How Millionaire Investor Timothy Sykes Made $100,000 A Day By Trading Penny Stocks In His Dorm Room
Timothy Sykes doesn’t care if you think he’s a douche. “You’re not suppose to talk about the money you make. You’re suppose to be humble and live quietly. Maybe spend stuff in the background and go to Aspen. I don’t know. I don’t get along with rich people. I never have, I never will,” he explains over the phone.
Timothy Sykes is a legend in the stock trading world. Born in Connecticut, the then-pimple faced investor turned his bar mitzvah money into a multi-million dollar fortune trading stock. He made over a million dollars trading in-between classes at Tulane University, where he graduated in 2003 with a bachelor’s degree in philosophy.
All that unabashed success at a young age, however, has earned him plenty of enemies over the year in the finance community, notoriously people who are quick to criticize his system of doubling down on risky stocks. In March, Bloomberg’s Business Week referred to Sykes a self-titled “douche bag” in a headline. It’s the first “douche” has ever been used in Bloomberg headline history, he tells me.
Sykes is shameless about his success, flashy with his wealth, and unabashed about his self promotion for his system of get-rich-quick stock trading. He toots his own horn about an “anyone can do it” approach to making money trading stocks ad nauseum.
Cash is “kind of like a video game to me,” he says. His Instagram is peppered with aspirational pics of rare sports cars, Gulfstream jets, and exotic destinations, usually beautiful hotels in tropical climates. He flaunts his life across all sorts of media. He’s engaged to professional model Bianca Alexa. It’s a Wolf Of Wall Street-esque Insta follow, minus the white collar crime.
Sykes net-worth comes from his passionate hatred for the conventional investing wisdom. A day trader looking to make money off “a lot of one-night stands,” the words “diverse portfolio” do not exist in his vocabulary. The market is all about risk assessment and going all in or sitting on the sidelines, waiting for the quarterback to bang your girlfriend.
But be warned, he is controversial. His Wikipedia comes with this disclosure that he’s NOT actually a licenses financial adviser, which some people may find easy to forget with his “penny stock advice” marketing schtick.
So what is going on here?
I talked to Timothy Sykes — a self-professed BroBible reader — for a half-hour on the phone recently. Here’s the general gist of his story in his own words, from allegedly making $100,000 in a day in a Tulane dorm room to pissing off the entire crew of a Bravo television series on private yacht.
BroBible: Why penny stocks? What was the draw for you back in the day?
Back in the day when I first got started in 1999, it was really no different than it is today. Penny stocks were and always will be easier because they’re usually companies with just one or two products. One or two press releases can move a stock 50% to 100% in a day. That scares the whole finance world because they’re used to trading stocks like Coca Cola and GE. Maybe in a good year they might make 20% — most mutual funds try to make 10% or 20% a year.
For people with not a lot of money, that’s just irrelevant. I started with $12,000. Even if I started with $1,000 or $50,000, if I make 10% of my money in a year, I’m making a few thousand bucks. By the time I’m Warren Buffett’s age, maybe I’m a millionaire and I can buy a new hip with all my money.
I made millions all within a few years because I’m trading very volatile stocks and I’m learning the indicators that move them up or down very quickly. Part of the hate and why people really distrust penny stocks is because sometimes there’s good news and the stock drops 50% in a day. People will be like “Oh my fucking God… these stocks are crazy.” When you actually look at it, the news probably isn’t actually all that good and it’s just a pump-and-dump like you see in The Wolf Of Wall Street. If you look at the indicators, you can actually predict these 50% collapses, as I’ve done dozens of times. I have three videos on YouTube where I’m making 30%, 40%, or 50% in 30 minutes.
People think it’s impossible, but it is possible. You just have to look.
Psychologically, was the initial draw to investing in these volatile penny stocks getting in on the action of trading? Addiction to the thrill? Or was your #1 goal from the start just to make a lot of money?
I wanted to make money and I wanted action. I started with real stocks. I was invested in Viacom, the Boston Celtics, and the Regis Corporation, which owns Supercuts. I was invested in real companies. For the first month of two, I was all excited. I was a tennis player and I had tommy john surgery — I had two casts on my arms — and I was watching my portfolio move for these real companies. My $12,000 would go to $12,100 to $11,900 to $12,200. I was like watching grass grow.
So I started look at data and noticed that companies who would add DOT COM to their corporate name would double or triple in a day. It didn’t seem to difficult. Back then I didn’t know how to read financial statements, so I was just playing the momentum. That was a game no one really taught — there was no book. I had to teach myself. It was trial and error.
Some days I would make money, some days I would lose. When I was a freshman in college I had a $100,000 day. It was just crazy.
I’ve refined my system because I’ve become much more conservative and risk adverse. Last year I had two $70,000 profit days, but I would bet very, very big compared to my net worth. Now I’m trading with less than 1% of my net worth. I like to teach AND trade, so my energy isn’t as focused on trading like it used to be.
Making that much money in college isn’t exactly a common college experience. What was that like?
I did it early in college. I made over a million dollars my freshman year from my tiny dorm room while I’m also trying to download movies with shitty quality. I was making ten, twenty, thirty, one hundred thousand dollars a day. I’d have five or six or my friends in the room next to me, not really understanding why I was doing so well or understanding my place in history. I would bet them crazy bets like, “I’ll bet you $300 that I can make $10,000 in the next hour.” I’d make like $12,000 trading and then I’d collect like $900 from guys betting them that I could even do it. They wouldn’t believe it, but it was all on the screen on eTrade.
It’s really optimal for trading and going to school because you can schedule your classes at certain times. So you have time in-between classes when you can concentrate on trading. I was going to pledge this fraternity down at Tulane. One of the brothers called me up and was like “Hey pledge… Bring me a dozen eggs right now.” But I was like “Uhhhh…. I’m in the middle of a stock trade.” So I didn’t pledge a fraternity because I failed the tests there.
I took a lot of night classes. I majored in philosophy and hung out with those kids, but they all smoked weed and I didn’t, so I was kind of an outcast. Whatever. I just traded and found my niche there.
BUSY DAY, lost a few thousand bucks this morning with undisciplined trading, made it all back & more in the afternoon, roughly +$3,000 today which is nice but even better because I can make this kind of money from ANYWHERE in the world, like my office view? #bestvacations #wonderful_places #throwbackthursday #jewswithviews #jewbicle
You were making money hand over fist compared to someone working at the book store. Did that make you the bankroll guy for a lot of your friends, then?
Well, I was kind of an outcast, so… I don’t know. I took philosophy because I couldn’t get a grip on all the money I was making. I’m from a middle class background and it was kind of freaking me out when I’m making $20,000 dollars in a day. I didn’t really want to spend that much of it.
When I had my $100,000 day my freshman year, that was just so crazy that I took my entire dorm out to dinner. That was cool, but it was only like $1000 for the whole dorm because no one could order liquor. We were freshman, so like someone snuck in a flask or something. I would splurge every now and then on bars. I can’t tell you how many times I’ve bought the entire bar. Sometimes not the entire bar. I remember one time I was on a road trip to Charlotte, North Carolina and I bought every girl in the bar a shot. I spent like $800 bucks. That was fun.
I would splurge a little bit, but I never really splurged until much later because I wanted to see how far I could take it.
You wanted to build up that asset base. I get it… With trading, it’s not like if you’re a sports star and you get a cash bonus for whatever. For trading, I’m actually using the money, so I don’t want to blow a quarter million dollars on a Lamborghini when that would keep money out of my account. Back then I only had a few million dollars to my name. Now I can buy an entire fleet of Lamborghinis if I want to but it’s not going to influence my trading accounts.
Lunch money + my #RolexDaytona can you guess the value of what I laid out here on the table? I don’t post pictures like this to rub in what I have vs what you don’t have, it’s to inspire you & help you realize I’m not special…if I can make millions of dollars in the stock market, you can too! For example, I made a few hundred bucks today, missing out on a $7,000+ profit had I held my $AXMM short from $1.49…I traded terribly! Yet several of my trading challenge students made thousands today doing far better…I LOVE when my students do better than me! #BestVacations #DailyMotivation #DailyInspiration #StacksOnStacks #LunchMoneyOfAJew A photo posted by Timothy Sykes (@timothysykes) on Mar 23, 2015 at 1:43pm PDT
//platform.instagram.com/en_US/embeds.jsKeep the money to make the money. In this Bloomberg article, you say you “play the role of the rich douchebag.” There’s also a quote from someone else who says you’ve “embraced the douche aesthetic.” What does that mean? What makes you a douchebag in the finance world?
You know… You’re not suppose to talk about the money you make. You’re suppose to be humble and live quietly. Maybe spend stuff in the background and go to Aspen. I don’t know. I don’t get along with rich people. I never have, I never will. They’re all so uptight and scared to lose their money.
I kind of just throw it all out there. I might take out $200 grand from the bank just to have the cash for a photo shoot. I kind of just play with it loosely because it’s kind of a video game to me. I know people who have worked five jobs their entire lives and don’t have $200 grand cash ever. I kind of flaunt it a little bit. But it’s not to say “I have it and you don’t.” One thing that my students understand is that they can have it too with enough study.
Without the money I’m just a regular fucking guy. I’m not that good at math, I’ve done this from a dorm room, I’ve been to a hundred countries, I’ve done this from hotel rooms — all you need is the Internet. You can take it the wrong way and be like “look at this douchebag flaunting his money in his orange Lamborghini.” But the other way to look at it is “Wow, if this guy has it, if I study hard, I can have it too.”
The guy who said that I embrace “the douche aesthetic” was actually my first millionaire student. At first he hated me. He wrote this blog post, which is how I came to find him. It was about how “Timothy Sykes is full of bullshit,” so I went back and forth with him in the comments until he gave me a try. Flash forward four years, he’s a millionaire. He’s one of the moderators in my chatroom. He understood that I’m different from one of these informercial people who show these mansions and cars and just kind of want to rub it in. I want to inspire people. And that’s what it does for my top student.
Is that why you went on the show Below Deck on Bravo?
I don’t mean to come across this way, but I treated six of my top students to this yacht trip on a $12 million yacht. I paid $10,000 for each of them. I made them wear my shirt that says TimothySykes.com so that I could make sure that we were getting some press. In my frugal, Jewish kind of mind I was thinking “OK, this is a lot of money… I might as well try to get some people to my website.” I said some things under my breathe. The TV show used every bad thing that I said. The Internet was barely working. The crew ignored like all of our instructions.
It was still a great time — we went down the slide and had fun for a few days. I made a trade for $70,000 while aboard the yacht, which paid for the entire trip. I was so pumped. I was thinking Bravo was going to show it and that it was going to be a big for my business — people were going to see that even with shitty Wifi you can make money. And they didn’t show the trade at all. When you see me at the end, I’m so happy. But the TV producers were like “look at this rich guy. Wolf of Wall Street. Penny stocks. Let’s make him look like an asshole.”
I was a little disappointed with how it turned out in the show, but I can’t complain. I got a free yacht trip.
I’m a little embarrassed to say that I’ve actually watched that episode before. My reaction was, candidly, “look at this rich stock trading asshole bitching about his Internet connection in the middle of the Caribbean.”
EXACTLY! They framed it a certain way. The Wifi was so shitty, so I had a camera in my face while I’m making the trade. I have my broker on the phone and I’m like “BUY THE SHARES. BUY THE SHARES!!!!” trying to get the order in before the market closed. And the next day, we wake up and the stock did exactly what I wanted it to do. Each of my students made two or three thousand and I made 70. I was so happy, but they just didn’t show any of it.
I guess that’s reality TV — it’s not necessarily reality.
Again, it gets people to hate me. But you hate me until you look to see if there’s something there to work from. So even if you hate me, I don’t mind that — I have pretty thick skin. I don’t care at this point. I’m living the life of my dreams. I just want you to find out about me. Most of my top students actually hate me at first. So then it’s my job to say “Hey, wait… I have your attention, so now let’s see how you can do this.”
What advice would you give to college students who aspire to be on your level?
Really study before you risk any money. You have to learn the chart patterns. You have to see where the angles are. Sometimes I buy stocks, but a lot of the times I’m betting against stocks. You can actually make money when stocks go down, which a lot of people don’t know about. I look at stocks as an effort to grow your account. I don’t buy into the bullshit from mainstream media about how you have to diversify your portfolio and never use too much of your portfolio on one stock. They have a whole system to try to make you 5% – 20% a year. But you as a college student, if you lose some of your money, it’s not the end of the world — you can always fallback on mommy and daddy, you can get a summer job. You have to understand your place in the world and whether or not you can afford to take bigger risks.
My rule #1 is still to cut losses quickly. I’m not saying to bet it all and hope for the best. Don’t put it all on red or black. I’m the biggest coward when I trade ever. But at the same time, if you can afford to take the risk, go out there and do it. Realize that there are some people who are turning a few thousand into a few million. My top student is only 25 and he’s taken $1500 into a $2.5 million over a couple of years. That’s not going to happen to everyone, but it does happen to some. It could be anyone if you’re dedicated and willing to put in the time to study.
So don’t treat stocks like a casino…
The world is risky. Life is risky. Mutual funds drop 50% in a year too. Nothing in finance is as safe as financial advisers want you to believe.
I’m just this crazy motherfucker with an orange Lamborghini living the life that everyone wants. You don’t have to risk anything, but understand that there are success stories my way. You will never, ever turn a few thousand into a few million if you follow stuff on CNBC about diversification and only buy stocks like GE and Microsoft. That’s just not going to make you a millionaire any time soon. If you want the safety, that’s fine. Do it. If you want to be passive and focus on your life and school work and build your little nest egg in the background, that’s fine. But you’ll never go anywhere quickly with that strategy.
I speak to a very small subset of people who have a lot of time on their hands, not a lot of money, and are willing to try new stuff. People who are in the 50s, 60s, or 70s are usually just trying to make their mortgage payments and take care of their families. They’re in a different position than college students. You just have to ask what time it is in your life and if you can afford to take risks and have a family to take care of. I would never tell anyone to get into penny stock trading if you can’t afford your rent and need to take care of a baby.