Name

Class
Professor

Breakout: Hitting All-Time Highs

There are a plethora of stock gurus, flyers, and spam emails continuously circulating and

advertising dead stock. This gives consumers false hope that the stock would “go up into the

sky in the next few days” but most of them end up losing everything, and costing them

hundreds or even millions of dollars. Even though there have been more failing stories, a young

brilliant day trader, Timothy Sykes, was able to find success. Sykes considered himself to

possess no extraordinary talent overcame the odds and became a multi-millionaire by the age

of twenty-two. Sykes earned his millions by working hard and his pure interest in stock trading.

He was once introduced in the “Young Money” magazine as one of the young individual with

huge success in stock trading.

Figure 1 Front cover of "Young Money" magazine

very successful and attributed the need of vast amount of funds from wealthy investors while

following all the industry regulation. He then could not avoid the inevitable and ended up

closing his fund since he knew that even by borrowing money or combine fund with another

fund would be too risky and could end up losing everything. Even after the closing of his fund,

he continued to tell people that being the head of hedge fund could be a great profession.

Sykes said, “Hedge fund represents the very definition of entrepreneurship and the American

dream. If he wins, he is richer, and if he loses, he is wiser, if anyone could afford to play, it really

is a great profession.” [ CITATION Tim08 \l 1033 ]

Timothy Sykes began his financial journey in the early 1998 when he was 17 years old

while attending high school as a junior after he received his $12,000 bar mitzvah gift. Many kids

would spend their bar mitzvah money on cars other useless thing Sykes said, but he decided to

make a bet with himself that he would exponentiate his money by investing in penny stocks.

Penny stocks are any stock with price below or a little over $5 per share which is affordable to

most of the middle class or lower class.

Before he purchased his very first stock, Sykes had already looked over hundreds of

stock trends and did his research on the “potential buy” stocks. He missed nearly all of his

classes to put his strategy all together. He went as far as taking over a row of computers in the

school library so that he could monitor several stock prices at once. Sykes surprised himself

when he was able to double his money in six months by merely catching up with the stock that

had a positive trend and dramatic increased in trading volume. However, his parents thought

that he was just getting lucky and were afraid that he would get in over his head with all the
money that he made, so they advised him to tone down with the trading and concentrate in

college research.

After he got into Tufts University with $25,000 in his pocket, he start trading again in his

dormitory, and he found his way in technology-related companies that would helped him break

over 6 digits in his account.

During the transition between year 1999 to 2000, technology development was

progressing and the “dot –com bubble” started to accumulate. Almost all the

internet/technology related fields were soaring rapidly, and Sykes had already flooded his

portfolio with technology and internet IPO, a company’s first offer to sell stock to the public. By

the beginning of November of 1999, Sykes had clear $100,000 mark and averaging $2000 to

$3000 daily gain and he continue purchasing internet and technology stocks by applying his

strategy, which focused on stock with medium-size gains rather than the largest daily

percentage gain. Sykes’ strategy was based on pattern analysis and there few times in which he

did not even know what the company was producing. His tactics involved the price pattern

which suited his taste and if there is nothing suspicious about their P/E (price and earning) ratio

then he will submit his trades.

Sykes considered a “once in a lifetime” event when he traded the Illinois

Superconductor (ISO, it is no longer exist), held it over night , even though he has never been

fond of holding a piece of stock over night, and gained $123,000 in two days. Later on, he

invited the whole floor of his dormitory to a steak house for dinner. He was then averaging

about $100,000 a week until he made his first million. He then discovered a new way of trading

stock which is call “short sell”. By that time NASDAQ had peaked at its all time high 5,132.52
points. The following figure shows the NASDAQ trend in past 40 years, and peaked above 5,000

points in year 2000.

NASDAQ All time high

Figure 2 NASDAQ 40 year trend

Short selling is another way to trade stock but in a reverse manner, which a trader

would wish stock price to fall in order to make profit. The methodology is borrowing stocks

from the broker at a higher price and gives it back at a lower price, and then traders would take

the difference as their profit.

With the burst of “IT-Bubble” and NASDAQ plumbed, combining with Sykes discovery in

short selling, he was able to reach over $1,000,000 in his portfolio.

Many economists believe that short selling drives economy down, and that is why many

country such as France illegalize short selling. However, Sykes argued that selling short actually

improves economy by pressuring all the companies that con trader’s money before they

declare bankruptcy out of the market. This allows legitimate companies to move on into a

healthier market.
 By the year of 2002, Sykes had already traded thousand of stocks and became one of

the multi-millionaires in the world by profiting over $2,000,000 and having the net worth over

$1.65 million. after tax deduction. Ever since then, the media emerged their attention on him,

and questioned if he was one of the luckiest or most brilliant guy in the stock market. These

questions came up since it just so happened that he would get into to an IT-Bubble surge

before it burst and he would short sell after the burst. While everyone was questioning his

ability, in year 2008 Sykes decided to prove every penny that he made was no luck by starting

off with $12,000 in his account, and making another million dollars.

Timothy Sykes has now his own blog/ stock training website that shows people how he

trades stock, he sells DVD instructions and also gives out stock alert to the people have the

membership on the stock that he is trading. His main income is from the membership fee and

DVD on the website and not from the stock trading. However, his performance on stock trading

will affect his popularity with followers. Sykes reached over $125,000 by beginning of April of

2010 and Covestor.com has documented every trade that he made.

Timothy Sykes inspired many of stock traders across the United States, and many have

made a fortune by following his strategy, and many college students were able to pay off their

tuition by following his stock alert on timothysykes.com. Thousands of fans and competitors on

WallStreet are carefully watching him as he is approaching his second journey to millions. “It is

just matter of time before he made another million dollars,” said Rich Blake, a senior editor of

Trader Monthly. Sykes did set a limited time to reach his goal, but as long as he can accomplish

the million wonder again, it should be enough to prove everyone wrong and that he is a great

trader.
Works Cited
Sykes, T. (2008). An American Hedge Fund. Hamden: BullShip Press, LLC.