Great 45-Minute Penny Stock Podcast To Study Today – Timothy Sykes
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I just rocketed past being up 100% in 2014, or roughly $500,000 in trading profits, in just the first 3.5 months of the year, every trade detailed HERE, I have several trading challenge students getting closer to breaking $1 million in profits and this trader/student of mine has now passed $5 million in profits in 2014 alone!
Yes the markets are on fire, but with stock market days off like we have today, you must hone your craft and study successful traders and their strategies.
I HIGHLY encourage you to listen to this 52-minute interview and below is another great interview I did with Chatting With Champions.
I hope you enjoy this 45-minute podcast interview as much as I did giving it, we have transcribed the whole interview below too for my valued deaf students.
Tyler: Hello, and welcome to the Chatting with Champions Interview
Series. My name is Tyler Basu, I’ll be your host, and I’d like to thank you
for joining me as I interview achievers and entrepreneurs in an effort to
learn more about what it takes to be successful. By asking very specific
questions, I intend to shed some light not just on the results of these
individuals but on the process, the thoughts and the strategies behind
those results. So keep that in mind as you listen to today’s interview,
don’t be afraid to take some notes, and I’ll see you at the top.
Today I have the pleasure of interviewing an incredibly successful stock
trader and entrepreneur, Timothy Sykes. Timothy is the CEO of Millionaire
Media and the author of the best-selling book An American Hedge Fund. At
the age of 22, Timothy became a self-made millionaire when he turned his
$12,415 worth of bar mitzvah gift money into $1.65 million trading penny
stocks while studying at university. Timothy also starred in the hit TV
show Wall Street Warriors and has been featured on CNN, ABC, CBS, CNBC,
Fox, Forbes, Business Week, Market Watch and the New York Times just to
name a few.
So today Timothy works as a financial activist and educator with more than
2,600 students in over 65 countries, and two of his students recently
crossed the one million dollar profit mark. So Timothy, I’m super excited
to have you as a guest on a Chatting with Champions Interview Series, and
I’m just as excited to hear more about your story and the strategy behind
your success.
Timothy: Thanks for having me.
Tyler: No problem. So Timothy, could you start out by just telling the
listeners more about your background, where you grew up, went to school,
and just what you were up to before you got into this whole stock trading
business?
Timothy: Sure. I’m from a small town in Orange, Connecticut. I grew up
middle class, and I played tennis every single day for like ten years. I
actually played too much and I injured my arm senior year of high school,
so I was already into college early admissions so I didn’t really have
anything to do. My parents gave me control of my bar mitzvah gift money,
$12,415. And the stock market was going crazy back in ’99 and 2000 so I
decided to open an account and try my luck at trading. My parents gave me
control of the money thinking that I would lose everything, and instead I
took that $12,000 and turned it into $1.65 million over four years.
Tyler: Wow. So what was it about trading stocks that captured your
interest at the time?
Timothy: I mean, I actually ended up having surgery on my arm so I
didn’t have anything really to do. I couldn’t play tennis; I was already
into college so I didn’t really need to go to class. I was actually
skipping a lot of classes, which I don’t recommend, but I was trading
stocks from the library. I just started making a lot of money. I made
roughly $120,000 senior year of high school, and that was just insane, so I
kept doing it. The first few months of freshman year I made $700,000. I
don’t know if I was lucky or gifted or what, but I just kept doing it
because I kept making money, and I like financial security.
Tyler: Yeah, understandable. How did you first learn to trade? Was
this mostly through trial-and-error? Or did you have any guidance at all
during that period?
Timothy: Yeah, it was all trial-and-error actually. There were no books
on what I trade, which are small cap stocks, the smallest stocks on the
market. I tried trading stocks like at the time it was Netscape and AOL
which are big, but with a small account it didn’t move the needle on my
account very much. I got into much smaller stocks, stocks trading under $5
a share. Still today, there’s nothing. That’s what led me to kind of create
this educational business where I teach my now 4,000-plus students how I
trade. I guess I kind of wrote the book on this.
Tyler: During that time, you were trading stocks that are valued under
$5. I believe those are called penny stocks, correct?
Timothy: Correct. And that’s, you know, been my specialty. I’ve tried
other areas, but for whatever reason this little niche has stuck with me
and I’ve kept doing very well over the years.
Tyler: Awesome. Can you shed some light on the strategy that worked
for you at the time?
Timothy: Sure. At first, I mean, it was a very crazy market in 1999 or
2000 so I would be buying these penny stocks that were hitting new highs
based on just silly news. Back then the Internet was brand new, so when
companies added a dot com to their corporate name, their stocks would
spike. So it became a question of finding the next company that was going
to add dot com to their names, so you could just look and see what
companies were starting websites when they’d register their domains and
chances are they would add the name to their corporate name.
I remember I bought this one company called Sportsman’s Guide. They’d sell
basic camping gear and stuff like that. Not a very exciting business, but
then they added sportsmanguide.com to their name and the stock like tripled
within a couple of days. I did very well with dozens of those plays.
And then after my initial success with those, I had to branch out . . .
sorry about that, I’ve got my puppy here. I had to branch out with other
stocks, but it’s all simple type stuff like that because these penny stocks
move very quickly.
Tyler: So do you think maybe, people use that term the dot com boom
around that time period. Did that have anything to do with your reasoning
for choosing that specific strategy, and do you think that would still work
now?
Timothy: Yeah, it really does because you have all these expensive
Internet companies. Just the other day, What’s App got bought out by
Facebook for $19 billion. So everyone’s looking for smaller plays because
they can’t really afford stocks like Google trading at $1,000 a share.
I wouldn’t say that we’re in a bubble right now, but I would say we’re in a
similar kind of bullish market environment where these Internet companies
and companies with exciting stories are going up much faster than really
anybody expects, so everyone’s looking for smaller versions. That’s why
penny stocks are so hot right now.
Tyler: Okay. So I know your specialty is with penny stocks, but if we
could take a step back for a second, and for those who are unfamiliar with
buying and selling stocks, could you give a brief explanation of how the
stock market works? I mean what are the different types of stocks that are
out there and what are some common strategies that traders use?
Timothy: Sure, you know, there’s a lot of different types of stocks.
Penny stocks get no love because they’re the smallest of the bunch, but
most people who invest, they just buy and hold in good-quality companies
like Google, Coca Cola, Bank of America, GE, and that’s what’s talked about
on financial media all the time. And you can do well. It’s a balloon
market, so the value of these companies rise when more people buy. It’s
very much supply-and-demand so you know, everyone’s buying Coca Cola and
Starbucks and GE and Goldman Sachs, so it’s a bowl market where a rising
tide lifts all boats.
Unfortunately, I don’t think that that’s very good because you don’t grow
your account very much if you have a small account, and the vast majority
of people out there have small accounts. So even if you buy Google, which
is one of the best-performing stocks, you might make 20 or 30 percent on
your money. So if you invest $1,000, next year you might be up to $1,200 or
$1,300.
With penny stocks they move much quicker because they’re small companies.
The tickers and the stocks are trading at $1 a share, so one day a stock
with good news could be trading at $1 a share and then a few days or a few
weeks later it could be at $7 a share.
For example, Plug Power, they make alternative energy systems. They did a
deal with Walmart. I bought the stock at $1.19 a share, and as we’re doing
this interview right now it’s at $7 just a few weeks later. It’s pretty
crazy how quickly penny stocks can move. It’s much more speculative, so
it’s not very well-known, but I think it’s great if you know the rules and
you want to grow your account fast.
Tyler: Okay, so what I’m getting from this is with penny stocks, most
of them are priced very low, like maybe a few cents or a dollar or two, but
the likelihood of them increasing in value by a significant amount is
definitely there.
Timothy: Yeah, I’d agree with that. You know, most people look at them
like lotto tickets though. You buy a lotto ticket for $1 and maybe you’ll
make a million, but the odds aren’t very good. The same kind of odds apply
to penny stocks where I mentioned one stock, Plug Power, that has done
fantastically well, but most penny stocks don’t move that quickly. So the
key to my success has been finding the ones that do move.
You know, when a company like Plug Power or a small company does a deal
with Walmart, that’s big news. That was the catalyst that really got me
saying I think this could keep going. Now they’re doing deals with FedEx.
So when a small company’s technology catches on, it’s no longer going to be
such a penny stock theoretically because now they might become a real big
company.
Tyler: So when you are keeping an eye on these penny stocks that have
the potential to go up in value, what are some of the indicators you look
for when trying to evaluate whether it’s likely to go up or even go down?
Timothy: Yeah, I’m glad you brought that up because a lot of the time I
actually bet on the penny stocks going down which freaks people out because
they’re like “What? How do you make money when the stock goes down?” That’s
a tactic called short-selling. Have you ever heard the phrase “Don’t sell
yourself short?”
Tyler: Yep.
Timothy: You know, like don’t bet against yourself. But in the case of
penny stocks, it’s actually statistically accurate to bet against them
because most of these companies are going to fail. They’re going to go out
of business; they’re going to mess up their deals somehow. It’s more about
trying to see which ones have the greatest potential.
So with a company like Plug Power, and this is just one company that I’ve
just been trading recently so I bring it up, but when a small company with
a speculative technology gets deals with these Fortune 50 companies, that’s
a big boost in confidence. That’s a game-changer. So I really look for
small companies that do deals with big companies.
There’s another company that I’ve been trading, Research Frontiers, REFR. I
don’t have any positions in these stocks right now; I go in and out. These
are kind of the examples that I trade. REFR is the ticker, and they
actually have a very cool technology where they can tint the windows on a
car with the push of a button. Have you ever seen that?
Tyler: No.
Timothy: It’s on the new Mercedes S-class. They did a deal with
Mercedes. So for years they had this technology and everyone was saying
“No, it sounds like science fiction; it’s like a fraud.” Now they do a deal
with Mercedes, and now they’re on three different Mercedes cars and they’re
trying to get deals with BMW and Audi.
I bought when they announced the Mercedes deal and rode the wave, because
when they announce a game-changing deal like that, the stock can go up for
several days, if not weeks. But now we’re still waiting for BMW or Audi
which they’ve teased for a while and they haven’t delivered, so I actually
sold that and got out with a profit.
So I give these penny stocks time to see what they’re capable of, but
unfortunately the majority of the time they let me down. I’m actually
better at short-selling them, and when I short-sell penny stocks, then I
look for stocks that have risen a lot that I think are going to crash.
You’ve heard the adage, or maybe you haven’t, have you heard of “Buy low,
sell high?”
Tyler: Yeah.
Timothy: So short-selling and betting on stocks going down is the exact
same thing as buy low, sell high, just in the reverse-chronological order.
So at first you want to sell high and buy low. So normally you want to buy
a stock like Plug at $1 and sell it at $6. That would be fantastic if you
make six times your money.
But then Plug went up to nearly $10 a share, so some people like to short-
sell Plug. I actually gave as short-sell alert saying I think the stock is
going to come down at $9.80, and now it’s down to the sixes. So if you had
shorted at $9.80 and it’s down to $6, you can still pocket the $3 a share
difference. It’s the same exact thing as if you bought it at $6 and sold it
at $9.80, except just in the reverse order.
Tyler: Now I don’t know how many companies you’re keeping an eye on at
any given time, and maybe it’s a few dozen, maybe it’s a hundred, I don’t
know. But where would you get the information or the update something is
happening with a specific company? How do you find that out?
Timothy: Yeah, I mean there’s thousands of stocks. They all have
exciting stories. The key is whittling that list down to what’s really
actively traded. A lot of penny stocks are just very illiquid meaning that
they only trade like a few hundred shares or a few thousand shares a day.
Not many people actually care to trade them.
So what I’m doing is looking for companies whose stocks are really active.
Plug Power, for example, again, traded 75 million shares today. What does
that mean with a stock trading at $7 a share? That means it traded roughly
$500 million worth of stock, so it’s very, very active. In fact, it’s the
single most active penny stock in the world right now.
When you have that kind of activity, lots of people are going in and out,
and that’s good for trading. My goal for me as a trader and my students as
traders is just to take profits almost every single day, where if you think
Plug is going to go up a dollar a share based on whatever news, try to buy
it at $6 and sell it at $7 and then tomorrow is a new day; you’ve already
locked in profits. So it’s very fast-moving so focus on the biggest percent
winners. Almost every single financial website lists the biggest percent
gainers every single day, and that’s how I find them.
Tyler: Okay. Now I understand that you once started a hedge fund
company. Can you tell me about your experience with transitioning from
being a stock trader to then becoming an entrepreneur? And as the owner of
that company, what were some of the big lessons you learned from that
experience?
Timothy: Yeah, you know, after I had taken the $12,000 into $1.65
million in four years, I was this cocky kid and I thought I could make a
hundred million dollars. I didn’t understand the limitations of penny
stocks. I didn’t understand much about risk. I still managed the number one
short-buy hedge fund for three years. We only had a few million dollars
under management because no one really wanted to give this cocky kid with
this perfect track record a lot of money.
Actually, when I was meeting with a lot of elder investors, they were like,
“We love your strategy, we love your dedication, but you’re just a kid;
you’re not scarred yet.” At the time I was like, “What do these old guys
know? I’m going to make a billion dollars.” I was 23 at the time, far too
young to start a hedge fund on your own. Then I actually invested in my
best friend’s dad’s company. They kind of invented print-at-home ticketing,
which I was dead-on right about the technology, but when you’re right about
the technology it doesn’t mean the company you invested in is going to be
the eventual market leader.
So I got away from my trading, and I was just impatient, really, is what it
comes down to. I was growing my hedge fund by 20 percent per year for 3
years, and I was like come on, this is ridiculous. I want to be big-time.
So I tried to become an investor, fell flat on my face, lost all my
credibility even though it was just a small portion of my fund. Just having
a big public loss was very unsettling. This was right after . . . as a
hedge fund you get graded every single year, but really as a startup hedge
fund the big grade comes after three years. My losses came right after I
had a three-year track record, so it was like at the worst time.
It was a tough lesson because I had to realize what I’m not . . . I make
mistakes. I should stick to trading my penny stocks instead of trying to
invest in family friends’ companies; that was my mistake. Then it killed me
that print-at-home ticketing became such a huge thing. I saw it but I
invested in the wrong company.
And then right as this kind of education was happening to me, I was
featured on this TV show called Wall Street Warriors which is now in I
think 27 or 28 different countries. It was like a reality show that they
featured six different financial people.
Because I was losing at the time, I was just drunk in every episode. It’s
not a good time to have a camera in your face. I just made an ass out of
myself on national TV. But it was entertaining, so a lot of people saw
that. I’ve always been pretty honest about what I do right and what I do
wrong, so I didn’t like hide from the losses or the disappointment, but a
lot of people were still inspired by my overall story, turning a few
thousand into a few million, even if I had some losses and lessons along
the way.
So with that TV show airing and becoming popular, I started getting 20, 50
or 100 emails a day from people saying “I want to trade; I want to do
this.” Some people were trying to tell my rules and I was like no, they
have it all wrong. Within a few weeks I realized there’s a huge opportunity
just to teach people how to trade, because most of the people in my
industry of stock market teachers, they’re not good traders; they’re not
good investors. There’s an adage, “Those who can’t do, teach,” and that
really applies to people in the stock market world and the trading world.
So all I had to do was basically teach what I did right and wrong and just
be honest about everything because there’s a lot of people on the Internet
who claim to make millions of dollars but they can’t back it up. So I
started teaching. I wrote my book, American Hedge Fund, and then I started
writing on my website, timothysykes.com, showing every single trade.
I went back to the initial $12,000 and I said “You know what? I’m going to
take the $12,000 and turn it into $1.65 million again within a few years so
everyone can see.” No one believed me. Everyone was like “Here, you’re
crazy. You were lucky in ’99 and 2000.” But then within three years I had
turned the $12,000 into over $200,000, then things got a little crazy where
I realized now I have a student body of people who want to learn from every
single trade.
So my focus switched from just purely trading for myself to creating video
lessons, webinars, blog posts and just tons of educational content.
Commentary . . . just tons of just content to show people what I’m thinking
and why I’m trading. So I kind of got away from the $12,000 and $1.65
million mark I added to my accounts and already in the first two and a half
months of 2014 I’m up about $430,000. I got away from the small account
because I’m like, “Okay, I’ve proven that I can grow the small account. Now
let me just show you how I can make $5,000 or $10,000 in a day.”
Tyler: Awesome. You definitely have proven yourself both as a stock
trader and as a teacher. Your students are seeing some really impressive
success. What are some common mistakes that you’ve seen maybe yourself and
other stock traders make, and what can they do to avoid making those
mistakes?
Timothy: Rule number one, cut losses quickly. The biggest mistake I had
with my best friend’s dad’s company was I couldn’t cut losses quickly
because it was an investment. It wasn’t an actively-traded penny stock. I
didn’t understand that at the time. Now it actually made me a much wiser
trader and teacher, and the stock market is scary; stock trading is scary;
penny stocks are the scariest, short-selling penny stocks, day-trading
penny stocks.
I do the scariest stuff in the world according to most financial people,
but with rule number one in place of cutting losses quickly, even if I’m
down a few percent like I buy a stock and it doesn’t go up the way I want,
I get out. So I’m wrong 30 percent of the time and it’s okay because my
gains are much bigger.
So I wish not even just if you’re a penny stock trader . . . the one guy
out there who’s a penny stock trader. But if you’re an investor, if you’re
a Forex trader, if you’re a construction worker, if you’re into crazy
relationships with I don’t even know what, just cut losses quickly in life
and you’ll do so much better. Too many people hang on and they’re very
sentimental with their stocks. They’re like, “I’m losing a lot, but I’ve
been with the stock for three years; I might as well give it a few more
months.” They just keep losing and it’s a very slippery slope. If you have
this rule in place, it’s amazing the difference before and after my
students have shown me when they apply this rule.
Tyler: That’s an excellent rule, and it definitely applies to things
outside of stock trading, even relationships.
Timothy: Yeah, exactly. That’s what I . . . where is this conversation
going? But some people are in toxic relationships and they’re like “Oh, I
can’t leave my boyfriend or girlfriend because we’ve been together for so
long. He doesn’t mean to drink; he just has anger issues.” They make
excuses. If you have toxic relationships or investments, you’ve got to cut
the cord and be more positive. That’s what’s really worked.
This morning I was kind of angry because I was down about $11,000 on a
trade. I was like, “Ah, I have to cut losses.” I gradually cut losses, and
I lost $11,000. I was kind of bummed out because it’s a Friday and now I’m
going to be thinking about this loss all weekend. But then middle of the
day I saw a new stock, a coffee stock, and coffee has been rising lately. I
bought the stock, made the $11,000 back, actually made like $13,000, so I
finished up on the day. But more importantly, it was just a great
validation of what I teach where I got out of the stock that wasn’t doing
well. I was wrong; it’s okay. I got into the stock that was doing well and
I was dead-on.
Tyler: Yeah. What do you think it is that separates individuals who
succeed in the stock market versus those who keep trying but it just never
seems to work for them?
Timothy: I think it’s about following rules. You really need to write
down several rules. Cutting losses quickly is rule number one; not taking
two big positions, like I don’t care how good a stock is, never invest all
your money. A lot of people get so excited and they start believing their
own hype. That’s not the way to really manage risk.
So everyone has different rules. I have a list of 200 different rules that
I use, but I narrow it down for my students for like the top ten. If people
follow these rules, let’s just say if you’re getting into a stock trader
and investment . . . for example, right when you make the trader
investment, why don’t you write a target on a piece of paper? Literally
write it out; forget the computer. I like old-school notepads. You can
stick it to your computer or put it in your office and say, “Okay, I bought
this stock at whatever price, and here is the goal. My goal is to make 30
percent on my money. Here is what’s going to happen if the stock doesn’t
work out. I’m going to cut my losses at this point.” So you have your “say
uncle” point.
And if you follow these rules, like if the stock hits your goal, you sell
and take your profits. If the stock hits your stop-loss you sell and you
take your losses. That would save people so much money because they get
into a stock, they get into a trade, it doesn’t go their way and maybe it
turns into an investment. I hate that. I hear this every single day where
they’re like “Ah, I could’ve done this; I could’ve done this.” It’s tough
to go backwards because then you start regretting it. So if you go in with
a plan at first and you stick to the plan, it’s really nice.
Tyler: Some terms that come to mind right now are discipline and lack
of emotion. Would you agree those are pretty important components?
Timothy: Yeah, it’s everything. My success is not about luck at all;
it’s about going in with a plan and following the rules. If I break the
rules, it doesn’t even matter if I win because if I’m not following the
rules, I’m hurting myself. You really have to respect these rules. Almost
every single successful person I know, not just in the stock market, has
specific rules and specific discipline and when they stick to that they do
well.
Tyler: So my next question, I want to learn more about how you
transitioned from trading to teaching. This goes back to after you appeared
on that show and you started getting all these emails and you realized
“Hey, there’s probably a demand here for people who want to learn how to do
this.” Can you share some insights for individuals who have a proven track
record of getting results in some specific area and they want to transition
from doing that to teaching others how to do that? So what are some steps
that you suggest they take?
Timothy: Yeah, you’ve got to be able to show your expertise. You need to
prove why should people listen to you? I was very fortunate when I first
got started teaching, there was a website called Covestor which no longer
does what they used to do but they got into the game to validate different
financial bloggers and their strategies.
As a trader, I could use Covestor to tap into my brokerage account. They
would verify my trades, and they would rank me. You could see who is the
best trader? Who is the best investor? At first, when the platform came
out, when I first started teaching, right around the same time I started
teaching it came out in 2007, there were like 300 or 400 different stock
bloggers and everyone had their little badge. You could see, “Oh, he’s up
five percent today; he’s down two percent today.”
Month-by-month, financial bloggers started taking the badge off because
they weren’t doing well. I kept the badge on and my badge actually got
bigger because I became the number one ranked trader out of 50,000 users on
Covestor. So whatever industry you’re in, if you can get validation and
accreditation that verifies you as someone worth listening to, that is
huge. That is huge. There’s thousands of stock bloggers. Why should they
listen to me? I was on TV. I got drunk on a TV show. Yes, I was a self-made
millionaire but I also lost a third of it.
So I had my positives and negatives but I was willing to show every single
trade and I was ranked very highly. If you have nothing to hide and you are
an expert, it’s okay really even to make enemies as long as you tell the
truth. A lot of people say “Oh, ignore the haters and just be positive.” I
would engage the haters, and I would win every argument because all I did
was tell the truth and they’re thinking I have something to hide; they’re
thinking I have . . . they’re wrong. I can just basically outwit them by
telling the truth.
That was a very nice position because strangely enough on the Internet
negativity spreads faster than positivity. If I brag about a big gain on a
stock, people are like “Oh, he’s just a braggart; it doesn’t really
matter.” But if I have a big loss, like one time I was trading with a fever
and I lost $40,000. I did this whole video last time of how I was an idiot
for even trading because when you have a fever your mind isn’t all there. I
took too big a position, and so the hate spread everywhere that day.
They’re like “Sykes lost $40,000, it’s over! The kid is exposed.”
I took some Nyquil, I got better, and the next day I made back $26,000.
That was right in front of all these new people who began to doubt me, and
they saw it live that I made $26,000 back. I didn’t make back everything;
it took me a few days more to make back everything. But the fact that I
hung in there. So don’t be afraid of showing defeat, because we all have
defeats; we all make mistakes every now and then. But if you’re willing to
share that openly, it actually spreads faster.
Tyler: One of the things that I respect about you a lot, and I’ve been
following your work for almost two years now actually. I’ve seen your posts
online and such. But you’re very transparent. You’re transparent with your
successes and with your failures, and even on your blog show the trades
that you’re involved in. It really shows people that you lead by example is
what I’m getting at.
You mentioned that you made a few enemies along the way. You got some bad
publicity along the way. Why do you think that is? Why do you think people
respond negatively to some of the things that you’ve been going through?
Timothy: Yeah, I mean I can be a little too aggressive, a little too
brash, a little too immature sometimes. I’m willing to admit that now. At
the time, I didn’t realize it. I made enemies. I burned a lot of bridges
that I didn’t necessarily need to. For example, because I short-sell these
penny stocks, a lot of them rise on just ridiculous news.
A lot of the financial media world doesn’t understand penny stocks, so they
take kind of research that is paid for. There are these things called penny
stock promoters like Wolf of Wall Street, and they put out ads to pitch
these terrible companies and they say that these companies are great. I
have real ethical problems with that. I really like exposing these scams.
So when a company like TheStreet.com or The Wall Street Journal
accidentally features one of these scams, I ripped into them and I was not
going to let up.
I probably should’ve handled it a little better. I probably should’ve,
instead of using swear words and put downs, I probably should’ve been like
this is . . . I should’ve been much more rational and been like you’re a
major financial media publication. It’s not your fault; you guys don’t
understand penny stocks. But instead, I just ripped on them and that rubbed
a lot of people the wrong way.
And then also the way that I market, and to be fair I actually deserve
these enemies and I’m proud of it . . . I flash around my money because a
lot of people on the Internet claim to be rich but they don’t back it up.
They’re these marketers who they have these videos and they’re like, “Look
at me. Look at this house and these cars. Do you want this kind of stuff?”
And really they’re renting the cars for the day, they’re renting the house
for the day, and they’re pretending to be wealthy, these people who are
like, “I will teach you to get rich online.”
I was like this is ridiculous. I have to show that I’m actually wealthy,
because it comes down to the fact that yes, I do make money in the stock
market and I want others to be inspired. I live a pretty good life, so I
show my Lamborghini and I show my $40,000 watches. I show my mansions; I
show my $50,000 trips. I rub it in people’s faces not to be a dick about
it, but to actually say “You know what? I’m doing this. I’m just a regular
guy. But because of these rules that I teach, you can do this too if you
learn those rules.” That’s my kind of angle, but a lot of people don’t
want to see the angle; they just see me with my orange Lamborghini and
they’re like “Oh my God, what a douchebag.”
Tyler: I’d like to know a bit more about how you structured the
teaching component of your business. I know the blog is probably the
foundation, right? That’s where people can go to learn about you and learn
about your trading. How else have you structured this part of your business
that’s intended to teach other people how to trade stocks?
Timothy: Yeah, actually, I mean the blog is I would say the least
important. It’s what gets people in the door because they go to
TimothySykes.com and they want to learn about me, but I tell about my
thoughts and I go on rants and I give examples of students, like my top
student who has now turned $1,500 into $1.6 million in three years. I
showcase stories, and blogging, that format is very good for that. It’s
like reading mini-books.
But for teaching, the core of my infrastructure is really video lessons. I
now have over 1,500 five-minute video lessons just teaching everything
about the basics of how I trade and what I do right and what I do wrong,
and that’s complemented by real-time trade alerts, daily watch lists . . .
you mentioned how do you find the right stocks? I tell my subscribers these
are the ten hottest stocks that I’m watching today, and I send that every
night or morning so they’re prepared for the trading day.
Then we also have the chat room. I give weekly webinars for like two hours
where people can ask me questions. Now two of my students who have passed
the million dollars each in profits, they’re also giving weekly webinars.
It’s a full educational framework, because people learn in different ways.
A lot of people learn from video lessons; a lot of people like the Q&A on
webinars; some people don’t care about any of that, they just want to see
my trades in real-time.
I try and just show every single facet of my strategy so no one is
confused. They might not learn as quickly because I have so much content,
but I can’t predict how someone is going to learn. All I can do is show
everything that I’m thinking and try to model that using the Internet.
Tyler: That makes sense. Is there any resource or even a person in
particular that you sometimes learn from or go to when you’re looking for
some information that you don’t necessarily have at the moment?
Timothy: Not really. It sounds bad, but you know, I’ve . . . I mean
literally ever since 1999 I’ve been just an Internet addict. I mean back
then the Internet was slow and as I said I was skipping classes and trading
from the library. Because the Internet was so slow and I had the library
lab to myself, I mean there were like 12 computers lined up and I would
just look at every single . . . I would use every single computer and load
one webpage at a time, so it was like my versions of a multi-screen
monitor.
Tyler: Wow.
Timothy: So I have my whole habit set after 14 years of looking at
webpage after webpage, just news and message boards and chat rooms and
stock screening tools, just everything.
Tyler: Yeah, okay.
Timothy: I wish I had time for a lot of . . . I don’t get to read
anymore; that’s kind of sad. I’m just busy teaching.
Tyler: Fair enough. What are some of the projects that you’re working
on now, and could you maybe share some of your goals for you and for your
students over the next few years?
Timothy: Yeah, I mean a lot of what I did when I first started was can I
create a millionaire from scratch? That’s what I said from the very
beginning. At first I wanted to repeat my feat, and then I realized my
trading wasn’t as important as my students’, so I took some time off from
trading and focused more on teaching. But you know, I still trade. I’m up
88 percent this year, in 2014. I was up 66 percent last year.
But the focus is now going to be how many millionaires can I create?
Because now I have two students over a million dollars in the past few
weeks. I’m looking for more people who are dedicated, and sadly the stock
market confuses a lot of people; a lot of people don’t want to go through
1,500 video lessons.
So I’m scouring the Internet and I’m scouring the world to find more
dedicated students, people who are willing to watch everything. My whole
video lesson content library is 125 hours. I’m going to keep making more
video lessons based on every single trade that I do, good or bad. But it’s
just about finding new ways of teaching. I’m looking for more students, and
more importantly I’m also looking for more traders.
Now on my website, Profitly, it’s basically the framework where we give all
the watch lists and the commentary and the trade alerts and the chat rooms
and the video lessons. Now we have three other traders who also teach their
own successful strategies. There’s this guy named Superman. He and I are
actually speaking at Harvard a month from now, a month and a half from now.
We got an invite to speak at Harvard of all places.
So we’ll do that, and he’s up like $600,000 in the first two and a half
months. He sends me nasty text messages. He’s like “You’re only up $420,000
in two and a half months.” So it’s kind of good to have competition. He’s a
fantastic trader that I’ve known for over a decade. So I’m looking for more
traders who are willing to teach and more students who are willing to
learn. That’s about it.
Tyler: Okay, excellent. Also, Timothy, I’ve got one last question for
you before we wrap up. If you could pass on one piece of advice to the
aspiring stock trader, the aspiring entrepreneur who is listening to this
interview, what would you say to them to help set them up for success and
send them in the right direction?
Timothy: Yeah, you know, I get this question a lot. I would say that to
be truly, truly successful, it’s not just about money. Having financial
security, it’s nice; having millions of dollars in the bank, it’s nice. But
what you really will look back at the end of the day is how many people
have you helped, how you feel about your job, how do you feel about what
you’re spending your time doing every single day? I know a lot of
investment bankers who make a lot more money than I do, and they’re
miserable, because they’re doing the same old stuff for every single year
and they’re basically trapped in their weird New York society. I know a lot
of poor people who are very, very happy and they donate and they spend
their time at soup kitchens and they teach underprivileged kids.
So I really want people not to focus so much about money, and I know this
is kind of weird because I show off my Lamborghini and my watches and stuff
like that, but I do it to really inspire my students because my students
want to be rich. That’s their goal. Everyone has different kinds of
students. If I was a chef, I would post pictures of all the wonderful
creations that I’m working on; I wouldn’t post pictures of my Lamborghini.
So I think that if you’re a teacher or whatever job you have, you really
need to look at the value of what you’re doing and how happy are you doing
it? I really don’t like parents who tell their kids that they have to be
doctors or lawyers to make a lot of money. I don’t like a lot of people who
are just set in their ways and unwilling to change jobs, unwilling to take
a risk, take a leap of faith, and try something that might make them happy.
I know this one architect who left his booming business, he’s also one of
my students, he’s up about $100,000 trading. He left his booming business
as an architect to trade because he only trades part-time and he wants to
trade. So he trades in the morning and then he paints in the afternoon. He
left . . . I don’t know the exact number, but he was doing much more money
as an architect, but he wasn’t happy. So I really think that’s a huge, huge
thing in this world and it doesn’t really get talked about enough because a
lot of people just want to be financially secure and they’re willing to
sacrifice for it.
I would be willing to sacrifice to be happy. I think that’s what you really
have to do. For me, when I help somebody and I change their life with
either money or education . . . some of my people don’t even have enough
money to really trade; they just want to learn about the stock market and
they’re just so painful. That’s what really drives me every single day. I’m
always going to make money. Oh, I’m up $13,000 today; I’m up $5,000; I lost
$11,000 or whatever. There’s always a lot of money going around in my
world. That’s not what drives me. Teaching people, creating millionaires.
How many millionaires can I actually create? That’s not just a sales pitch,
that’s like the truth.
I don’t know what the record is for a teacher creating successful students,
but I want that record, and that’s what I do every single morning. When you
ask what are my newest projects? I’ll try anything. I’m writing a book; I’m
working on a TV show. Maybe that’ll hit home with a lot of people. But
whatever I’m doing, it seems to be working because more and more people are
thanking me and I’m getting more and more students who are banking, so I’m
happy.
Tyler: That’s awesome. You’ve just shared some excellent advice. I’m a
pretty young guy. I’m 24 right now, and there’s a lot of people my age and
younger who are just getting out of school or who are trying to choose what
they want to do, and the big question is how much money will I make if I do
this or how much money will I make if I do that? And for some people,
that’s a deciding factor for them which is unfortunate because what I’m
getting from your message is what young people should be asking is who am I
going to become if I go down this certain path, and am I going to be happy
there?
Timothy: Correct.
Tyler: And then worry about the money afterwards.
Timothy: Yeah, and also, one last thing, I need to point out that even
if you’re in this weird industry like trading penny stocks, if you become
really passionate and you work hard and you become the best at your
industry, you’re going to be fine financially. A lot of people are saying
“Oh, you shouldn’t . . .” Their families, and I have a lot of students,
your family says you shouldn’t get into trading; you should focus on your
financial education. Some people want to become painters, and you shouldn’t
focus on painting because there’s so many starving artists.
If you have that passion and you really want to be the best and you wake up
and your whole life is like oh my God, I just want to do this, I can’t even
think about anything else? Then you have it. You’re going to be fine. So
you don’t have to worry about what other people think, especially if they
don’t have passion. You know, I feel bad for a lot of people. They don’t
know what they want to do; they don’t have passion. So I suggest they go
out and find it, because when you have passion and when you feel that
you’re really doing what you were meant to do? The world is a very, very
different place.
Tyler: Awesome, thank you Timothy. I definitely appreciate your time
today. I appreciate all the advice that you’ve shared and I’m confident
that this interview is going to inspire a lot of people, so thanks again
for doing this interview and I wish you all the best with your endeavors
and with your students as well.
Timothy: Cool. Thanks, man.
Original post:
Great 45-Minute Penny Stock Podcast To Study Today – Timothy Sykes
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