Timothy Sykes has carved out an incredibly lucrative niche in the penny stock newsletter industry by combining strong opinions, the lure of riches and marketing bravado.  When you review his resume further, you quickly find out that he has become, foremost an educator.

During the height of the dot-com bubble, Sykes was able to turn $15,000 into $1.65 million dollars by shorting overvalued internet stocks.   What he didn’t realize at that time, like many other traders during the late’90ss, was that he was at the right place at the right time.   As he himself wrote in his self published book, An American Hedge Fund: “I was about to discover I was in the perfect place with the perfect naiveté at the perfect time in stock market history,”

Riding on his success, Sykes opened his own hedge fund which he was forced to shut down in 2007 after losing a third of his investors money.

Undeterred, he started offering free advice on internet forums.  His intentions were noble; to expose suspect companies trying to get rich off investors through the use of celebrity endorsements and slick marketing.  By exposing the truth, he gained a tremendous amount of credibility.  Unfortunately, he had to close this venture down due to the legal costs responding to cease and desist letters and the lack of a successful way to monetize the venture.  Although a great service to investors, it wasn’t worth losing money on.

The marketing lessons he learned through his exposes did not go to waste.  They became his greatest asset.  Sykes leveraged the marketing tactics he had learned exposing suspect companies to his own advantage.  Through outrageous advertising, strong bravado and a dividing personality he quickly made millions teaching others how to trade penny stocks.  While his original trading ideas were hard to implement due to rules changes, he was able to apply other learned trading strategies to penny stocks and teach them to others.

A couple of highlights:

Timothy Sykes highlights the outliers among his students – those few that have made a lot of money using his trading strategies.  He does not share statistics on how many of his clients lose money nor provide a list of all his trades (that we could find).

He says he has made $4,000,000 trading penny stocks but does not disclose how much he has lost on trades or provide evidence of net trading profits from his account.   It could be like the friend that tells you they won $500 on the slot machines over the weekend but don’t mention the $1,000 they lost the week before.

Timothy Sykes has become, first and foremost, an educator.

Read his disclaimer carefully (the one that pops up on EVERY page of his website for legal reasons).  His publication is for education, an information service only.

Penny Stocks are among the most speculative of all investments.  The market tends to attract gamblers, dreamers wanting to get rich with very little money – a lottery ticket of sorts.  Timothy Sykes has been there, understands the market and is there to teach those that want to learn.  Just beware of the associated risks.