How's Tim Sykes making more money selling alerts than trading?

E

elitetradesman

His Wiki page says:

He currently generates the majority of his income through his stock alert service, TimAlerts and several instructional DVD packages.
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I realize that his Startup hedgefund closed shortly after he was featured on Wall Street Warriors, but he was ranked top on Covestor in 2010. You can make only so much money selling alerts and DVD's. How is it possible to make more selling alerts than trading when you're a top trader? :confused: Doesn't he run a hedge fund? If not, wouldn't a hedge fund want to hire him right away?

If it is that he wants to be his own boss and doesn't want all the hassle with running a hedge fund anymore, then he should have enough capital to trade for a living than selling alerts because his hedge fund only lost one third of its value when it closed.
 
Marketers have always made
More money than traders except in the rarest if circumstances. Tim is one smart guy.

By the way, his strategy isn't scalable hence no big money interest.
 
His strategy isn't the most scalable one since it involves more thinly-traded stocks which can be difficult to locate shares to short sell. It's best used for smaller-sized accounts so isn't as attractive for hedge funds or those with large accounts. Also he is a very gifted marketer.
 
quick summary:

-> he trades pink sheet stocks. you know, the market where quotes aren't guaranteed to be filled, shorts are insanely difficult without the right brokerages. so in some regards, for others, it's similar to paper trading because they can't get the same fills even if they tried.

in fact, his latest list of trades has 20 trades. 11 of them are pink sheet stocks. the rest of the stocks, the legit names - have floats of 4mm, 7mm, 6mm, 12mm, and not available (according to yahoo finance).

general strategies for marketers who want to generate subscriptions:

-> don't trade a lot. goal is NOT to make tons of money, but to have "right" trades.

-> take credit for stocks that have lots of movement AFTER you exit, and even claim you're not that good a trader as your students. that way, you get all the "reward" of a huge move without the risk of it damaging your p&l.

-> say things about how much more money you'd have made if you took on a large position, but you're a scaredy-cat.

-> after you've gotten a bunch of subscribers, your alerts will become self-fulfilling. you get in at the price, and then lots of others lift the offer (or hit the bid) all at once. if it's CSCO, it won't affect the price much. if it's a small-cap or micro cap, you've already got yourself a profitable position. in fact, you can make the excuse 15 minutes later that the trade went so well for you, you can't turn down a quick profit, and get out.

-> many of his DVDs have 3/4 or more of virtually identical information, which is the tim sykes story.

i don't follow him anymore (this was the first time i went to his website, a cached version from a couple days ago, in i have no idea how long), but used to follow what he did so i could explain to others the fallacies in some of his trading materials.

btw, he's gone back on a bunch of his initial stated claims for what his site would be, but that shouldn't come as a surprise to anyone on ET.
 
FYI, there is a review of his strategy here:
http://www.cxoadvisory.com/short-selling/timothy-sykes-penny-stock-pump-and-dump-detective/

In summary, evidence from simple tests on available data supports a belief that Timothy Sykes can identify pump-and-dump patterns in real time with economically meaningful consistency, but scalability is multiply constrained such that his subscribers may not be able to mimic his trades reliably. Niche constraints may preclude exploitation by large traders, a large group of small traders and funds.
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First, dont bag him, he is making money, over several years.

Second, his trading profits are very much smaller than his DVD sales.

Third, His account is $500,000 plus and trading penny stocks is a hard way to make money for the time put in for an account that size.

If you have over $200k, trading penny stocks like he does is a lot of work for your return. Position trading is best if you know how ?

If you have $50k, then his style is warranted, and thats his market. Fair enough!

His methods require that you be married to the screen.

One day Tim will work out that turning a $1 million into $2 million via penny stocks trading is too hard and he will have research companies and commodities plays just like the big boys.

Good luck to him...
 
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