“You Blew It Up! Damn You! Damn You All To Hell!” The Penny Stock Version

For all of you who haven’t read my book An American Hedge Fund or watched my PennyStocking instructional DVD Package, back in March, I wrote about CYGT being the stock, the sole reason, as to why my hedge fund lost 35ish% over 2 years in 2006 and 2007 (see blog post HERE).

Tough, tough, tough, tough, tough lesson, but it made me more cynical, conservative, an infinitely better teacher and even more determined to stick to my core trading strategy, a strategy that has yet to produce a huge loss, especially when I stay true to its quick loss cutting principles.

Anyway, that bankruptcy filing was pretty much the end of the story for me and the 1 million+ shares of CYGT I’ve still got–maybe I’ll frame the stock certificates as a reminder of how corrupt/bad/lying/failing (not personal just business) ALL these tiny companies are–but the other day came the nail in the coffin as the company  

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Two TIMalerts: Why I Bought Energy Recovery, Inc. (ERII) & Tried Shorting New Century Energy Corp. (NCEY)

Here are today’s trades, and almost trades, told below by the unedited emails that went out to TIMalert subscribers today (and subscriber’ registrations will be activated tonight for the TIMalert subscribers only members website (TimAlerts.com) that will/should be fully functional tomorrow with the near real-time posting of any emailed alerts and commenting capabilities)

(every one else, don’t worry, TimothySykes.com will always remain free and open, think TheStreet.com & RealMoney.com-type model)

Today, basically NCEY was unborrowable to short (did anybody get in on that?) and ERII broke out as I was wanted/expected, up $2 or 20% from my alert, but it dipped a bit first and since I suck at/have no confidence buying stocks, I took a quick $150 loss…I’d do it again cuz you gotta remember with my account this small, I’m all about safety first…of course if the Pattern Day Trading Rule wasn’t in effect, I could easily have gotten in again when it broke the $11.30-$11.40 area…but no whining because look at these subscribers testimonials (you guys matter infinitely more than my own little account)!!

“I’m up 1200 so far on ERII. Great pick!” –bestdeception

“I had only 500 shares, banked total $1035 from ERII (after comm. & fees).” –Ryan

10:15am:

i just bought 500 shares of cool water energy recent IPO ERII on the breakout at 11.29 (poor execution)…11 was previous high, 10ish was the low and its only been on the market for 3 days…over  

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TIM 2nd Quarter Review: I Suck But Most Everyone Else In This Joke Of An Industry Sucks Worse

After only a decent April (see monthly review HERE) and a heartbreaking (wasted opportunities galore) May (see monthly review HERE), my 14% June return (see monthly overview HERE) basically made my 16.6% quarter, my trading account surging from just over $17k to just over $20k, allowing me to continue to rip on this joke of an industry since even with all my mistakes I’m still doing better than 99% of the people out there, most of whom perform slightly worse than the major indexes (90% of traders lose $, 70% of fund managers fail to beat the S&P 500 cuz they’re schmucks!):

Below are all my trades and best/most important posts from the quarter that was:  

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TIM June Monthly Review: It’s Satisfying To Earn 14% When Most Others Lose

June was a tremendous month for me, my site and my strategy all took off just as others collapsed. Of course, just as all the longs look like geniuses in bull markets so do short sellers in bear markets and my trading/teaching was far from perfect, but the key is we’re all earning and learning…

To the numbers…

My Thinkorswim account increased from $17,807 to $20,272, a gain of $2,465, or 13.84%. Plenty of mistakes (click blog posts on the table below to see), but nice domination of Covestor (see rankings HERE) and the major indexes:

Site traffic continued its strong growth, especially monthly visitors which increased from May’s 104,000 to 150,000!

And get excited cuz now I’ve figured out a way to  

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Three Small Profitable Trades For TIM; Three Giant Gains For TIMalert-kind

Yup, posted about another couple of trades rather perfectly, even while I personally screwed them up a bit…this has gotta be some kind of record, what is it 10 years of this crap now? Welcome to my life brothas!

Wednesday: After a morning runup, I saw HYGS fading a bit—price and volume-wise, so I pulled up my Thinkorswim live chat to enter in my order (reserved shares in the morning, but just put a note on my account) and guess what I saw, I had shorted 2,000 TGC at $3.49 (thinking it’d never get up that high, I was too lazy to put a note on my account/have to get the chat window open again, the sequel to my original VRML mistake) and now that stock was at $3.75….friggin moron!?!?!?! Wasn’t a bad short in the overall scheme of its chart so I told TIMalert subscribers I’d hold onto it and see how it’d perform, even if it was an accidental trade. Also told em, I was watching HYGS for a possible fade since at $2.30ish, it was only up 5 cents on the day and sellers were looking more determined (forming a wall of sellers with fading buy volume)…

A few seconds later and HYGS has broken $2.30 so I put in the order to short 2,000 with a limit of $2.27…got $2.29, whewww….emailed TIMalert peeps (members-only website coming next week so you never miss anything) by saying “i think if it takes out 2.28-2.25ish, it can go under $2”…just as that was breaking down a bit, TGC pulled back too so I decided to play it safe, covering at $3.44, a 5 cent/share gain, but basically getting me out of a trade I never meant to be in.

A few minutes later, HYGS had indeed gone  

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Short Selling Games: How To & Not To Short A Morning Spike

Each of the past two mornings, I’ve shorted Uranium Resources, Inc. (URRE)—mainly cuz it’s up so much and its horrendous long-term chart and level 2 price action tells me there’s a ton of bitter shareholders looking to sell on these bounces. This 100% stock price spike naturally has brought in the short sellers, many of whom are complete morons, thinking it’s gonna collapse at any moment and I gotta thank God for their existence cuz their premature entry and inevitable squeezing is what causes these morning spikes.

Yesterday, I wisely waited for a nice wall of sellers to enter—meaning there was plenty of overhead resistance, even during the spike, shorting 1,500 at $4.05—even though it was off the day high by 20 cents…I wanted 30 cents of downside and got some of it, but when buyers seemed determined in the $3.85 range, I said to my self “can’t be greedy, this isn’t an I deal play” (it wasn’t negative on the day nor the afternoon). Covering at $3.90 it was a decent $200 gain.

Today, I got greedy.  

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No Yahoo!, You Want To Make More Money, Not Less!

I don’t give a damn about any of these companies stocks—Yahoo! Inc. (YHOO), Microsoft Corporation (MSFT) or Google Inc. (GOOG)—but when I see articles with titles like this: “Microsoft offered $9 bln for Yahoo stake, search deal”, I can’t help but laugh.  

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One Of The Worst Trades Of My Life & Still A Solid Profit: Behold PennyStocking!

You know how I always say wait for ideal opportunities? Well today was one and while I made $700, I screwed it up completely—latest proof that if u stick to these kinds of plays, its sooooooooo tough not to make money:

When a piece-of-cow-dung-type company (just look at the chart, little research other than that needed) like South Texas Oil Company (STXX) spikes up…for any reason…you gotta get interested in shorting it. When similarly foul smelling stock promoter Lebed is involved, the BullShitometer goes off the charts and you just gotta reserve shares ASAP

Well that was the thinking that made me short 1000 shares of this stock yesterday at $4—mistakenly believing I got a good execution since the volume was pathetic and the bid was $3.40, I figured I’d scalp it for an easy 30-50 cents/share…unfortunately, the bid caught up and shorts like me got squeezed to the $4.50 range (thankfully the company is so bad, even stock promotion couldn’t get it up much more than that!). Displaying some newfound patience/conservatism, I controlled my losses and covered at an average of $4.22, a $250 loss, but not bad considering my impatience/stupidity at getting in in the first place (I love how several PennyStocking DVD students commented/emailed/IMed me I was wrong for getting in—at least I’m a good teacher!)  

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May 2008 Review: The Only Real Mistake Is The One From Which We Learn Nothing

May was an interesting month and no matter the multitude of mistakes, I gotta say it was an outright success. Sure, thanks to me focusing too much on building this new site, not being disciplined enough in avoiding commodity plays or more importantly, waiting until they showed some–any–weakness to short, not being able to take enough pain before the damn busted (CNEX!!!!) or getting a short trade executed accidentally when I told everyone else to stay away (VRML!!!!)—yes made just about every mistake in the book, wasting away precious opportunities as if I was Britney Spears—TIM finished down just over 2% at $17,807…. Boo freaken hoo—now with less projects, albeit slightly, less sleep, sucks, I’m up already up 5% after 3 good trades this month!

Definitely more importantly Pennystocking students like Jeff Moates and Tony Ellis, are really banking, think $10,000+/month, no joke, aka doing much better than me—as I predicted throughout my instructional DVD…“you can do better than me”—and that’s certainly the reason why my website traffic is breaking out gradually…not a pattern to short like it was back HERE

In summary, yes, I screwed up a lot, so what, I masterfully controlled my losses, you guys learned from it, I learned from it, now we’re all better at trading, we can l augh at the 90% of traders who don’t know what the F#$! they’re doing, falling prey to “gurus” who cost thousands of dollars but fail miserably at enriching anybody but themselves and thus who should be taunted/ripped apart regularly and sternly, we understand the risks better, our profits are getting bigger the world is a better place. Welcome to my mission, enjoy!

Good Trades

Finally shorting into panic, gooooood Timmayyyy  

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More TIMtv Video Clips To Cure Your Trading Addiction

When I see emails and blog comments from people asking about random ass stocks like Sirius Satellite Radio Inc. (SIRI), Ford Motor Company (F) and China Finance Online Co. (ADR) (JRJC), I know I haven’t promoted my instructional DVD PennyStocking hard enough. I thought I was doing a good job, but it turns out I was wrong. Cuz if you had seen it, you’d know its central theme is to only trade worthy opportunities being a.) incredibly volatile stocks—think up 50-300% in a few days and b.) inefficient stocks—think spam stocks, message board/newsletter pumps…stuff like NTI…NEVER would I recommend playing large liquid companies that everyone and their mother has some opinion on. On those, you have no odds whatsoever, so it’s no wonder why so many traders lose money.

You’re overtrading.

Trust me, I know how addictive the kinds of profits you made on PDO, MXC, FPP, and ROYL can be, but now you gotta step back and realize those patterns are gone now. As I anticipated, traders of smallcaps—where there’s only a few truly worthy opportunities per week—need to be distracted/entertained the rest of the time….and that’s why I’ve already uploaded more funny/educational/wastes of time videos to TIMtv…Watch these anytime, but if you feel the need to profit and you rationalize trades by saying to yourself “let’s see how this goes” or “after all, trading is like gambling” or the worst “win some, lose some”, immediately go to TIMtv and stop trading! Your account will thank you…and remember LiveStock tomorrow at 1PM EST not so sharp!

Great great clip about pump and dumps, the guy beat me to it

Mariah Carey throwing a baseball…funny stuff

Awesome angry Bill O’Reilly clip  

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The Dangers Of Shorting Hot Oil Stocks With Absurd SEC Rules, A Lack Of Discipline & A Tiny Account

That title is just about the worst combo there is and yet I went full steam ahead, shorting 1,000 FPP five minutes after the market open into a spike I thought to be ill-fated. Nearly right away when I was down 20 cents on my position, I knew I’d screwed up. Despite my warning everyone about the dangers of shorting these rocketships before they go red and the fact that I made the exact same mistake just two days ago, I even refused to take a $150 profit, instead wanting more, almost inevitably getting squeezed for a $600 loss.

I guess it’s true what they say, you can’t t each a greedy Jew new tricks.

I explained my rational for breaking the very rulesI created to protect myself the other day—not that its much of an excuse—and today was no different, except FPP was double the price and I got squeezed for double, 50 cent/share as opposed to 25, too. Fitting, right? Again, I was right about the morning pullback after the spike, it just happened $1 higher than my entry!

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The Daily PennyStocking Roundups Begin Now!

Based on my book/DVD sales, email list and website subscribers, there’s now a few thousand of you out there who are playing these trashy low priced stocks based on my PennyStocking strategies, which obviously makes me Naismith-like proud. Don’t get me wrong, I didn’t invent making $ from buying and shorting these corrupt companies, I’m just gonna be the one to popularize it! Especially short selling these suckers!

Since there’s sooo many different players trading sooo many hot stocks now, I thought we’d have a daily roundup post like this that will benefit us all. Forget about just my trades/lessons and gains/losses, I want you guys to share your daily moves too! If we all share our thoughts/trades openly, everyone benefits and can better be able to adapt to the current environment/evolving patterns. 90% of traders lose $, so if we can reduce that number here to say 20-30%, we’re not only profiting, we’re doing something helpful/meaningful. (These kinds of posts are just the beginning)

So, this morning–no matter that I’ve repeatedly stated it’s wrong to short into a morning spike cuz they always go further than anyone expects–I broke my own rules and shorted, current Supernova-forming FPP. Even though it was a commodity play–which I hate–and an earnings play–which I also hate, emotion got the best of me as I shorted 1,500 shares at $3.92, expecting the wall of sellers at $4 to hold and for me to scalp my way to $300-ish profits rather quickly.

From the get go, FPP didn’t cooperate, holding steady near its highs, within 5 minutes taking out the 15k sellers at $4 and surging straight to $4.25….as this was happening, all its fellow oil and gas plays like PDO and MXC were making ridiculous runs, so FPP seemed the cheap way to get in on that momentum–aka the upside appeared bright.

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How I Broke My Rules And Lost Short Selling A Fraud, Cannon Exploration Inc (CNEX)

Just about everyone and their mother understands Cannon Exploration Inc (CNEX) is a an outright fraud. Whether you look at PinkSheets.com displaying a skull and cross bones with the tagline “Caveat Emptor” next to its stock quote, its now $470 million marketcap (at $7.25 stock price), the blatant pumping by all the usual suspects and the fact that this company has no business of any kind and has now septupled (7x) in price in 5 days all due to a fluffy PR announcing a new website and a sketchy letter of intent to acquire a seemingly real business, no doubt in exchange for pumped up shares.

Knowing all that, you might understand why I shorted 600 shares yesterday at $6/share half expecting it to go higher—with the goal of averaging my cost basis up too—but never excluding the possibility of a quick $1-2 drop in price.

That’s all well and good, but as a PennyStocker, I have no excuse and my $760 loss (I just covered at $7.20), including commissions, is well deserved. Because while this company is scummier than most, it’s just the latest pump and dump that can—and often do—run further than anyone thinks possible so I still should’ve played by the rules I myself created! Rule #1, don’t short randomly strong penny stocks, you gotta wait for the price action to concur with your thesis. Usually it’s best to short into the market close of the first down day of a big runup, but sometimes that’s too late, so shorting in the afternoon when this kind of a stock goes from positive to negative often opens the door to a big afternoon dump.  

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TIM 6 Month Review: Earn 47% While The Markets Drop 10%

Yup, that’s right, tiny, loud mouthed, mistake-celebrating TIM just busted a cap in the ass of the joke that is the financial industry by implementing my own brand of PennyStocking, or short selling penny stocks, a niche that’s supposedly random/akin to gambling and according to Forbes’ oh so popular Investopedia, in their definition of short selling, impossible to short sell! Screw them, the graph below says it all:

Maybe in the future more attention will be paid to this accurate definition of short selling—written by somebody who’s made millions from this strategy instead of some wannabe who’s just the latest journalist joker…you guys remember Sri, the theater major over at CNBC (fired yet?) and TheStreet.com guy who wrote about a product the company had already sold (fired yet?)! How could we forget—after all, their jokes have been very profitable for me and my readers.

Sorry, I digress—my blood is boiling from the amount of misinformation out there—this is a time for celebration and review. After all, while I made plenty of mistakes, a 47% return in 6 months is something to be proud of. So, take a look at all the most important posts during this journey, I promise, no matter what Investopedia says, this strategy is alive and well, legal and learnable (and to you haters, just wait until you see what I can do when I no longer have to deal with the pattern day trader rules, I plan my speaking schedule better and I’m not building a revolutionary new website…when TIM reaches $100k, it’s gonna be damn fun shutting you up as I make $50k+ in 6 months):

Successes:

Shorting Into A Factually Inaccurate Article

How I Made An 8% Return Before Lunch

How I Made 25% Just By Holding A Distinct Pattern Overnight

Why My Strategy Works Even For Stupid People

God, I Love Short Selling Penny Stocks!

Redemption Trade

Failures:

A Truly Amateur Trade  

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