How to Invest and Make Bank in the Stock Market.

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SUMMARY

As entrepreneurs we’re always looking for the different opportunity, that next shiny object. We want to uncover Different ways we can generate more income or additional income in things that we do.

One of the things that kind of taboo these days with the market conditions have been and things like that, is the stock market. You know, and can you really make money in the stock market? My guest on today’s episode is Timothy Sykes. He’s a penny stock trader. He’s been able to take those penny stocks that you hear about, you hear to stay away from, and take his investment and now he’s made over $4.2 million.

As entrepreneurs we’re always looking for the different opportunity … that next shiny object … different ways we can generate more income or additional income in things that we do. Maybe we’re looking to take that first step as an entrepreneur and really get out there.

One of the things that kind of taboo these days with the market conditions have been and things like that, is the stock market. You know, and can you really make money in the stock market? For me when I was a sophomore in high school many years ago I was in an investment challenge and it was sponsored by AT&T and USA Today and there was roughly 25,000 people that were in this competition all across the U.S. And it varied from stock brokers to other high school students to everything else.

And I was fortunate enough to have a investment class in my high school where our teacher taught us the basics of investing and everything else so he encouraged all of us students to enroll in this investment contest. And so, I enrolled in the investment contest and several of my other classmates did as well.

And they gave us a $200,000 fictitious money account but we traded stock in real time. Not that our trades moved the market but whatever the market conditions were at that time with that stock is what we bought the stock or sold the stock at. It ran for 90 days and so we traded stock day in and day out and we’re on the phones and at our high school there really wasn’t a cell phone back in the day so we’d run over to the payphone, dial up on the 800 number on the payphone to make the stock trade to buy or sell and that was how we did it.

For me it was really cool to learn and understand and gain that experience. I was able to take my $200,000 account and turn it into roughly $2.5 million in a matter of those 90 days. I ended up placing first out of all the 25,000 people that were in there and I was able … got written up in all of these papers and everything else but … it was really cool. So that got myself on the road like man this is really cool. I want to start learning how to trade more and investing and everything else.

My senior year I re-enrolled in the same investment challenge. I ended up placing 2nd in the United States out of probably 30 or 40,000 people at that time that were in the competition. Then over the years I started to learn as I was a senior in high school I was like I really need to start learning about option trading and so I started trading options and investing small amounts of money trading stock option whether the stock was going to go up that day or whether the stock was going to go down that day. Through that I was able to start making some money that way. Over the years I had invested money and then when I sold my company in 1997 I had taken all those proceeds out and invested it in the market.

Then when the whole internet boom was coming online and I started … moved a lot of my portfolio into the dot coms at the time and the portfolio was up and I was making money and I leveraged my portfolio and had to go buy more money. So they basically gave me a margin on everything that of … a line of credit on everything that had gone up. I bought more stuff. Almost doubled down if you’re out at the casinos. Then all of the sudden it crashed and the market came down. I had to pay back the money that I borrowed against all the other money that I was up. So after paying all that back and having an 8 figure portfolio I was down to the few 100,000 dollars left again. So I was like man what am I going to do.

Since then other than some other investments I have invested in, I’ve kind of stayed away from the market. So I kind of shied away from that. Doing a lot of research and starting to learn more about the market and where we can start to position ourself these days is a big avenue. There’s real estate we can invest in. The stock market. Our businesses. Our businesses are an investment. But how can you take yourself and put yourself in the stock market, start to learn it and start to understand it and being able to trade and make money today? That’s a really good question is you see online and you’re watching the business channel, CNBC. Maybe you’re watching Jim Cramer or the morning shows. And it’s like okay I see what they’re talking about. I see what they’re doing but how can I get in and make money when Apple is 6, 7, $800. Or Google $1000 and things … How can I buy one that like half a share maybe I can buy or two shares. That’s not going to make me any money.

Where can I start to invest my money? You can invest it in stock options. So you’re making a bet on a stock. Is it going to go a certain direction? Up or down. You’re able to buy those for 50 cents and pennies, option contracts. But without knowing enough about it you can also lose a lot of money. So that risk is higher there as well. What we have to really do is when we’re starting to learn about something new is find a mentor. Find a coach. Somebody that can teach us something about this to really understand how the stock market can help us as well as start to find in the stock market those trading systems and those trading strategies that certain stocks portray. Whether it’s looking to invest in penny stocks to stock options. Even other stocks that are in the market place but they may be more within our range around the 5 or 10 or 20 or $50 range. And start to create a portfolio for yourself in the investment arena.

I am super excited today. We have Timothy Sykes, self made multi-millionaire stock trader, entrepreneur, social media sensation, who turned his bar mitzvah money of $12,000 into more than $1.65 million. He traded penny stocks from his dorm room. Mr. Sykes was named Traders Monthly Top 30 Under 30 and also started a hit TV show called Wall Street Warriors. As well as he teaches and coaches several thousand students on how to trade and become millionaires following his strategy. Welcome Timothy to Making Bank.

Tim:                Thanks for having me. Call me Tim.

Josh:               Tim. Awesome, I’m excited to have you here today. What made you just really want to start in trading.

Tim:                So I was a tennis player in high school and I got injured. I got surgery on my arm. I’m walking around, I was already into college. Early admissions senior year of high school. Walking around with two casts on my arm like Robo Cop and I had nothing to do so my parents gave me control of my bar mitzvah gift money. $12,000 roughly. They thought I would lose it all. They thought it would be like tough love like okay now you’ll learn the value of a dollar. After senior year of high school I turned the 12,000 into over 100,000. By they end of the freshman year it was over 800,000. So I screwed up all their plans but for me, a middle class kid, it was crazy.

Josh:               Why’d you pick stock trading?

Tim:                Frankly I couldn’t do that much with two arms … literally I had … they took something out of my right arm and put it in my left arm. It was Tommy John surgery. So I couldn’t do that much. But I could type. So I had to do something with a computer. This was 1999 the stock market was going crazy. It all came together. That’s what got me in and once you make that kind of money as a high school student or freshman it’s kind of tough to do anything else.

Josh:               No that’s awesome. When I was in high school as well I was in an investment challenge and it was sponsored by AT&T and USA Today and they’d give you a fictitious $200,000 to start with but turned it into several million dollars and ended up winning the competition. So it was really cool.

Tim:                You could’ve been somebody! You could’ve been a contender!

Josh:               A contender for it. So I’ve always loved trading so that’s why I was so excited today to be able to bring you on the show and really be able to provide to our audience different paths and different ways for them as entrepreneurs or business people to generate extra revenue. And I know your focus is more on the penny stock trading and instead of just trading the normal stocks or options and things like that why’d you specifically focus on penny stocks?

Tim:                They’re very under followed. It’s kind of a niche. CNBC, Bloomberg, TheStreet.com, no one covers it. So it’s kind of like this wild west atmosphere. Most people think penny stocks are all scams. They’re unpredictable. They move randomly. I find very similar patterns year in year out. The same patterns that made me money back in 1999, 2000, still exist today. So when I see these predictable patterns it’s so much easier than guessing Starbucks, Facebook, GE, Bank of America. I don’t know which companies are going to do well or not and even if they do do well the stock might go up 20% for the year. These penny stocks move 20% in an hour. Or 200% in a day. So you have extreme volatility and if you follow the patterns and the rules you can use it to your advantage. It’s really ideal for small accounts. Like I can’t do my strategy if I had 50 million. So it’s not for a lot of Wall Streeters. Which is good. I compete against little traders all over the world.

Josh:               Awesome. What is the average trade? You said it’s not that 50 million accounts. A few thousand? So could a normal guy get involved?

Tim:                Yeah, well this is what my top students have learned. People are like Tim you have a thousand students why do you only have a few millionaires? Most of my students start with 1000, 2000, $3000. My top student started with 1,500, 4 years ago. He’s at 2.7 million now. So in the real world 2.7 million, it buys a lot. It’s not like amazing. But to go from 1,500 to 2.7 million in 4 years. You can’t do that anywhere else. It’s strategy. So he’s making 2000, 3000, 5000 here or there, locking in profits, moving on to the next. And that’s what I do. This morning I made a trade. I’m up 1,500 for the day. I’ve already made millions but every now and then there’s little opportunities like that.

Josh:               So then your systems that you’ve created look for these predictable strategies and it allows you then to make those trades throughout the day.

Tim:                Yeah I wait for the right patterns. So I like to bet against pump and dumps. You ever seen The Wolf of Wall Street?

Josh:               Yes.

Tim:                So everyone’s like oh you make money off penny stocks, you’re the wolf of Wall Street. No I actually go the other way because most of those scams are scams. It’s just a question of when they’re going to be exposed, not if. So I’m waiting day by day for signs that this pump and dump might be over. Because there’s boiler rooms and telemarketers and emails being sent out promoting the stock, being pushed up. But that’s only for a small time period until the insiders can get out. Then it’s over and then the stock crashes. Did you see Boiler Room?

Josh:               Boiler Room. Yeah.

Tim:                Yeah. So that was the predecessor. So once the insiders have sold all the stock there’s no more promotion and they fall out of the sky. So it’s just a waiting game. And that’s pretty simple. I don’t have to know how to read balance sheets or anything. I’m not good at math. It’s just pattern recognition.

Josh:               How do you figure out and separate, hey this one is going to happen or this one is actually a good company and we’re not even going to see … it’s just going to grow as a penny stock.

Tim:                So sometimes I actually do buy penny stocks when they report good earnings or do big licensing deals. Like a lot of these companies have miracle technologies and they never pan out. But every now and then this small company will actually sign a deal with Apple or Cisco and put out a press release. And the beautiful is because penny stocks are under followed, it takes 2, 3, 4, 5 days before the press picks up on these little deals. And because I’m always looking to see what’s the next hot stock I find it on day 1 or day 2 and the press picks it up on day 3, day 4.

Josh:               And you’re already investing.

Tim:                Exactly. So there’s a big inefficiency. That’s all I’m doing is profiting from inefficiencies. I’m not guessing on the value of the company. It’s informational inefficiency. And frankly anybody can do that.

Josh:               That’s really cool because it gives myself or anybody that’s kind of just that normal guy to be able to go out and say hey I have $500 or $1000 and be able to start trading the market without having to buy Google at $1000 …

Tim:                Yeah buy like 2.1 shares like …

Josh:               Right.

Tim:                You know, I buy 1000 shares and sometimes I make 50 cents or $1 a share on a small stock in a day. So I make 1000, 2000. My average profit is only 2000 bucks. But I’ve made 4 million, $5 million now over the years so it adds up. And now I teach it.

Josh:               Wow. So with that few thousand you’re not looking for that $10,000 or $20,000 …

Tim:                Every now and then it happens. I’ve had a few hundred thousand dollar days. One year as a freshman in college I was so cocky and I would invest nearly everything and one day I made 120,000 in one day, and I was a freshman. I was a virgin. I couldn’t get into bars. I was this skinny little pimple faced kid and I’m making 6 figures in a day. I took my whole dorm out to dinner. It was only 800 bucks because no one could drink. We were all freshman. It was crazy. That’s the kind of stuff that’s possible with this.

Josh:               Awesome. When we come back after our break here I’d love to know a little bit more about some strategies and things that we can teach our audience that they could pick up on. I am Josh Felber. You are watching Making Bank on the Whatever It Ta …

Welcome back. Josh Felber. You’re watching Making Bank on the Whatever It Takes network. We’ve been speaking with Timothy Sykes on how he parlayed his bar mitzvah money into over $1.65 million as well as over now $4.3 million trading in penny stocks. So when we come back here we want to start to just talk a little bit about how we can provide our audience with some awesome success strategies that they can take and start to implement. I know we were talking a little bit here while we were on break and some of the things that you put in place or that you tried to do … we’ve learned about, you take your profit and you get out right away. I know from my investment, parts that I’ve been able to trade and learn from … do you set times where you get out? Do you say hey I want to be out at this price and have it automatically do it for you? How do you know when to do it and then how to set your timing up?

Tim:                Yeah, I don’t set auto trades. I like watching everything myself. I don’t even trade on my phone because I don’t want to risk hitting the wrong number. It’s a fat finger mistake. It’s happened before. Sometimes I meant to buy like 10,000 shares and I buy like 100,000 shares. It’s a very different thing.

Josh:               Bad mistake.

Tim:                So I trade very carefully and I always set goals going into my trade and your audience can do the exact same. When you’re going to do a trade don’t just be like oh I think this is a good company, I think this is a bad company, let’s see what happens. That’s what too many people do. Go in with a very specific plan.

Josh:               Okay.

Tim:                I say this is why it’s very difficult for me to lose. I say okay if I’m wrong, and I’m wrong roughly 30% of the time, I’m not right all the time, but when I lose I want to lose small. So I try and lose less than 2% of my money on any investment. So if I’m wrong for whatever reason I lose my 2%, maybe sometimes 1%. But if I’m right I made 10, 20, 30%. So I’m always trying to win more than I lose, win more often than I lose. But sticking to that goal. Sticking to the … no matter what happens I lose 2%. Sometimes I lose 2% and then it comes back and I took the loss for no reason. But I always protect myself just in case. Because anything can happen in the markets and I know too many traders who lose … 90 to 95% of traders fail … lose everything. So it’s a very tough industry so I have to protect my blindside and that’s why I cut loses quickly. That’s rule number 1 that I teach.

Josh:               Awesome. We’ve seen the crash of 2001 and 2008. What do you do to make money in that when that happens.

Tim:                1999, 2000, I was only buying stocks. I didn’t know about short sale. 2001, 2002, there was nothing really to buy because my patterns were all about buying stocks as they were hitting new highs like breakouts. There was nothing and I was like oh my god like is it over? So I learned short selling and that means where a stock is high and you short sell it and you bet that it goes low. Have you ever heard don’t sell yourself short? Don’t underestimate yourself. Well I do like to short sell stocks because a lot of them are scams like we see in Wolf of Wall Street and Boiler Room and it’s not a question of if. It’s a question of when.

So for me 2001, 2002, was a great year. I made another million, another 800,000 to be exact, short selling. So I just flipped the exact same patterns that I’m looking at and now I do both. Now I go long or I go short and that’s the best way to be. It’s tough to go back and forth. Most people want to only be bullish. They’re like, bull market! Some crazy sort seller are like America’s all manipulated. We’re all … and they’ll only bet against stocks and I’m like I just want to make profits okay? There’s a lot a scams and there’s a lot of good companies so I try and buy the breakouts when they’re having good relationships or good earnings announced. And I try and short sell the scams when they start busting. Right now as we film this, JIDG is a $9 billion company, no revenues, one employee, nothing. And it’s been pumped up by promotional mailers and boiler rooms from $2 to $9 a share. Today is the first down day I bet against it in the 7s and I think it’s going to crash so remember JIDG. Look at it one month from now. I don’t think it’s going to be a $9 billion company anymore. It’s bullshit. It’s all bullshit.

Josh:               With one employee.

Tim:                One employee and he actually runs an MLM in China. Forbes just did an exposé about an hour ago. So I beat Forbes to the exposé. It wasn’t tough. I didn’t expose it. I didn’t do a whole research report but I had them watching it go from 2 to 9 in a few days. I found shares to short. I’m shorting in the 7s. It’s now in the 6s but I want to cover my short at lower prices and lock in a few thousand dollars.

Josh:               That’s awesome. Makes it sound so simple.

Tim:                This is after years and years of finding out what works and what doesn’t work. There are tons of advanced analytics and you’re like oh the … people that track elephant tracks in Africa, they use the moon and they use different dates and the Mayans … There’s all sorts of crazy stuff regarding the stock market. I just like to keep it simple. If a company is small, penny stock has good, positive news that’s actually being noticed by the market. But here’s another thing, a lot of these small companies announce big news and you’re like why is this stock not moving? This is amazing. I don’t look to find stocks at first. I want to piggy back an initial ride. So I want the stock to spike on the news at first, this is very important. Because all these penny stocks are all hype. They want to announce everything and they try and mislead but if there’s already trading volume and the stock is already spiking then a lot of traders are already recognizing that this news is important.

So just the same thing with JIDG. I’ve been watching it as a scam for, I don’t know, a week now but it has been going up every day. I don’t touch it. Today is the first down day. Just a little crash.

Josh:               So you watch for that little bit of down.

Tim:                Yeah, exactly. So on the way up I look for that little piggy back and then on the way down, same thing. And that little stutter step is very important to my success.

Josh:               Wow that’s awesome. It makes total sense. And I think if people sit down and they try to learn and start learning those systems and really start to figure out and understand you go in with a playbook like you said and map out exactly what you want to do, more people could probably be successful with this.

Tim:                Yeah you have to treat it like a business. Too many people, especially trading penny stocks, you have degenerate gamblers who play Keno at casinos. Keno you have like a 30, 35% win rate. It’s like the worst odds game in the entire thing. Why are you playing Keno? Everything in a casino. Even the slot machines. At best you’re going to have a 40, 45%. My win rate is 73%. I don’t provide free drinks. I don’t have shows but I win and that’s the difference. You have to learn patterns where you win 73, 75, 80% of the time like some of my students do. Not Keno or Jim Cramer on CNBC. He has a 40% win rate. Darren’s exposed him.

Josh:               Did they? I was wondering what it’s been. I’ve always watched him.

Tim:                But he’s very entertaining. Buy, buy, buy. Sell, sell, sell. Full of shit, shit, shit.

Josh:               And you got you at a 73% so you can’t beat that.

Tim:                It’s not as scalable. No one really wants to trade … why does this kid want to trade scams? Like let me trade Starbucks. There’s no glamour. It’s just money. It’s just profits and that’s glamour to me. That’s why I got into stock trading. Because I made money. I didn’t get into stock trading … I wasn’t a little kid being like I want to be a penny stock trader. I wanted to be a hedge fund manager. I wanted to actually be a Wall Street guy.

Josh:               Sure. Not now.

Tim:                This is my destiny. I’ve never had any teachers so everything I’ve learned is trial and error and now thanks to that TV show Wall Street Warriors, it’s in 22 countries, everyone started emailing me saying how do I learn? I want to do this. At the time I was up, when we were filming it, I think I was up like 2.2 million. So I’ve made a few million since. But I noticed that a lot of people wanted to learn and I knew I made so many bone headed mistakes at first so my whole goal is to be the mentor to people that I never had. That’s my job. Whenever somebody emails me I’m like what can I do to help this guy? And that’s what I do.

Josh:               Awesome. With your systems where can people go? How can they say hey are you open all the time to training people? Do you kind of close it off? Where can they go find out more about learning from you?

Tim:                So I have a millionaire challenge where me and and several of my millionaire students we also give live webinars every week. I’m very fortunate that my top students want to give back. Some people just want to make money and then they’re done. But they’re very public. They want to pay it forward. Awesome. That’s my millionaire challenge. That you have to apply for. We don’t accept everybody. Timothysykes.com is my blog. 8,000 plus blog posts. You can learn a ton there. My best free resource is my YouTube channel. I have 400 plus free videos just on the basics and different stocks and different examples. I have close mentorship where I answer Q and A and do live training webinars. That’s the challenge. Or I have free videos. So however anybody wants to learn I’m pretty open. I love teaching this stuff and really fighting the trend, damn the man mentality that people shouldn’t trade penny stocks. I think they’re easier and more predictable once you cut through the BS and the hype.

Josh:               I think that’s really awesome that you’ve been able to clear that path and be able to start to expose and provide an opportunity.

Tim:                It’s a tough path. They have a very negative stigma in society because of the Wolf of Wall Street. It was a huge hit. But if you actually look at the particulars, there’s opportunity for people with small accounts and that’s all I want to show.

Josh:               Cool. So how’d you get to be this big internet sensation? You’re always on Instagram and …

Tim:                What I’ve also learned … I adapt. I do trial and errors. So at first I was doing all these video of stocks and posting like amazing stock charts. I think stock charts are beautiful. I’m like look at this beauty. Oh my god! I post it up on my wall. That really didn’t inspire a lot of other people to learn. I was kind of just crazy. So I started posting pictures of my life. I live a pretty good life because I don’t just do it for the money. This isn’t like a video game for me. I actually spend the money that I make. I enjoy life. I think that’s what you should do. It’s financial freedom. So I post pictures of my Lamborghini and my trips and my villas and my jet skis and my kind of crazy life. And people seem to love that. And that’s taken off with the pictures and the videos. Instagram I just crossed 300,000 followers. That was cool. Daily Mail labeled me the Wolf of Instagram.

So I went to one of my top student’s wedding a few nights ago. Mark Crook. He’s up 500,000. He started with 50,000 so he had decent savings. But he was in Texas working in a cubicle hating his job. He learned my strategy. Watched every single one of my videos. He actually tagged everyone of my videos. I didn’t even do that. He categorized them. I went to his wedding because he moved to Miami, met the love of his life and I love it. The reason why I’m saying this is because everyone at the wedding knew me because I’m basically the guy who helped him get out of his funk. And they were all like hello wolf. And they went up to my fiance, they’re like so you’re the woman who tamed the wolf. This Rabbi went up to my dad and was like so you’re the father of the wolf. So I guess the wolf of Instagram is sticking.

Jordan Belfort is the wolf of Wall Street. He scammed people with penny stocks. He’s a career criminal. I am a career teacher. Even though I trade penny stocks it’s very different but I’ll take it. Once you start seeing my videos, I’m not being like buy, buy, buy this stock! This is an amazing technology! I’m like okay if I do buy a stock I think it could spike 20, 30% and then I’ll take my profits. It’s very reasonable. But it fights everyone, what they think about penny stocks. It’s going to be awhile but I keep doing it.

Josh:               That’s really cool. I’m glad you were able to come in today. Be on Making Bank. Being able to share your information. Hopefully you inspired some people out there to take that next step. If you’ve been on the fence about trading stocks go check out Tim’s information. He’s going to teach you. He’s got tons of free resources to help you out there, take that next step to start learning the systems and everything. So I really appreciate you coming on.

Tim:    Tell them don’t quit their jobs to be like oh I want to quit … Mark Crook quit his job as a accountant but that was after he had made 150 or 200,000. He was like okay I have 3 or 4 years of earnings now. And now he’s up over 400,000. But don’t just quit. Try and like study in your part time study at night. That’s why I have all these free videos and people seem to love them

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