'Evil'ways of Simon the amazing chancing bear

FROM a plush office on New York's Park Avenue, controversial share dealer and former chief executive of failed internet company Scoot.com Robert Bonnier has been buying shares in British property company Regus, sending their value up 50% in a week.

From his rented London flat, equally controversial share dealer Simon Cawkwell has been selling Regus shares short as fast as Bonnier can buy them.

Cawkwell is purring with delight as news of Bonnier's interest in Regus emerges. Cawkwell has been selling the shares short for more than 18 months now. He took one load of profit when they were around 6p and is delighted to hear of Bonnier's involvement in the company.

"I think he is mad, a loon," Cawkwell says. "I think Regus will ultimately become insolvent and will disappear. I was most encouraged to learn that it is Bonnier who has been buying. I made a six-figure sum on the collapse of Scoot. I don't find any discomfort in being short on Bonnier."

Or anyone else for that matter. Cawkwell has gained fame and fortune through his uncompromising attitude to selling shares short. At 23 stone, he sits in his Chelsea lair like a gargantuan James Bond villain, swivelling from screen to screen with a "gleeful eye" as he takes in reports of job losses in the City, a fall in business confidence, collapse of property prices, anything that might indicate shares will fall even further than they did last year.

Cawkwell, 56, even has a Bond villain's moniker. He is the selfstyled Evil Knievil, the inveterate bear-raider who first came to prominence predicting the collapse of Maxwell Communication over a 13- month campaign that ended in November 1991 with Robert Maxwell's death and a corporate carnage that even the Evil one hadn't quite envisaged.

SHARE traders who go by such names as the Plumber, the Spaniard, the Commander and even Lil the Lush lurk outside institutions. Cawkwell is perhaps the most interesting of the lot, his Evil persona - he gets upset when it is spelled Evel as in the stunt motorcyclist - invoking fear and loathing in the City.

In person he is sociable, informing an 11.30am visitor that the champagne, vintage Pol Roger, went on ice 15 minutes earlier and should be ready just before lunch. His "secrets" appear on a website, www.t1ps.com, he has published books about his business, the most recent being the modestly titled Evil's Good Book of Boasts, and he dispenses his verdicts on companies he believes to be overvalued with a take-it-or-leave-it attitude. He doesn't care whether you believe anything he says.

There have been complaints about the way he operates, most recently from Nigel Payne, chief executive of internet bookmaker Sportingbet, who claimed in the summer that Cawkwell was spreading malicious rumours about his company in order to depress the price. He reported the trader to the Financial Services Authority. Aside from the issue of spreading malicious rumours - and if guilty of this, he would not be the first in the City - Cawkwell's short-selling methodology seems sound.

He says: "The starting point is balance sheets. Most people can't or won't read balance sheets, which are the key to the strength of a business. The profit-and-loss account is really just an indication of how the directors would like you to think movement has occurred between two specific dates.

"But I have been a practising accountant for over 25 years and it is interesting to me what a person's balance sheet is, what they have got, what their debts are and their capacity to get into trouble and get out of trouble. I see companies in much the same way. I think the balance sheet should always be strong. It reflects the capacity of a company to bat out of trouble. Stocks regress to the norm, they have to. What is the norm? The norm is balance-sheet value - tangible assets less liabilities."

Alongside Regus, another property company he is selling is Kensington, the mortgage lender he first sold at 260p and which now trades around the 162p mark. He tells a telephone caller that because the price had gone up 10p or so from around 152p, it was time to sell again. Cawkwell loves going against daily market trends.

Born in 1946, the son of an Oxford don, he was educated at Rugby School before going into the City as a "pond-life" articled clerk with accountants Coopers. he is an inveterate sports gambler (while we talk, he loses just over pounds 1500 on the 12.45 at Lingfield).

The Maxwell sell was something of an epiphany. Selling the shares short, he netted himself a tidy sum, but perhaps more importantly it gave him a long-term appetite for short-selling, one which has made him a player in the City of literally ample proportions. He says: "I realised three things. One, I enjoyed it because it was colossal fun, a fast-moving game and I enjoy that. "It got me out of financial trouble. I realised I was doing something that other people didn't know how to do properly - and even if they did know, they wouldn't because they were too cowardy-custard." It took a while for the real money to come. By his account, he made on average pounds 100,000 a year during the 1990s but the tech boom, where he bought shares as well as sold short, netted him several million. He declines to say how many. "That would be slightly coarse, but certainly I never have to work again," he says.

On his website he says he made pounds 3.5 million last year.

Cawkwell tends not to indextrade as it is too fickle, but reckons that today's FTSE, at around 3900, is worth in true terms about 2500 - especially if he is right about BAE's position. Cawkwell's day begins at 4.30am when he gets up, unless a hangover detains him, to read the newspapers. He believes that the business pages influence retail traders and that they nearly always overreact to news.

"If there is, for example, a bit of atrocity breaking out, the retail trader will defer purchases or he will accelerate sales and will always take it too far whether the news is good or bad. He will always over-move his position and you can bet against him with some confidence in the market."

Before Christmas he named five companies for punters to sell short - Spectris, Sportingbet, Man Group, Bloomsbury and Kensington. By last week he was comfortably in profit although only two, Kensington and Man Group, had moved significantly. Sportingbet has risen. Cawkwell is, however, a long player, using his balance sheets to assess a company's true worth and then selling shares with icy nerve until he hopes it reaches that position.

Before retiring to lunch where he consumes heart-attack portions of deep-fried spring rolls and prawns washed down with a bottle of white followed by one of red, he says: "One day I will get a kick up the arse because the fact is there will come a point where there is nobody left to sell.

"I am acutely conscious I am exposing myself, by increasing these positions left, right and centre, to extreme risk because when it swings it could cost me millions. The only thing is that I have made millions along the way."

He adds: "My wife says I am one of nature's pessimists. Certainly I am constitutionally and temperamentally well-disposed to expecting things to go wrong, so this game has suited me very well."

The essentials of shorting

SHORT selling is when an investor sells stock he does not own, by "borrowing" it from his broker, with the promise to buy it back later at what he hopes will be a lesser price. For example, if the investor "short sells" stock at 250p and it decreases in value to 150p, he can buy it back at the lesser price - making a profit of 100p, less commissions and fees. Conversely, if he gets it wrong and it rises to 350p, and he is forced to sell at the inflated price, he will lose 100p.

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