Tim Sykes has a lot of advice for the people who aspire to be as wealthy as he is. Today, the chubby-cheeked 33-year-old has a characteristically strange suggestion: self-harm. “I want everyone to take your hands,” he says into the camera lens of his laptop, “and smack yourself in the face!”
Sykes is seated alone at the dining room table of a $3,000-a-night suite at the Gansevoort hotel in downtown Manhattan. Facing his computer in only a bathrobe and glasses, he looks at the stock chart of a little-known security company called Technical Communications, up 30 percent today on news of a contract to provide encryption to the Egyptian military. Also looking at his screen via a live stream are a few hundred of his most dedicated customers. Sykes runs a social network for traders called Profit.ly, which has about 50,000 members. A subset of 6,000 pay to receive daily e-mail tips, weekly newsletters, and access to thousands of videos such as the trading webinar he’s just begun. These are the people who failed to correctly guess the answer to his hypothetical—“Which stock am I looking at right now?”—and thus necessitated that slap to the face.
“Smack yourself if you don’t get that you should be looking at the day’s biggest percent winner,”Sykes says into the camera. “Over the next two hours this is my No. 1 trade.”
Sykes is a lot of things: a penny-stock trader, a Web entrepreneur, a failed hedge fund manager, and perhaps the most unashamedly press-friendly person in finance. But what he is most of all is a student of hype, the kind that makes the cheap stocks he favors spike and tumble and the kind he manufactures. In the past few years he’s appeared on a handful of reality-TV shows; made parody videos of top-40 songs with his 21-year-old model girlfriend; antagonized CNBC by posting an unflattering picture of its then-top anchor; and purchased a $200,000 sports car that he doesn’t enjoy driving, all in the name of publicity, both good and bad. He’s pretty open about what he’s doing: “I play the role of the rich douche bag.”
For Sykes, every day brings a new opportunity to call attention to himself. He also maintains timothysykes.com, where he sells how-to-trade-like-me DVDs for as much as $1,500. In November, to gin up interest in a new disc, he asked his social media followers to leave a comment below a picture of his Porsche, which he said he’d give away to the person he thought was most deserving. “I get to embrace my weirdness,” he says. “The weirder I am, the more viral it goes.” The post has more than 20,000 Facebook “likes” and 3,800 Instagram comments; he still hasn’t given away the car.
Sykes courts attention so investors will find his websites and pay him for advice. After first trading with his own money during the Internet craze and then running a hedge fund that went bust in 2007, he refashioned himself as a guru, telling followers how they can profit by buying and selling penny stocks. He says he’s made $4 million on such trades—and he can teach you how to read market patterns, too, if you’ll just enter your credit card number.
Penny stocks are the most dangerous corner of the market—rife with fraud and get-rich-quick scams—and no legitimate financial adviser would ever recommend them to a client. Sykes views the sketchiness of penny stocks not as a reason to avoid them but as an opportunity to learn more about their patterns. Around the same time that he started Profit.ly, he watched the biopic Kinsey, about the pioneering sex-education researcher, and saw a parallel. “Look up stats about sex education before Kinsey got started,” he says. “People just didn’t want to talk about it openly. Just like the ugly world of penny stocks. Back then everyone’s dirty secret was sex. Today, I’d guess that most traders and investors have tried penny stocks. They’re so tempting! But 90 percent of the people who trade lose. They’re degenerates. I’m trying to give structure to junkies.”
Sykes’s own addiction began as a teenager in Connecticut, when Tommy John surgery cut short a promising tennis career and he was forced to find a new hobby. He quickly became obsessed with the stock market, running between three computers in his high school’s library to keep up with the rise and fall of companies he’d previously never heard of and knew nothing about.
“All his marketing makes him look like a jerk,” says his mom
During the fall semester of his freshman year at Tufts University in 2000, Sykes began trading in earnest using the $12,000 his parents had saved from his bar mitzvah. “We figured he would lose it all and learn a valuable lesson,” says his mom, Jo-Ann. He didn’t. Instead, he found a convenient creation myth.