finally exhausted all remaining demand – then boom!