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December 13, 2022

Episode 156 – Simon Ree – The Tao of Trading

“If people approached trading the same way they would a job – you show up, you be consistent, you do a good job – there is a strong expectation that you’re going to get a regular paycheque from the market.” – Simon Ree


 
  • [02:08] Patrick introduces his next TEDM guest, Simon Ree.
  • [03:22] Simon and Patrick get rollin’! Simon explains when and why his fascination with the stock market began, how he got his professional start once out of university and where that has led him right up to today. His focus has changed somewhat, which better aligns with the contribution he prefers to make.
  • [08:25] Patrick notes, the title of Simon’s book isn’t a natural fit for the subject matter! Simon shares first how the title came to be, and second his desire to make a book about options trading that is accessible, engaging, and light. Simon’s book folds in topics like mindset, risk management and planning which provides more breadth and depth to help people get their business off the ground.
  • [12:03] Emotional control and the right mindset are the final frontier of trading and investing in Simon’s view. In a market, that’s designed to have people do the wrong thing at the wrong time, it’s fundamental when remembering how markets cycle.
  • [14:54] Simon talks about decision making in the stock market, whether this platform is better for intuition or research, plus the framework he provides in his book and why it’s so important, especially when emotions threaten to overtake.
  • [17:56] Simon shares his viewpoint on the current state of North American markets, central banks, and the economy of the past few years. Simon also describes his response to the narrative and questions especially when people ask, “what should I do with my money?” by exploring fixed vs. growth mindset.
  • [24:39] At a tumultuous time like the present, it’s tempting to pull our cards off the table, but Patrick and Simon discuss the importance of understanding investing and markets (be it real estate or stocks) at just such a time, to capitalize and even profit from the opportunities that do exist.
  • [28:15] Simon shares his definition of a trader and an investor, which is a little different, and explains what sort of commodities he invests in both short and long term.
  • [31:04] Simon addresses one of the five big myths of Wall Street: 10% per annum is a fantastic return. He goes on to explain that where we are in the season of our life, will certainly inform our trading decisions. We need to do the research and show up consistently to see the returns.
  • [35:00] In response to questions about his outlook on the next five years, Simon shares his “headlight theory of capital allocation.” He expands on that to explain what it means in practice.
  • [40:20] Although he considers himself an entrepreneur by default, Simon’s real passion is not in business or even running a business. It’s teaching. From martial arts to investing, seeing that lightbulb go on for someone when they “get it” is one of the most rewarding experiences for Simon.
  • [43:35] Is it the same thread that binds Simon’s interest in martial arts with his interest in the stock market? He describes his start in judo as a kid and his fascination with and attraction to the career path he chose.
  • [46:42] Simon gives his take and on the relatively new space of social investing and online commission-free investing platforms, along with some of the realities and a word of advice.
  • [49:53] After losing a “life-changing sum of money” in 2008, Simon changed course in pursuit of a better way. He moved away from fundamental investing to learn about swing trading which is the foundation of how he trades today. Simon identifies a couple of mistakes he commonly observes in swing trading.
  • [53:00] Simon runs us through a quick example of how he would structure a trading plan.
  • [54:20] From a personal standpoint, Simon shares how he views the world and how things appear to be changing going forward.
  • [59:37] Swing trading aside as a way of generating revenue, how is Simon guiding his clients and students overall?
  • [61:40] Patrick and Simon briefly discuss the potential for the United States losing its reserve currency status and whether it affects what Simon is currently doing.
  • [62:45] Lightening things up a bit with a rapid-fire run: his most impactful book and recommended book; favourite inspirational quote; iPhone or Android; favourite band and the soundtrack of his youth; favourite movie; message at the pearly gates; favourite swear word.
  • [66:00] Simon’s gratitude.
  • [66:31] Where can you find Simon and his book in the online world? Plus a special offer for TEDM listeners.

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