Penny stocks. We have all heard of them. But very few of us know exactly what they are or where to buy them. The very thought of them conjures up different images for different people. For some its huge wealth and for others its huge risk. For me, its huge spreads. i.e. the costs of trading them are normally so high that it’s just not worth bothering.
Take a look at this article from CNN. Apparently, Tim Grittani turned $1500 into $1 million in just three years (following the strategy of a trader named Tim Sykes) and there’s even a photo of him to prove it. But wait, just one photo? Are we to believe this unbelievable rags to riches story with the evidence of nothing but a picture?
No other verification has been given for this tall story, no brokerage statements no bank statements, nothing. Yet this article has managed to garner 3000 total shares, 1733 comments and it is one of the first hits on Google for the search term ‘Penny Stocks’. God knows how many page hits (and advertising revenue) that is a month…
The photo itself is courtesy of Millionaire Media LLC, which appears to be Sykes’s company, but isn’t it a strange company name for a man who actually is such a successful stock millionaire? Seems rather ‘salesy’ to me.
Is this how to buy penny stocks?
But what is even more irritating is that the article gives absolutely no clue at all as to how to buy penny stocks and how to make money from them. According to the article, Grittani learnt his tactics off the internet from Sykes and succeeded because he put in god knows how many hours every day into learning how to trade.
I’m sorry but isn’t that always the way? That someone got somewhere because they worked hard, harder than anyone else, and because of that we don’t need to explain any more about it or explain how to buy penny stocks? It’s convenient.
The truth is that penny stocks are a losing game most of the time. The spreads are so wide you’re better off going to the casino and playing craps. Unless, of course, you have inside knowledge or an edge that sets you apart. But this article doesn’t tell you any of that, it tells you nothing about how, where or when to buy penny stocks and gives not a shred of information about either of the traders away (a quick search also reveals little apart from some dated looking blogs that looks more like placeholders than anything else); Even if it is true, the success could quite as easily have been down to luck alone. How are we to know based on this factless piece of journalism?
It’s for these reasons that this article should be dismissed, it tells us nothing of use, all it does is generate page views, because, you know, we all love to hear a get rich quick tale that works.
Timothy Sykes could just as easily be Jordan Belfort (wolf of Wall Street), just how are we to know?
Check out the Resources page for a full list of brokers, software, books and blogs.
“But what is even more irritating is that the article gives absolutely no clue at all as to how to buy penny stocks and how to make money from them.”
Come on— do you seriously expect a news article to go into any depth or detail about “how he did it”?
When you see a news article about a newly completed office building, do you expect the article to go into detail about how the foundation hole was dug, how the concrete was poured, how the steel frame was erected, etc., etc.?
There is a considerable amount of information about Sykes available– if you’re not too lazy to look for it and read it. For instance:
https://www.goodetrades.com/2009/08/the-truth-about-tim-sykes-from-a-former-critic/
Hi Carl
You are right. After I wrote this article I did a bit more research about Sykes and found plenty of information available, much of it conflicting. I guess he flew under my radar as I have never been that interested in penny stocks.
I’m still not convinced he is anything more than a good salesman but thanks for the link and comment.
I’ve done a lot of reading about him, mostly out of sheer curiosity, and I’ve watched several of the videos on his web site. He often does come across as a cocky, arrogant twit who is “all talk.” However, Tracy Coenen, a forensic accountant and fraud investigator, became sufficiently convinced that his method works that she signed up for his “millionaire challenge”:
http://www.sequenceinc.com/fraudfiles/2013/04/timothy-sykes-millionaire-trading-challenge/
Also, in my readings, I’ve noticed that the people who disparage Sykes are those who haven’t actually tried his method. Now, I realize that it’s not necessary to try something to know it’s B.S.– for instance, I don’t have to get into an MLM to know that MLMs are B.S.– but when all the criticism is coming from people who haven’t tried his method and from “journalists” who are trying to stir up flak by “proving” he’s a fraud, that’s another thing. Tracy Coenen was contacted by such a “journalist”:
http://www.sequenceinc.com/fraudfiles/2014/03/more-on-the-tim-sykes-millionaire-trading-challenge/
Finally, I have my own method for trading stocks, and from what I can tell, it’s somewhat similar to Tim’s method, except that I don’t do day trading or target penny stocks– although some of my trades have been in penny stocks. My method worked for me, although it would probably horrify a long-term investor like Warren Buffett– so, based on my own experiences, I can see how his method *can* work if one applies it diligently and CAREFULLY and isn’t trying to make a big “killing” or get rich overnight.
Basically it seems Tim Sykes method is if the stock does what you want stay in it, if it does not get out. I can see how this could work over time. There will be losses but small losses. The wins should be bigger than the losses. Take any chart you find, and try it. I tried many charts, it seems to work, but not over night. It takes time. Charts I tried: TSLA, Plug, PAL, LQMT, AAPL, and many more. This seems to work with any price range and any account, but the trading cost can eat you alive, hence the minimum trading account. Now these test do not include shorting, just long positions. This method could be compared to opening a business, if the business is not profitable, close the door and open another one, if that one succeeds, leave it open for as long as it is profitable. Verdict: It works, but why pay for it?
In the interest of fair discussion, here’s a discussion with Tim Sykes on Reddit: http://www.reddit.com/r/IAmA/comments/23og03/i_am_timothy_sykes_ask_me_anything/
Only a photo ?
You can youtube him and see a full audio interview and him speaking at a seminar.
You can see all of his trades from 0 to $2m account here: http://profit.ly/user/kroyrunner
Stop hating, start trading.
Hi Daniel
Thanks for you comment. I would not class profit.ly as a reliable resource as trade results can easily be manipulated. It’s also another one of Sykes’ affiliate products.
Regards
JB
JB,
How much did you spend on college? What is your weekly salary now?
Hi Chris, I’m not sure what the purpose of your question is so I’d prefer not to answer it.
Tim Grittani has an entire blogspot regarding his methods, his trades and some failures, too. I’ve taken the time to review Sykes. I’ve chosen not to sign up with Sykes because, simply, it is not cost-prohibitive. He has a valuable service though his character is often brought to light. His character has nothing to do with an ability to trade well. He even states this very clearly. He just laughs at everyone too shallow to see the difference. He laughs because he’s rich and can do so. That’s why people hate him.
JB looks like you have been trolled by Timmyboys legion of sheep followers. Sykes and his crew are nothing but huckster shills who do not really trade make money off the subs they need to have in order for his front loading schemes to work. Ask any of them for a redacted bróker statement proving how they trade… silence is what you will get.
I think you may be right
this whole post is fucking bullshit! Watch Tim Sykes HTMM 35 hour Dvd then you trolls might learn something.
I wouldn’t watch Tim Sykes for one hour let alone 35. He talks too much 😉