So you’re interested in penny stocks and you’ve heard about Timothy Sykes? Maybe you’ve watched some of his Youtube videos or liked a few Instagram posts.
But, as a prudent future investor, you’ve also checked out what people have to say about him, on Reddit and similar messaging boards. And you’ve probably heard at least one commenter tell you not to fall for the Timothy Sykes scam.
So who should you believe? In this review, we’ll answer all your major questions. We’ll take a look at Timothy Sykes’ paid programs and products, explore some of the criticisms, and make our final verdict.
But before we do that, let’s take a quick penny stocks recap.
What Are Penny Stocks?
Penny stocks are simply stocks valued at less than $5. Typically, penny stocks are not traded on large exchanges like the New York Stock Exchange. Instead, investors purchase them through alternative exchanges.
Penny stocks have garnered something of a negative reputation. Films like the Wolf of Wall Street don’t portray the most enticing of pictures. Generally, companies offering penny stocks are not subject to the same stringent rules as those listed on large exchanges, particularly regarding public disclosure of performance information.
Penny stocks do not have the same level of liquidity (immediate saleability) as “normal” stocks, they’re highly speculative because the success (or lack thereof) of companies is harder to predict, and they’re much more open to market manipulation.
It sounds like a pretty disappointing picture, right?
But don’t give up on penny stocks just yet. Without a shadow of a doubt, there is money to be made in penny stocks. And there are many successful long-term traders. Successful approaches usually rely on taking advantage of market volatility rather than the outlook of the companies themselves.
Who is Timothy Sykes?
He’s been featured in numerous big-name publications, including The New York Times and Forbes, and even had appearances with Larry King and Steve Harvey (check out the Youtube video). He’s got 1.5 million followers on Instagram and is fond of showing off his jet-setting lifestyle.
So why the big deal? He trades penny stocks and he likes to flaunt his wealth. Live and let live, right?
Well, that’s not quite the full picture.
Timothy Sykes offers a number of paid products and services. Through his sites TimothySykes.com and Profit.ly, he offers a hefty assortment of paid programs, including market alerts, training materials, and an application-only “challenge”.
He’s also gotten into a few public arguments with celebrities, accusing them of less-than-pristine trading practices.
So the argument runs, isn’t he just making his money off of his courses? What’s more, aren’t penny stocks super-risky anyway?
Let’s dig a little deeper.
What Kind of Methods Does Timothy Sykes Teach?
One criticism of Timothy Sykes (which in a sense debunks the scam artist theory) is that he’s just teaching trading fundamentals. It’s the same old stuff repackaged. Some critics argue that beginners would be far better off learning these basics from other more inexpensive sources.
So is the criticism valid? While we think there is some truth to the point (Sykes does cover the fundamentals), we also believe it misses two important things.
First, it discounts the importance of beginners of a highly-structured training regimen that covers the essentials. People new to trading penny stocks will quickly go awry if they don’t know what they’re doing. And Sykes offers a supportive environment for those starting out, along with an exhaustive video-training program.
Second, it disregards the nuance of some of Sykes’ more innovative strategies. He’s all about teaching his students to rely on a data-driven approach that focuses on identifying patterns, maximizing early winners, and limiting losses. A high level of adaptability in the face of uncertain market forces is at the core of what he teaches.
What About the “Pump and Dump” Timothy Sykes Scam?
Another commonly-cited argument is that Syke’s is profiting from “pump-and-dump” schemes.
These occur when a trader publicly recommends stocks to inflate their price before “dumping” them before they start to decline. Some have accused Timothy Sykes of using his influence to encourage his students to purchase stocks so that he can profit from them.
We’ve found this argument is largely unwarranted. Even a cursory engagement with his content shows that Timothy Sykes consistently advises his students against the pitfalls of pump-and-dump schemes and part of his overall strategy is learning how to recognize and utilize them in other circumstances.
Timothy Sykes: Scam or Not?
So what’s our conclusion? Despite a public persona that divides opinion, Timothy Sykes is not a scammer when it comes to the substance of what he teaches.
He often verifies his earnings, and a retinue of students speaks positively about his methods.
Furthermore, it’s not as though he’s hiding behind a paywall. He publishes large amounts of content on his blog, Youtube channel, and social media accounts. His courses don’t have a staggeringly high price-point, so for somebody interested in this area, they’re well worth checking out. If you don’t like what you see, just cancel your subscription.