Wall Street Sequel: Idiots Never Sleep

Actually, the name of the sequel to the hit movie Wall Street is Money Never Sleeps and when it debuts in 2009, I have little doubt that its focus will be on absurd sums of money, greed, opulence and corruption in the finance industry. As will the upcoming TV show about hedge fund managers from Entourage creator Doug Ellin. Unfortunately, this is what the majority of people in and out of finance think Wall Street is all about (while there should be more emphasis put on the journey as the awesome There Will Be Blood does (saw it two nights ago, review forthcoming).

But other than the first paragraph, this post does not deal with Hollywood’s perception of the financial industry; instead, I’m talking about the idiots who keep emailing me, thinking that this YouTube video shows my strategy.

This is their main exhibit as to why I stink at trading and am doomed to fail! They are idiots.

Let me make this very clear: the strategy I advocated in the video was ONLY for the $1 million CNBC stock picking contest. Since there were over 375,000 contestants and contest rules put the emphasis on weekly gains, it was right to bet 100% of your portfolio on low priced stocks like Six Flags (NYSE: SIX) (as the winners later proved).

Not so in the real world because in the real world, you have to worry about the risk of losses! In the contest, whether you gained 5% to 20% or lost 5% to 100% of your capital, you didn’t win, so the risks didn’t matter. It was all about big gains. Go big or go home. When I first started trading, I frequently risked 50-75% of assets on one play, but that was 1999-2000 and ignorance truly was bliss. Now, if you read my blog, book or watch my DVD, I recommend using no more than 20-30% of assets per play and maybe even 5-10% for beginners.

So, what can these nasty idiots teach us? Simple—there are a ton of dumb people in this business. They are quick to jump to conclusions without doing the proper due diligence. (Think me and my investment in Cygnus) I don’t write this to mean, I bring it up because for my first post in 2008, I want you to understand that you must learn to be thankful for their presence because it is their money that you will take. After all, these idiots either manage their own money or if we’re lucky enough, they manage OPM (other people’s money) too, both of which they will most likely be handing over to people who do take the time to do thorough – and I do mean thorough – research.

A perfect example is me and my investment in Cygnus. I fell in love with their technology and its potential and besides losing a bunch of money (nearly $500,000 as of my last count); I learned a ton of lessons. Lessons that will help me for the rest of my life and which I will gladly share with you. After all, when I made that investment, I was one of those idiots I now write about. The more experienced market players must have been drooling to take my money, the money of my friends and family and my fund’s investors. After all, I was one of those idiots who managed other people’s money. (See how it all comes full circle?)

So, as my first lesson for 2008, don’t go to random restaurants in NYC. Do your due diligence. You can start with this list.

Posted in CYGT, Link Love, Rants

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  • tbohen

    Good ol’e pcarlson, nothing but a NONE and a quick disconnect from the chat on ZYXI

  • tbohen

    At TOS

  • http://www.timothysykes.com timothysykes

    lol, got 200 shares of ZYXI, not even worth my time

  • Dan000

    No ZYXI at TOS 5:03am pst.

  • Crazy Mike

    Hey Tim, I sent you an e-mail. I have not been getting any updates. Missed the alert on FEED. Can you please look in to this problem?

    Thanks

    PS: I get files/e-mails all day long at my work so i’m prettysure it’s not on my end.

  • notesguy88

    Man, that was quick. No shares of ZYXI left. I reserved FEED just in case however.

  • http://www.timothysykes.com timothysykes

    mike, pick a new email, when you bounce too much, Mailchimp automatically stops sending

  • tbohen

    TIm, normally I ask for 1000 or 2000 shares etc. How do you get 200? Do you just keep asking at a lower amount? I’ve never had a broker at TOS say, “I don’t have 1000 but I can get you 200.”

    Of course that is if you don’t get pcarlson and he disconnects you instantly :)

  • http://www.timothysykes.com timothysykes

    i asked for 1500, 200 were available..

  • tbohen

    RIght but do they just offer that up? I have always either gotten a yes or a no on my request, never a counter offer of fewer shares? Do I phrase that in my request to them? That I want 1000 but I’ll take whatever they have?

  • kelvin

    you guys notice about pcarlson ??? he suck .. always NONE with quick reply and disconnect me

  • http://www.ontheflyguides.com Jeff C

    Report his ass as an ass….love the cougs on Bloomberg in the AM….morn porn…plenty of long plays today too, and I get the same response Tim does from TOS quite often

  • YoungGunz

    yeah, pcarlson is in and out quick. You have to look at the bigger picture though and realize that he is also getting to more people faster because he is doing that. He should leave the chat open for the customer to close it themselves if they don’t have anything else to request.

  • derevyan

    Tim,
    Check out amd – gained 30% today in pre-market trading over some news. Potential short later on today..?

  • http://www.timothysykes.com timothysykes

    amd is irrelevent to me, not my kind of stock, learn my strategy

  • http://collegecharters.com T-Money

    hey what price would you think of shorting DNDN?

  • http://www.timothysykes.com timothysykes

    reserved 1000 ROYL for potential short later today

  • TonyEllis

    I shorted DNDN yesterday at 8.80

  • http://www.timothysykes.com timothysykes

    nice TE!

  • http://collegecharters.com T-Money

    DNDN is tanking, I bought a nice put option.

  • Reaper

    no more ROYL at TOS.

  • http://collegecharters.com T-Money

    RZ is Tanking big time!

  • http://collegecharters.com T-Money

    Tim where do you think resistance is for RZ, I’m new to technicals, 5.80?

  • tbohen

    YG, on pcarlson, I realize that, i wasnt crying just wondering how to go about getting fewer shares that I originally wanted when I can’t ask a followup question.

    Still looking for help on how to get a smaller amount of shares:

    RIght but do they just offer that up? I have always either gotten a yes or a no on my request, never a counter offer of fewer shares? Do I phrase that in my request to them? That I want 1000 but I

  • Getshorty

    I have got offered less without asking, I f you want to make sure they offer you whatever is left just tell them

  • http://www.ontheflyguides.com Jeff C

    GGC anyone?

  • tbohen

    OK typically this is my request.

    need 1000 shares of ABC to SHORT

    I will now try:

    need 1000 shares of ABC to SHORT, or fewer shares if availible.

  • http://www.timothysykes.com timothysykes

    good spot jeff, GGC could be good soon…

  • be-the-ball

    Tim, you ignore the chat room and post here. Figured out that you don’t get page views if you have a chat room and that hurts ad revenue?

  • http://www.timothysykes.com timothysykes

    nah just dont like the chatroom cuz i’m doing a million things and people get pissed when i dont answer/see their questions

  • http://www.ontheflyguides.com Jeff C

    Thanks Timmay…keeping my eyes peeled, even if I can’t get borrows like STSI!!!!!!

  • be-the-ball

    Tim, do you plan to pay for the full chat service so people don’t have to see the annoying ads?

  • http://www.timothysykes.com timothysykes

    nah still testing different chats…just move the browser down to block out the ads, its easy

  • Getshorty

    FEED afternoon fade time?

  • be-the-ball

    i use adblocker, it’s not the sight of the ads, its the fact that the loading of the ads slows down everyone’s systems, effects trade executions for those of us thaqt work quickly.

    understood that you are trying others out, but it would be good if eventually the ads are gone

  • Getshorty

    MOzilla chats are so good and simple, would love if something like that will work from here.

  • http://www.timothysykes.com timothysykes

    anybody wanna take a look at the latest covestor rankings and guess what my next post is?

    http://www.covestor.com/rankings/portfolio?showselector=1

  • tbohen

    Maybe about how your scared shitless of me overtaking you ;)

  • Reaper

    Maybe its about how I would be a lot higher if they auto-imported from IB?

  • Reaper

    I’m surprised I’m still #24 despite not having traded in my TOS account for awhile.

  • be-the-ball

    maybe its about “who gives a shit about covestor?”

  • http://www.timothysykes.com timothysykes

    pennystockers are now the top 5 people on covestor and 10 out of top 30…this strategy works likes no other:

    http://timothysykes.com/2008/10/07/pennystocking-joke-of-an-industry-domination-the-top-5-ranked-traders-out-of-10000-on-covestor-are-pennystockers/

  • be-the-ball

    so pennystockers can beat out 9990 high school kids, housewives and frat boys in the market…

    goody, gumdrops
    ;-)

  • http://www.timothysykes.com timothysykes

    not just those people too, u forget 9 out of 10 hedge funds and mutual funds are down on the year too

  • be-the-ball

    no, you are correct, lots of the big boys getting their butts handed to them yesterday.

    And our holy spirit, aka Cramer, is down over 30% YTD

  • be-the-ball

    no, you are correct, lots of the big boys getting their butts handed to them this year.

    And our holy spirit, aka Cramer, is down over 30% YTD

  • tbohen

    When do I get a post featuring me, about how super cool and good looking I am and what a great penny stocker I am, since I’m sure I’ll have #2 spot for one day till I fuck it all up and drop to number 9999999 on the list….

  • http://www.ontheflyguides.com Jeff C

    So you’re sayin there’s a chance….I’m jcogie btw….funded by a paper route

  • http://www.ontheflyguides.com Jeff C

    Tried to short GGC, but alas, no shares TOS!!!!!! F@@@!!!!!!!!

  • tbohen

    Short 1000 GGC @ $2.60 chickened out @ $2.38 $200ish profit.

  • tbohen

    Jeff you can have my 1000 shares :)

  • http://mcbowler.com mcbowler

    Made $650 on RZ and probably has room to go down more. Thanks Tim!

  • http://www.timothysykes.com timothysykes

    FYI Year-to-date:
    DJIA -28.78%, S&P -32.15%, Nasdaq -33.84% TIM +105%

  • Getshorty

    you bitch

  • djvenom

    thats sickk…Im still new but have made a modest 7.3% YTD

  • codyhof

    I was 20th until last friday probably gonna fall off the god damn leaderboards now