The Challenge: Nobody had ever tried being honest in penny stock land before as all the most successful companies get paid by companies and shareholders to “pick” their stocks in order to pump the stock price higher while leaving their alleged customers reading the “picks” out to dry.
They assume that these people do not matter as they do not pay anything for the “free newsletters” or just a minimal amount compared to the six and sometimes seven figures penny stock promoters get paid to promote a stock.
So the question for me was how do you reach the ordinary people all over the internet that think you’re out to cheat them just like everyone else always has? Even if I am successful given that penny stock investors and traders are usually impoverished (not bums, but impoverished compared to the rest of the stock market investors) how do you build a solid business off the poorest niche in all of finance?
The Solution: I grew my business by proving my own value; in November 2007, I opened a brokerage account at Thinkorswim with $12,415 (my initial Bar Mitzvah gift money account size) and stated I would repeat my feat of turning that into $1.65 million but this time detailing every trade and teaching people along the way on my blog TimothySykes.com.
Now after three years, that $12k account has grown to $162k, I am the #1 ranked trader out of 50,000 on Covestor…not quite at my goal…but I am trading conservatively to teach rather than take on too much risk. Since people could see how I was making money through trading, they wanted all kinds of educational products so I now have four newsletters and 12 DVD packages along with private coaching and an annual conference that was just attended by nearly 100 of my best students and other honest penny stock luminaries.
The Aftermath: Slowly but surely people began seeing my trades and blog posts explaining the trades and how the penny stock niche works and several thousand came to the conclusion that I was a good teacher and my strategy was quality enough to be worth paying for. It’s a long battle as corrupt promoters look to discredit me at every turn and no broker or media outlet wants to get involved because they don’t understand penny stock promotion the way I do.
I have even caught “reputable” sources like The Street and CNBC using paid for research from penny stock promoters and their commentators make people think this research is real while in fact it is straight up misinformation that inevitably leads to a short-term boost in stock price followed by a substantial drop. But slowly, honesty and transparency are causing a little stir in this niche and I am proud to be building something not only profitable but useful too.
The Lesson: If you do favors for others, the good karma and the memory of those good deeds will serve you well into the future. Do not turn away potential business just because you cannot figure out how to profit from it immediately. Make as many loyal connections and friends as you can and you’ll receive much in return in the long run.
Timothy Sykes, founder of Profitly, a site with over 4,000 traders sharing their performance openly, and Investimonials, a Yelp-like review site for 9,500+ financial products, author of “An American Hedge Fund”, is a stock trader, entrepreneur and teacher as he turned his Bar Mitzvah gift money of $12,415 into $1.65 million in 4 years.
The Young Entrepreneur Council (Y.E.C.) provides its members with access to tools, mentoring, community and educational resources that support each stage of their business’s development and growth. Our organization promotes entrepreneurship as a solution to youth unemployment and underemployment.