Perhaps I should be offended by the title, but when you work in an industry full of frauds and cowards, you have a track record like mine and you’ve been around for a decade using the same exact proven trading strategy detailed in my instructional DVD packages, you get used to doubters.
Just as Peter Brimelow of Marketwatch declared back in a feature article on me from 2003, “So maybe Sykes will be around in 20 years’ time. But he won’t be averaging anything like 80 percent compounded.” (Peter, you’re right, I can’t make 80%+ annually with millions of dollars under management, but I can easily do that if my trading accounts stays under a million and more importantly, I can teach others to do the same too!)
Dealing primarily with my Covestor auto-trading (which as subscribers have learned is limited by a $50 million marketcap minimum and the ability of Interactive Brokers to find shares to short…my one recent trade buying Integrated Silicon Solution, Inc. (ISSI) at $8.82 was right on, but I was too conservative to wait the required week to earn 20%), check out my section from this new WSJ feature article below:
(my previous WSJ article concerned short selling)
One stock picker he’s following is Timothy Sykes, who is among the most popular on Covestor. Mr. Sykes is a high-energy New Yorker who says that, as a college student, he turned his $12,415 in bar mitzvah money into a $1.64 million fortune in four years. He’s also an entrepreneurial machine who wrote a book, runs a Web site, makes instructional DVDs (deluxe set: $697) and offers personal coaching ($3,297 a pop) on his trading techniques. Mr. Sykes frequently shows up at the top of the Covestor rankings and has more than 6,000 followers. But the number that stood out recently was this: a 369,255% total return since he started on Covestor in November 2007.
Yet Mr. Sykes says this figure isn’t realistic. Covestor doesn’t factor in cash that may be held in an account: If Mr. Sykes puts 20% of his portfolio in a stock, Covestor calculates the returns as if he went “all in,” skewing the data. Including cash, Mr. Sykes was recently up 194%, still handily beating the market. But his strategy doesn’t translate well to automatic trading because Mr. Sykes says he often buys and sells stocks that don’t meet the liquidity and market-cap requirements for Covestor accounts; many of his trades get filtered out or can’t be replicated. Covestor CEO Blacher acknowledges that the posted number is not the return that Mr. Sykes himself achieved. The result is returns for his automatic-trading portfolio aren’t nearly as impressive: It was recently up 30% since he started it in April 2009, slightly behind the S&P 500. “I’m not an investment manager,” he says. “I do this for entertainment and informational purposes only.”
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