TIM SYKES: Once upon a time, as a hedge fund manager, I had a giant loss. I turned to drinking and reality shows. It was very strange, but that giant loss made me never want to take one again. Sometimes, a giant loss can help you see how the world is and prevent it from ever happening again.

CHARLES MIZRAHI: My guest today is Tim Sykes. Tim is a penny stock trader and teacher. He became a self-made millionaire by the age of 22. In high school, he used the $12,415 he’d saved from his bar mitzvah money to invest. Before he graduated, he turned that $12,000 into $125,000. Today, he’s earned close to $7 million in profits — all from trading.

CHARLES MIZRAHI: Several years ago, he established the Tim Sykes Trading Challenge. His goal is to teach aspiring traders how to follow his trading strategies and make money. To date, 21 of his students have become millionaires. I recently sat down with Tim to talk about how he turns average traders into millionaires and why philanthropy plays a major role in his life.

CHARLES MIZRAHI: Tim Sykes, thank you so much for being on the show. I’ve been looking forward to this for a long time. I think the last time I saw you was in 2015. You’ve dropped some weight. You’re looking good. You’re looking younger! And I know you’re definitely a lot richer. Thanks so much for coming on the show.

TIM SYKES: It’s an honor to be here. Thank you for having me on.

CHARLES MIZRAHI: All right. Last time we met, we spent some time in my conference room. I think was 2015. You were on Instagram, and I knew zero about Instagram. At the time, you were just taking pictures, snapping things and writing things. I think you had 50,000 followers. Get me up to date. How many followers do you have now — now that I know something about Instagram?

TIM SYKES: I’m up to 1.5 million followers. I had a tremendous growth spurt when I was posting stacks of cash in my cars. Then, I would have broke rappers steal the photos, and I would call them out. We would get in little beefs and featured on TMZ. I really kept growing.

TIM SYKES: I haven’t really grown in the past three years because I’ve switched it up. I sold all my cars. I donate any extra cash I have to charity. I now have 77 schools built with my charity. So, my priorities have changed. My social media has changed. I like to talk about what I think more people should do — even if that’s not as popular on Instagram.

TIM SYKES: The good news is my charity, Karmagawa, has been created. That actually has 1.2 million followers — out of the blue. We’re trying to get people to want to care about education, the environment and animals. It’s tough on social media. Most people just take selfies, and they’re trying to show their luxuries. It’s very influenced by Kim Kardashian and Kanye West. Frankly, I have different values. So, I’m trying to share those values.

CHARLES MIZRAHI: When we first met — I think I met your stepdad a little beforehand. He came to the office because I think he wanted a pastrami sandwich from one of the delis. We gave him one. He was really happy about that.

TIM SYKES: He gets angry if he doesn’t have a sandwich.

CHARLES MIZRAHI: I thought you were going to be some type of pain-in-the-ass guy — all full of himself. I remember he told us that you were never really into the cars and everything. You were putting on a thing. And then, when I met you, I said, “He’s a pretty down to earth guy.” So, I hear what you’re saying, and I’m so happy to hear that you found where you’re comfortable. I think that’s a really positive thing.

TIM SYKES: Yeah. I don’t regret the cars. It was a childhood dream. I grew up in a small town in Connecticut. It was a dream of mine to drive — let alone own these cars. And I owned all of them — the Lamborghinis, Ferraris and McLarens. I had a Rolls Royce. But when I got my second Lamborghini, I was shocked. I felt nothing. There was no adrenaline rush or happiness. I think you have to listen to yourself and say: “Wait a minute. Maybe you thought it was going to fulfill you, but it doesn’t. You have to move on.”

TIM SYKES: I know a lot of wealthy people who get rich, and they have all the toys in the world. But they’re still not happy. And then, they’re a little depressed. They think: “I’ve done everything. I should be happy.” But money can’t buy happiness, right?

TIM SYKES: For me, it was the challenge of buying the cars. I did it. I was proud to show it.

TIM SYKES: I’m proud to share it on social media because it inspires a lot of other people to study harder and chase their dreams. But now, I have a new challenge. Now, my goal is to build more than 1,000 schools. We’re roughly 8% of the way. So, I still have a big dream. But, it changed.

CHARLES MIZRAHI: You also got older.

TIM SYKES: Yeah. You live and figure out what makes you happy. Every time we open a new school, I try to attend. It’s been a little tough in the past year. But before COVID, I’ve tried to attend all of them. The communities all celebrate. It’s a beautiful moment, and it gives me tremendous pleasure. You have to do what makes you happy. And it’s my honor to share this on social media. I share my entire journey.

CHARLES MIZRAHI: Great. Hold on to the charity stuff because I definitely want to get into that. I’m excited about it.

CHARLES MIZRAHI: I remember when you first started it was called Pencils or something. You were building schools. What was that called?

TIM SYKES: It was the Timothy Sykes Foundation, but we donated to Pencils of Promise. We donate to different charities around the world. They actually build them. We just give them money.

CHARLES MIZRAHI: I love it. Hang on to all that because I definitely want to get into it. That is really sweet.

CHARLES MIZRAHI: When I first met you, you told me the story. I thought: “It can’t be. It’s too good.” You took $12,000 — and change — of your bar mitzvah money, and turned it into $125,000 by the time you graduated high school. Instead of chasing girls or trying out for the football team, you traded and made money. How did that develop?

TIM SYKES: I was a tennis player, but I got injured. I lost in the state finals during my junior year. Senior year, I wanted to win so badly. I over-trained. I was playing two or three hours a day. I was lifting two hours a day. It wasn’t regimented. I didn’t have a coach or trainer. I was doing it all myself. I overworked myself.

TIM SYKES: My dad called it the $1 million injury because I had Tommy John surgery on my elbow. I couldn’t do anything. I had two casts. With Tommy John surgery, you take something out of one arm and put it in the other arm. So, I was walking around school like Robocop, but I could still type.

TIM SYKES: The stock market was going crazy. This was 1999 and 2000. So, it was the right place and the right time. I had already [been accepted] into college [through] early admission. I didn’t really have to try in school. So, no tennis and school. The stock market was in my face every day.

TIM SYKES: At first, I was an investor. I had Viacom, Supercuts and Boston Celtic stock. Those were my first three stocks. My $12,000 would go from $12,400 to $12,300 to $12,500 month over month. I thought: “This is so boring!”

TIM SYKES: I gravitated toward lower-priced stocks — penny stocks — which the whole world hates. But they were going crazy. I started trading them and noticed some patterns. I didn’t cash in on any one play. I usually sold too soon.

TIM SYKES: To this day — more than 20 years later — I still sell too soon. But I’m trying to profit from the volatility. Over the past six or nine months, we’re seeing — as we film this in early 2021 — a very similar, crazy OTC market to the one we had back in 1999 and 2000. So, I was in the right place and time.

TIM SYKES: Right now, I’m actually having record profits, too. Although, I now donate all my trading profits to charity and make video lessons.

TIM SYKES: Back then, I had no discipline. I would have a 50% winner and then a 50% loser. I’d have a 70% winner and then a 30% loser. It was all over the place.

TIM SYKES: Now, rule No.1 — that I’ve learned over 20 years — is cut losses quickly. I don’t have the 70% winners anymore. I have much smaller profits. But I also have much smaller losses and less frustration. Even in my trading journey, I’ve grown to be more conservative. That’s something that happens over time.

CHARLES MIZRAHI: After you made this money in high school, you went on to college and started a hedge fund. That didn’t do too well after a while, right?

TIM SYKES: Yeah. My strategy with penny stocks is good for small accounts. I didn’t realize the limitations. I didn’t know about scalability. Again, I’m all self-taught. No one teaches you to trade penny stocks. No one wants to. So, I didn’t know what I didn’t know.

TIM SYKES: I was just a cocky kid who made a lot in high school. I graduated college and made nearly $2 million. I thought that if I could if I could turn $12,000 into $2 million, I could turn $2 million into $2 billion. That was not quite accurate with penny stocks.

TIM SYKES: I’ve always been able to do well with a few thousand dollars or a few thousand shares. And it adds up. But that’s very small compared to the hedge fund world.

TIM SYKES: In my hedge fund, we got up to $3.2 million. But it wasn’t moving the needle. I was the No.1- ranked short bias fund, but it was small dollar amounts. So, I went for a home run. I invested in my best friend’s dad’s company. It was an online ticketing company and had great technology.

TIM SYKES: But I’ve learned that just because you have a good technology it doesn’t mean that the stock is good.

TIM SYKES: They were weighed down by debts. Management got thrown out. They declared bankruptcy. My hedge fund lost almost a third. So, I learned not to believe in companies. I learned how non-scalable my strategy was and how to cut losses quickly. I had success. But while I had success, I still had losses along the way. The losses have now made me a better trader.

CHARLES MIZRAHI: Take me there. So, you had the hedge fund. How old were you at the hedge fund?

TIM SYKES: I started in my senior year of college. But it took four years. It was three years of doing nothing. And then, in the fourth year, we lost a third. Overall, we finished at 2% per year over four years.

CHARLES MIZRAHI: So, you’re 23 or 24 years old. Your dream of turning $2 million into $2 billion has a couple of roadblocks. It’s not easy.

CHARLES MIZRAHI: Believe me, back in ’98 and ’99, we had great years managing futures — and we got 20% of the profits. So, I started doing some calculations. I should have been as rich as Buffett by now. But it’s never linear. It goes great, and then boom. Then, you start to figure it all out again. It’s fun to do it while it’s working, but it’s really tough. How did you pull yourself out of that?

TIM SYKES: I started drinking heavily. I was really depressed for several months. I got offered a reality show. None of my investors were asking for money back because we were still up. But I was depressed because I learned that it wasn’t scalable. So, it wouldn’t have mattered if I continued as a hedge fund. I did the reality show against everyone’s advice. Because I was a drunk in every episode, it turned out to be a hit. It was called Wall Street Warriors.

CHARLES MIZRAHI: What did you mean you were a drunk? You were really hitting the bottle that hard?

TIM SYKES: I was. I was really depressed. My dreams were up in smoke. Fortunately for me, the reality show called. I was still trading. Aside from the big wins and crash, I could still make $2,000 or $3,000. So, I always had my small gains. But in the hedge fund world, that was meaningless.

TIM SYKES: So, I’m trading after the market closes, and I start drinking. The reality show calls and offers me a spot. I say: “Why not? I have nothing to lose.” I try to be entertaining on the reality show.

TIM SYKES: For example, we played golf in one episode. Golf — on TV — is pretty boring. I decide to spice it up. I start drinking, and I purposely hit the ball into the water. I jump in. They’re filming me, and I just find a ball. I go down to the bottom of the pond, and I find a ball. I say: “This is my ball!” And the reality show becomes a hit. Everyone says: “Hey, I want to learn how to trade.”

TIM SYKES: So, I had the choice. Do I continue running a hedge fund? Again, I can make my $2,000 or $3,000 a day. It adds up to maybe a few hundred thousand per year, but it’s nothing in the hedge fund world. Or, do I take advantage of this reality show and people wanting to learn?

TIM SYKES: I said, “Let me let me close down the hedge fund and get into teaching. It sounds crazy because most people who teach finance are snake oil salesmen or [people from] hedge funds. This is the biggest-earning industry in the world.

TIM SYKES: But I knew my limitations, and I saw an opportunity. When most teachers were fake, all I had to do was be real. So, I got into teaching.

CHARLES MIZRAHI: How did the reality show find you?

TIM SYKES: I was on CNBC. I was in Trader Monthly’s top 30 under 30, so I was rewarded. And that was what was so weird. Back then, hedge funds weren’t allowed to share their performances openly. So, I was the No.1-rated fund for three years. There was a delay in reporting that. Trader Monthly saw that I was No.1. I was in the top 30 under 30. What they didn’t know was that while I was on CNBC, I had basically lost all of the gains from the past three years. So, I was getting rewarded on TV — in my first CNBC interview — and I was drunk. I could barely see the camera.

CHARLES MIZRAHI: Wow.

TIM SYKES: It was a very strange world in which I was getting rewarded. But I knew that my hedge fund wasn’t doing that well and that my strategy wasn’t scalable. So, it was a very strange time.

CHARLES MIZRAHI: It must have been surreal. You’re on there. They’re talking about how great you are, but you know that you’re being torn apart.

TIM SYKES: I couldn’t say anything. You weren’t allowed to talk about your performance back then — good or bad. It was annoying. I also got into teaching not because I thought of a good business opportunity but because I wanted to share everything. I was so boxed in that I couldn’t talk about my losses. I couldn’t talk openly. So, I said: “Let me just close down the hedge fund so I can teach. This shouldn’t be happening. I shouldn’t be like regulated.” Now, you can say whatever you want. But twenty years ago, there was severe regulation.

CHARLES MIZRAHI: What drove you? Why did you want to teach? You found a way to make money, and you would have done great — even if you didn’t have a hedge fund. Even if the hedge fund closed, you still would have been able to make money. What motivated you to share this? Most of the guys that I knew on Wall Street used to lock their desk drawers. They didn’t even want you to borrow a pencil. They didn’t want to give you any part of their lives. Why were you so open?

TIM SYKES: I think it was more than just the money. It was my blood boiling. I had always made money by short selling penny stocks. So, I saw all the scams and said: “No, these are scams.” Then, when I was on a TV show — even though people said they wanted to learn — once I started saying, “I’m betting against scams. I’m short selling penny stocks” people said: “No, that’s illegal!” And I said: “It is legal. I’m using E-Trade. I just hate misinformation.”

TIM SYKES: For me, it wasn’t even a choice. My blood boiled every time someone said: “You’re a criminal. You’re illegally shorting.” And I just said: “Let me teach this. Let me talk about my performance — good and bad. Let me talk about my losses and gains.”

TIM SYKES: I think that any business that’s based on like the truth is going to succeed when there are regulations. So many people don’t have guidance. I saw the opportunity. And it wasn’t about the money. I thought: “I need to do this to cleanse my soul.” It was like a confession. For me, teaching was my confession.

CHARLES MIZRAHI: You were really on a mission. Back in the early 2000s — just to keep our listeners up to speed — they used to have these pump-and-dump schemes. The IR companies used to spend so much money pumping up these penny stocks — which were virtually worthless. They got the public in. They sold shares at the top and moved away. All these innocent people bought, and then it would plunge. You were going out and attacking them by short selling the stocks. Many times, they would spend millions of dollars promoting a stock, and the stock wouldn’t rise. It would go down. That was because of guys like you.

TIM SYKES: Yeah. Again, I was shorting small-size. I wasn’t causing the drop.

CHARLES MIZRAHI: You were pretty vocal back in the day. If I remember, you were out there saying that these things were scams. Nobody was calling them scams.

TIM SYKES: I was very vocal. But the problem was — and this was another reason for my lack of scalability — there weren’t that many shares to short. I would write a blog post and be vocal about it. And I would short 5,000 shares and make around $5,000. I met a few of these promoters a few years later and they said: “You cost me $20 million. You cost me $50 million.” And I said: “Yeah, I made like $3,000 shorting your stock.

CHARLES MIZRAHI: Did any of these guys ever threaten you with death or anything?

TIM SYKES: I got a few death threats. But again, I wasn’t saying: “Lock them up.” I said that there were always going to be promoters — and there still are.

TIM SYKES: Today, it’s moved on to crypto. There may not be mailers anymore, but there are a lot of Discord chat rooms and social media and WhatsApp pumps. I think there are always going to be pumpers. I’m not a lawyer. I don’t want to get into whether they should be in jail or not. I think it’s wrong. But at the same time, there will always be someone. For me, education was another answer. I thought: “How do you protect individual investors through education?”

TIM SYKES: They’re always going to get pinched by promoters. Most people are just not financially proficient enough to know that they’re getting involved in a pump. But if I can educate, then I can theoretically help them.

TIM SYKES: Some people said: “Tim, if you educate everyone, and there are no more pumps, you’ll be out of business.” And I said: “Fine!” I missed my college graduation for a trade. So, that was another reason why I got into teaching. I said: “Let me put myself out of business. This is a gift in the curse. Yes, I’m making money more times than not. I can’t say no to these trades because I know that they’re going to crash. They have very high odds, and they’re kind of stealing my life away from me.” So, those were very interesting conflicts. Talking about it openly was my therapy.

CHARLES MIZRAHI: I don’t think you’re ever going to be out of business. There are always going to be great promoters, and there will always be suckers. Hook, line and sinker.

TIM SYKES: That’s the reality. It’s now a dozen or more years later. I’ve been teaching. I have 3,000 blog posts and 7,000 video lessons. I try my best to teach people, but a lot of people are falling in love with junk — as always. It’s just greed.

CHARLES MIZRAHI: Right. It’s human nature. So, how do you start teaching? What do you do? Do you put a blog post out there?

TIM SYKES: I wrote a book called An American Hedge Fund. I thought I was going to be a best seller. I thought: “This is the American dream story!” It totally bombed. I actually have my book right here. This was not planned. I just looked. This is my first book. It was just sitting here. What a crazy coincidence! It was my promotion of the book that created my whole social media [presence]. Because how [else] do you promote a book?

TIM SYKES: Wiley offered me $35,000 to publish it. But then I started doing the math. I thought that it would be better to self-publish. So, I created my own publishing company. How did I promote the book? I created TimothySykes.com — my blog. I got on Twitter. I wasn’t even on Instagram early on. I was just talking about my strategy. Again, I was in this cage of regulations as a hedge fund manager.

TIM SYKES: Now, I’m not a hedge fund manager anymore. I can say whatever I want. So, I wrote the book.

CHARLES MIZRAHI: You were running free and naked, man. It was like you were in a straitjacket.

TIM SYKES: It was beautiful, you know? It was like releasing an animal into the wild.

CHARLES MIZRAHI: I hear you.

TIM SYKES: The book might have bombed, but I fell in love with teaching on social media.

TIM SYKES: The book is the same book that I wrote more than 15 years ago. Social media is constantly updating. That’s better for me as a teacher. My first website didn’t even have a chat room. Now, we have chat rooms, and we talk about our trades and commentary. Back then, there were no chat technologies available. A chat was me writing a blog post and people leaving comments underneath it. You’d have to refresh the blog post to see the next comment. It was crazy. And then I built my first chatroom. It was step by step.

CHARLES MIZRAHI: So, when you first started teaching, was there a line at your door or did it take time to develop?

TIM SYKES: I was fortunate. I’ve always been very lucky. I feel like I’m the Jewish Forest Gump. It’s kind of crazy. Things just happened to me.

TIM SYKES: There was a website called Covestor where you could upload your trades. They would tap into your brokerage account and verify them. I thought: “This is perfect. Let me show them that I’m real.” In an industry where 90% of traders lose, no one’s really sharing their performance. All the bloggers joined Covestor. This was the beginning of financial blogging. And I became the No. 1 trader or financial blogger on Covestor — out of 60,000 users. I went back to my initial $12,000. I was making video lessons, and I was showing people how to grow $12,000.

TIM SYKES: Within 2.5 years, I grew $12,000 to $250,000. That’s not huge money — according to hedge funds or Wall Street — but a lot of people have $12,000. A lot of people would like to grow their fund like that. So, I showed everything. I became No.1. There was a time where, if you Googled Covestor, my name would come up first because I showed all my trades and was No.1.

CHARLES MIZRAHI: What were you doing? Were you shorting penny stocks or going long?

TIM SYKES: It was a mix. The majority of the time, I was shorting. But now, as we’re doing this in early 2021, I haven’t shorted in months. It’s crazy in this bull market.

CHARLES MIZRAHI: Smart move.

TIM SYKES: Yeah! Back then, I was shorting and going long.

TIM SYKES: When these pumps crash, they usually drop 40% to 70% in one day. Then, they bounce the next day. The promoters tend to support them so that there’s no investigation. So, you get 40% to 70% crashes, then 40% to 70% bounces the very next day. To this day, I still love buying pumps as they crash.

CHARLES MIZRAHI: When you were teaching your subscribers, you were showing them how the game was played — from your perspective. You kept showing them patterns that continually developed, right?

TIM SYKES: Yeah, exactly. I have all these video lessons, DVDs and watchlists — all focused on when the pump is going to crash. There are signs. When the volume starts receding…

TIM SYKES: Back then, I signed up for all the different promoters’ email lists. When they stopped sending out promotions, the budget was exhausted. Then, the stocks would crash. It’s like a jet plane with no fuel left. It’s not a question of if. It’s a question of when. And then, I would either try to short it, dip-buy it or both.

TIM SYKES: In terms of the masses, you were bringing in a lot of people. If I recall, you were very transparent. You showed them everything. Weren’t you concerned that there would be more people doing the same trade — cutting out your profitability and everyone else’s?

TIM SYKES: Yeah, 100%. From the get-go, I thought that that was a potential repercussion of teaching — where everyone would do the same thing, and there would be no more opportunity. But again, I would be a successful teacher, and I wouldn’t have to trade. So, I would kind of fix my addiction.

TIM SYKES: But it turns out it’s kind of like putting oil in water. You can try to kill the oil, but it just creates new bubbles and patterns. I’ve also learned that people trade differently. I can give them the exact pattern I use, and they’ll see it in a different way. It’s no different than if you’re trying to be a great chef, and the chef gives you the exact instructions. You might not make the perfect recipe like that. Everyone’s a little different. Frankly, I have fans who like my strategy. I have doubters who like to bet against me every time I make a trade. I say: “You’re welcome to do whatever you want.”

TIM SYKES: I don’t encourage anyone to follow anybody. I think that you should learn the patterns and rules and see what works best for you.

TIM SYKES: Right now, I don’t short sell because I’m scared of these squeezes. It’s frustrating to find shares to short. You have to wake up earlier. I’m traveling a lot. But I know a lot of my top students only short sell. And that’s fine. Trading is wide open. This game is much bigger than anybody realizes, and there are so many different opportunities. But you have to find what works best for you based on your own strengths and weaknesses.

TIM SYKES: I didn’t realize that in the beginning. I said: “Here’s the pattern. Here are the rules. This is the way it’s done.” After a decade of teaching, I just share my stuff, and people can react.

CHARLES MIZRAHI: So, you give your subscribers a foundation — a framework of how to think about markets and stocks. And if they want to add a little crinkle onto it, you have no problem with that. You’re basically telling me that that creates an enormous amount of opportunity because they can apply it to something else — or, they may not see it the same way. Everyone’s happy.

TIM SYKES: Yeah. I was just in Dubai with one of my first students. He invited me out to Dubai. He was buying a yacht. He used my patterns on crypto. He stunk as a penny stock trader. But now, he’s made hundreds of millions of dollars by using my patterns on crypto. I don’t trade crypto, but it has worked for him. That’s beautiful to me because I didn’t anticipate that. But it works for him, so that’s cool.

CHARLES MIZRAHI: OK, so when we first met, I remember you and your partner Zach were all excited because you just got one new guy who became a millionaire. This was back in 2015 or 2016. It was 2015, right?

TIM SYKES: Yeah! I got started teaching, and it took a few years to create $1 million.

CHARLES MIZRAHI: How many of your students have become millionaires? Three? Five?

TIM SYKES: So, 20 guys and one woman. So, 21 students have crossed over $1 million. Some have gone over $2 million, and some over $10 million. It’s all over the place! But it’s really gone up the past six months with this OTC bubble and all this stimulus check-funded volatility. There are more and more people trading than ever before. And it’s just gotten insane. It’s like in 1999 and 2000.

CHARLES MIZRAHI: What happens when the markets go down again? Because they eventually will. Trees don’t go to the sky, and things will change. Will these patterns still be as valid? Will these methodologies still work?

TIM SYKES: I don’t know. We’ll see. I try to just react to the patterns. Frankly, I’m long overdue for a vacation. You see my hair. I haven’t even had time to get a haircut. We’re filming this in early 2021, and it has already begun to slow down compared to January and February.

TIM SYKES: February was peak mania for OTCs. March and April have been much slower already. The market ebbs and flows. If the patterns stop working, fantastic. I think that there are always going to be small companies and promoters hyping up the news. Now, you have crypto. Again, I don’t trade crypto. I want to be very clear about that. I have imposters and impersonators on social media who say that they are Tim Sykes and they trade crypto.

TIM SYKES: I would love to trade crypto, but I don’t want to stay up all the time — because it’s 24/7. And I don’t want anyone thinking that these impostors are me. Unfortunately, crypto is very underregulated. Penny stocks are like the Wild West. Crypto is like the wild, wild west. I just don’t have time for that. But I’m glad that my patterns work in it. It is what it is.

CHARLES MIZRAHI: These people come to you, and they’re just regular people, right? They don’t come with big bank accounts.

TIM SYKES: Correct.

CHARLES MIZRAHI: What are they starting with?

TIM SYKES: My average student starts with $2,000 to $5,000.

CHARLES MIZRAHI: And then they build up their profits and get to the stage where they make serious money?

TIM SYKES: Yeah. The last dozen or so students have started with $2,000 or $3,000. They grow it into $5,000, $10,000, $20,000 and $30,000. They start to like see that they can grow it exponentially. Then, they add $20,000 or $30,000 so they can get to $50,000 or $60,000. That way, they can take bigger positions. So, it’s a step by step [process]. A lot of people sign up with me, and they’re not even sure. But they’re willing to give me a chance.

TIM SYKES: Once they start seeing the plays in real time and start thinking: “Wait a minute. There’s something here,” they get more confidence. They usually add on a year or a year and a half to their journey once they get experience. I think that’s good. Like I always tell people: “Whether you believe me or not, start small. Paper trade. Start to witness this volatility.”

TIM SYKES: I don’t mind if people don’t believe me. My first millionaire student actually wrote a blog post that said: “Timothy Sykes is full of B.S.” We went back and forth in the comments. I always respond to my haters. This is the beauty of full transparency. He gave me a chance. Now, he has over $2 million, and he’s my chat room moderator.

TIM SYKES: So, I don’t mind the skepticism. You should be skeptical of anybody on the internet who claims: “I have this magic strategy.” I just share my wins and losses. I still lose 30% of the time, but rule No.1 is: cut losses quickly. I like showing the process. You don’t have to believe me. This isn’t blind faith. This is me teaching my process day in and day out — no matter where I am.

CHARLES MIZRAHI: What is the No.1 reason why students are not successful?

TIM SYKES: Industry stats say that 90% of traders lose. I would say the majority of anybody’s trading students — or anybody in the trading industry — lose because they don’t take it seriously. They think: “I’ll throw some money. It’ll be fun. It’s like Vegas.”

TIM SYKES: But trading is all about discipline. It’s not you versus the market. It’s you versus you. So, when I say rule No.1 is to cut losses quickly…

TIM SYKES: I have a lot of 2% to 5% losses. Sometimes, I get unlucky. Sometimes, the stock is halted and I lose 20% or 30%. But very rarely will you see me take the big losses that undisciplined traders take. They lose all the time. They’re very similar to how I was in the beginning — where I would lose 20% to 50% because I didn’t want to take the 2% or 3% loss. Discipline matters. Patience matters, too.

TIM SYKES: Like you said, because the market has been so hot, it’s not going to last forever. Sometimes, you have to pull back. Trading is always about adapting and modulating. People can’t handle that. It’s their ego. It’s their stubbornness. We’re taught that if we win gradually or consistently, we can think of it as a job — like we’re getting paid weekly or bi-monthly. That’s not true with trading!

TIM SYKES: I’ve already made nearly $1 million in just the first few months of 2021. But in the past few weeks, there have been very few opportunities. I’m basically breaking even. That’s trading. You have to be willing to push on the pedal when you’re hot, and take your foot off the pedal when it’s not. A lot of people just don’t think like that. A lot of the lessons are counterintuitive.

CHARLES MIZRAHI: Right. Who are the majority of your students? Are they young people? Old people? All over the map? Male or female? What’s the typical demographic?

TIM SYKES: They’re all over the map — but by and large, male. It shouldn’t be. Statistics say that females are actually better traders. But I still think there’s an assumption that this is a guy’s game. But it shouldn’t be. The internet democratizes it all for everybody. But mostly young people, and mostly guys. A lot of them have seen my reality shows now. They see me on TV. They see me on social media. Social media is geared toward younger people. I’ll teach anybody, but those are the demos.

CHARLES MIZRAHI: How are you teaching them? Explain that to me. How does that process work? You have thousands of students. I sign up. You don’t have time to spend with me alone, right?

TIM SYKES: Correct. I don’t spend time with anybody alone. I’m not a financial advisor. I’m just putting out watchlists and video lessons. You see my screen on webinars. I donate all my trading profits to charity. I’m trying to teach you the process. If I do a trade, it’s not out of the blue.

TIM SYKES: Usually, the stock was already on my watchlist pre-market or the night before. I say: “If this stock breaks this level, I’m going to buy it. I’m looking for this pattern.” I link to a blog post. I link to a video lesson. I link to a DVD. I try to show people my plan ahead of time.

TIM SYKES: Then, if and when the stock acts the way I think it will, I execute on that plan. Again, I do watchlists, commentary, trade alerts, video lessons, DVDs, software, chat rooms — so many different things. I just try to get whatever I’m thinking out into the world.

CHARLES MIZRAHI: So, you donate all your profits to charity. How are you making money? Do you charge for membership or services?

TIM SYKES: Yes. We have membership fees so people can choose their dedication levels. You can choose watchlists and alerts only. You can choose video lessons. You can choose my trading challenges — my premium coaching — where you get two, three or four live webinars a week. They’re not just from me. Now, my top students are also giving back.

TIM SYKES: So, we have this whole community. And you have access to all the archive webinars. You don’t have to spend a dime. I have 1,500 free videos on YouTube. Everyone can choose how they want to learn. I just keep creating content every day based on what I see — good or bad. After this podcast, I want to make a video lesson on how I’ve made $3,000 today.

TIM SYKES: There were four trades, — two wins and two losses. But I cut my losses quicker. The gains were bigger. So, the net was $3,000.

CHARLES MIZRAHI: So, tell me: How did philanthropy evolve from this? How did it become such a big part of your life?

TIM SYKES: It’s always funny the way these things begin. My friend Neil built a school in Cambodia. Neil and I have always been competitive. I said: “If Neil’s building a school in Cambodia, then I’m going to build a school in Cambodia.” So, I got in touch with the charity. I built a school that’s three times the size of Neil’s — right next to his. I went to Cambodia. He doesn’t even like to travel. So, I went to Cambodia with my iPhone. I said, “Neil, here’s your school.” I showed a little school. And then I had all the kids stand in front of my school — and they were all cheering. Then, I said: “Here’s my school, Neil.”

TIM SYKES: He didn’t like that. And that was funny to me. But a funny thing happened when I was being a competitive dick in Cambodia. I loved it. I loved going to a Third World country and experiencing everything. I was always a traveler. Even before I was a hedge fund manager, I loved traveling.

TIM SYKES: But traveling to Third World countries is very different. I’m not just chilling in the pool with a piña colada. I’m visiting these communities, and many of them have nothing. So, I’m hugging these kids, and it’s a beautiful thing.

TIM SYKES: I started getting obsessed, so I built one school. Then, I built two more schools in Nepal. I built a school in Bali. These were all Third World countries where they’d never even seen white people before. So, I visited them and learned about them. They were so appreciative of finally having the chance at education. Then, I started getting competitive with myself. My goal was to build more than 1,000 schools, so I started donating my trading profits.

TIM SYKES: This is actually charity merch. I have apparel, and we donate all the profits to charity. We now have fundraisers on Facebook. Last year, we raised $1 million — just with our social media following.

TIM SYKES: So, I was just trying to help the world through schooling. But as I started going to a lot of these countries, school was a multi-year, multi-decade effort for change.

TIM SYKES: As we visited a lot of these countries, I started seeing a lot of things that were more urgent — like the coral reefs and the situation with poachers and endangered species. Along the way, we started donating to animal sanctuaries and charities that protected endangered species. I did a documentary in South Africa on the rhino poaching crisis — which people don’t even know about. Do you know about the rhinos?

CHARLES MIZRAHI: Not much.

TIM SYKES: Rhino horns are made of keratin — the same thing that’s in our fingernails and hair. But there are these myths out there that rhino horns can cure cancer, and it’s an aphrodisiac. Again, it’s misinformation. Misinformation follows me. My blood starts to boil, and I just have to get good information out there.

TIM SYKES: Rhino are going to be extinct — at the current rate — in the next decade or two because we’re killing them for these horns. People think their horns cure cancer. They don’t. So, we’re killing an entire species specifically based on misinformation. I had to do a documentary on that, and we talked about it quite often.

CHARLES MIZRAHI: What did your charity do for that?

TIM SYKES: We donated $250,000 to DePaw. Then we did a documentary featuring a bunch of other charities like the Rhino Rescue Project. We donated all the profits from that documentary. We asked for donations at the end of it. We created merch with rhinos on it. And we raised nearly $1 million for those charities.

TIM SYKES: I’m always trying to educate and get people to give back. The crazy thing is that a lot of these schools in Nepal, Bali or in Guatemala [cost] $25,000 or $50,000 [to build]. Those aren’t huge amounts to those of us in the First World.

CHARLES MIZRAHI: First of all, how do you find these locations? Do you do this? Or, do you have someone on the ground do that for you? If I want to donate a school, how I go about doing it?

TIM SYKES: There are always local charities. The Cambodian Village Fund built the schools in Cambodia. We also built a soccer stadium because the town wanted that more than the school. That united three towns. That was cool. Pencils of Promise has built over 500 schools, so I donated over $2 million to them. They built schools in Guatemala, Ghana and Laos.

TIM SYKES: I went to Laos and saw the community and all of that. I’m not personally building. I just donate the money to these charities. The charities have local contacts, and they get it done. Although, the pandemic has slowed down construction considerably.

CHARLES MIZRAHI: You’re basically leveraging your talents, finding these organizations, giving them money and they’re turbocharging things.

TIM SYKES: Yeah, 100%. I run the social media accounts for Karmagawa — which is my charity — and then Save the Reef was an offshoot. We learned how endangered coral reefs were.

TIM SYKES: I don’t even like going underwater. I just found out how coral reefs are so important to marine life. There’s a whole ecosystem that impacts our planet. And we’re killing coral reefs everywhere with the way that we treat marine life. If there’s one drop of the chemicals in sunscreen — in an area the size of an Olympic sized swimming pool — all the coral reefs die. Think about that. People in Hawaii, or any beach town where you wear sunscreen and go in the water, all the coral reefs are dead. We don’t think about it because we don’t see it. It’s underwater. But it’s going to have some devastating consequences in the coming years, unfortunately.

CHARLES MIZRAHI: What is the name of your charity? Karmagawa?

TIM SYKES: Yeah. It was the Timothy Sykes Foundation, but I got kind of weirded out when all these schools and buildings said “Tim” on them. I know most rich people need that for their egos. I need less ego. I wanted to get away from that. I already had enough of an ego. I took on a partner in Karmagawa. His name is Mat Abad. He’s a great photographer.

TIM SYKES: I wanted to donate but also take photos and share the story of this. We really clicked. We wanted to change the world. He grew up in the slums of Manila, so he’s had an amazing run from growing up very impoverished. Now, he’s one of the best photographers I know. So, we changed the name. And I took him on as a partner in this charity.

TIM SYKES: “Gawa” in the Filipino Tagalog language means “to do” or “to make.” It’s basically like we’re making good karma by donating and teaching people about this. He takes all the photos. And now we have a ton of photographers and videographers who come on our trips — or did before the pandemic. We make documentaries and try to share the story to get more people to donate.

CHARLES MIZRAHI: You’ve taken in all the talent and skills you learned. You built your business and social media. You were doing it that way before anyone I knew — in a big way — and were successful at it. People were doing it, but they weren’t monetizing it. You were monetizing it pretty early on. I remember that I was very impressed with you — back in 2014 and 2015 — because you not only used social media but also found a way to monetize it and leverage your talents. I thought that was pretty cool.

TIM SYKES: Thank you!

CHARLES MIZRAHI: What I’m hearing is that you’re using the same [strategy] for charity. You’re taking these charities and you’re putting a face, story and pictures to them. You know how to do that right.

TIM SYKES: The charities are great for building schools. They’re great at what they do. They’re great at helping animals. They’re not great at telling their stories. They’re not great at social media. So, we’re trying to aid them. Now, I have quite a lot of experience. We donate and give them exposure. It’s my honor to use my skillset for good.

CHARLES MIZRAHI: That’s great. That’s absolutely great. Where do you see Tim Sykes five years from now?

TIM SYKES: Hopefully, I’ll have more millionaire students and charities. I don’t know if we’re going to reach 1,000 schools in five years, but we’ll get closer. We’ll definitely be in the hundreds. It’s just one student, school, community and documentary at a time. I’ll just keep going because the world needs a lot of help. Students need a lot of help, unfortunately.

TIM SYKES: I get a lot of students after they get scammed — whether they’ve lost all their money at crypto or penny stock. They start Googling, and then they find me. They see a blog post that I wrote six or nine months ago — warning them. But they didn’t see it at the time because they didn’t believe me. Then, they become students. So, I have a lot of students who are broke. They’ve lost everything. But at least now they can use the lessons from their losses.

TIM SYKES: Remember: Once upon a time, as a hedge fund manager, I had a giant loss. I turned to drinking and reality shows. It’s very strange. But that giant loss made me never want to take one again. Sometimes, a giant loss can be helpful in helping you see what the world is and prevent it from it happening ever again.

CHARLES MIZRAHI: You just keep evolving and getting better and better. I hope to see it more often than once every five years. I have to stay in touch with you about all this charity stuff you’re doing because I think it’s absolutely astounding. It’s just amazing.

TIM SYKES: Thank you! Much appreciated.

CHARLES MIZRAHI: It’s just amazing. Trading and making millionaires are great. But leveraging that pool of people you have and using it to do good … I don’t think there’s a better reward than that.

TIM SYKES: It’s my honor. That’s why I love talking about this stuff. Some people say: “Just do charity. Just give on your own.” No! We’re going to use social media to amplify all of the charity’s efforts. This is how they get funding. This is how they get awareness. I should have mentioned that right now, we have 26 schools — specifically in Bali.

TIM SYKES: Because we’ve gone so many times, we bring influencers. We talk about the schools. We show it in our stories and photos. My social media followers have built another 16 schools. It’s pretty cool that people think: “Wow. I have an extra $25,000 or $35,000” — depending on the community. And they ask: “How do we get in touch?”

TIM SYKES: I put them in touch with Bali Children’s Project or Pencils of Promise, and they donate. That’s how we get things done quicker. The whole way of nontransparent trading and charity is for the Stone Ages.

TIM SYKES: Now, you have to evolve. Let’s use [social media] to further education and giving and get everyone to do right and help each other. This is an especially tough time for a lot of people. We should give back. We should care about each other more. I don’t think it’s a coincidence that social media has evolved to the point where we can spread so much information so quickly. We just have to choose some better information. A lot of social media is just garbage and negativity. Let’s use it for education. Let’s use it for positivity.

CHARLES MIZRAHI: Are you doing anything in the United States in terms of your charities?

TIM SYKES: Yeah, we’ve worked with the Boys and Girls Club. We built a library in Michigan. We’ve helped the homeless in L.A.

TIM SYKES: We’re trying to do a lot more. Again, the pandemic has really set things back. But we’re working on a documentary about depressed people in Los Angeles. And we’re working with a few different charities because depression is a big thing. I’m also working on a new documentary that shows how education is so important in Third World countries.

TIM SYKES: I think that when we show that documentary — when people start saying: “Wait a minute. This is how people are living in Third World countries” — I think they’ll be more grateful for their lives in the First World.

TIM SYKES: Obviously, quarantine and the pandemic stink. But we can have Netflix. We have entertainment in our homes. We can Zoom with our relatives. We have UberEats. This isn’t that bad — especially compared to the Third World. And unfortunately, as we’re filming this, the Third World is not getting vaccinated any time soon. It’s much slower. There are very devastating numbers coming out of almost every Third World country. And we’ve just begun to see the consequences. I think it’s going to be really tough for a lot of the world in 2022 and 2023.

TIM SYKES: We’ll try to help everyone. But I’m aware that even though I’m wealthy, I’m not wealthy enough to help tremendous amounts of people in America. One school in America would probably be 20 elsewhere. I’m trying to maximize my use. I think that too many people don’t really understand what’s going on in Third World countries. No one’s really talking about it — especially now that tourism is pretty much dead.

CHARLES MIZRAHI: Tours and the environment are things that are just not being focused on it. Everyone talks about global warming and big topics like climate change. But you’re getting down to the boots-on-the-ground stuff — like coral and rhino poaching. These things are possible to fix. And it doesn’t take much.

TIM SYKES: This stuff is all connected, too. We don’t realize it. I think that the one good thing this pandemic has shown us is that we’re all on the same planet together. What happens in Asia affects us in America.

TIM SYKES: What happens in other countries affects us. We can no longer say: “We’re isolated. It doesn’t matter about anything else.” People don’t even realize that we ship all of our trash and recyclables to Third World countries and Asia.

TIM SYKES: China used to take a lot of our plastic and recyclables. China closed its borders to the U.S.’s recyclables. Recycling is a devastating problem — which has gotten so much worse in the past year with everyone ordering UberEats and Amazon packages. It’s really going to impact us.

TIM SYKES: And the plastic doesn’t disintegrate. It’s just building up.

CHARLES MIZRAHI: How about all the sea animals that are eating when the plastic does break down? They found these whales with 50 to 60 pounds of plastics in them.

CHARLES MIZRAHI: Right before the pandemic, the thing was eliminating plastic straws. I went on a Jet Blue flight during the pandemic. And they give you a large Ziploc bag of water, a napkin and some chips. I said: “This is some huge bag. And just a couple months ago we were just fighting over straws. What am I supposed to do with this after? Can I give this back once I’m done?” And she says: “No, we can’t take it back.” And I say: “So, this is going to end up floating in the Pacific Ocean somewhere?”

TIM SYKES: And then we eat a lot of the seafood. So, we’re eating the plastic with the chemicals. It’s all connected. The crazy thing about the straws is that the reason why there’s such an uproar is because there was one video with a turtle in the straw. I pulled it out. I actually met the lady. She’s down in Costa Rica. She’s a marine biologist. That video has gone viral. So many people write into places like Starbucks and different companies saying: “We don’t want straws.”

TIM SYKES: Starbucks got rid of the straws. Unfortunately, the company came up with a new straw-less plastic cup where there’s only nine percent less plastic than before, but there are no straws. So, people think that they fixed the problem. In reality, the cups are just as bad. We have to confront this. We can’t just try to manage it and say: “No straws, so no complaints now.” Again, education. People don’t know how bad the plastic situation is.

TIM SYKES: We’re working on a new documentary. Hopefully, your audience and my audience will share it. We want people to watch this stuff, share it and spread awareness. Whenever you can, try to say no to plastic. I know it’s annoying, but if we all do little things, it’ll add up over time.

TIM SYKES: Right now, seven or eight billion people are using plastic every day. Very few people are saying: “Oh no. There are some consequences to this. And unfortunately, five, 10 or 20 years from now, we’re going to wish we could come back to this moment and do things differently.

CHARLES MIZRAHI: I recently saw this documentary on Netflix about the sea.

TIM SYKES: Seaspiracy.

CHARLES MIZRAHI: Yeah. Wow. We usually eat salmon on Monday night. I told my wife: “Just make me pasta. This is crazy!” What got me was that the straws were like 0.4%. The big things were the fishing lines that nobody was talking about.

TIM SYKES: Yeah, exactly. These are the things that we have to confront. If consumers start talking about this and demanding changes, companies will be forced to. A lot of people just say, “Oh, it’s the companies. It’s not us.” We control the companies! If enough people speak up — it’s no different than the straws!

TIM SYKES: Enough people complained to Starbucks about the straws. The company was forced to not do the straws — even though it created a new problem. But if everyone starts saying: “Wait a minute. We won’t tolerate this anymore.” Coca-Cola, Pepsi and Nestle are three of the biggest plastic producers. We should say, “No. We’re tired of doing this. We boycott your brand until you come up with alternatives.”

TIM SYKES: There are alternatives. They’re just more expensive. The companies don’t want to do them because that will hurt their corporate profits. But if enough people say: “We’re not buying your product,” they’ll think: “Oh. Wait a minute. We have a big drop in profits because less people are using our product. Let’s use the environmentally friendly one.” So, they’re forced to. We the consumers have the power. But we must get everybody involved. It’s not just enough to have a few hippies talking about this. We need massive numbers. I could go good and bad on the Seaspiracy documentary, but it brings up a lot of awareness. And awareness is how this all starts.

CHARLES MIZRAHI: All I know is that I don’t eat salmon on Monday nights anymore. So, it did impact me.

TIM SYKES: That’s a small change, but you’ve made it. If billions of people start doing that, you’ll see big changes over time. That’s exactly what’s happening.

CHARLES MIZRAHI: You saw the documentary. At the end, the guy said he tried this and that. He said: “The easiest thing to do is stop eating fish.”

TIM SYKES: I just invested in a kelp burger company, and it’s made of kelp. I’m going to send you some. Kelp is actually a carbon negative activity. It’s basically like underwater farming. Unfortunately, the problem is that there are a lot of fishermen. There are 70 million fishermen in the world. They’re also feeding their families. So, we’re talking hundreds of millions of people depending on fish. They need something different.

TIM SYKES: What if we start underwater farming for kelp and seaweed —which is actually quite healthy for you? And then, we start regenerating. There are so many different options, and we need to talk about this more.

CHARLES MIZRAHI: Love it. First of all, I love this stuff.

TIM SYKES: You can see that I’m getting a little animated. This is when I get passionate. We have the power. Share this. Talk about this stuff. Watch Seaspiracy on Netflix. Share it with everybody. Education is possible. We have this technology now at the most important time in history. We’re destroying the world at the fastest time in history. There’s something like 60 soccer fields on forests disappearing every minute. It’s crazy how much is going on all over the world and how it’s all going to start to really get ugly in the future.

CHARLES MIZRAHI: No one ever claimed that you didn’t have passion, Tim. That’s great, man.

TIM SYKES: I think that we’re definitely the problem. But we’re also the solution. It’s not just going to solve itself. Corporations just aren’t going to stop and have like a revelation all of the sudden. No. We the people have to force this. Social media can be used for good rather than just filtering your face and taking selfies.

CHARLES MIZRAHI: A happy day for any charity is when you join. You take social media, and you know how to play the game.

TIM SYKES: It’s a happy day, but it’s a scary day. I’m on their asses. A lot of charity people are very passive. And I’m saying: “No! We don’t have time to be passive! This is war!” I get in their faces, and they’re scared. But it’s good for them.

CHARLES MIZRAHI: Love it. Tim Sykes, all the power to you. I hope to have you on the show at the end of the year because now that travel is opening up a bit more, I want to hear about what you’re doing there. You have 21 millionaires already. I hope you have another 20 by the end of this year. But more importantly, I want to know how many more charities you’re going to help. What I love about this is that it’s very grassroots. You’re not a board of trustees. It’s one guy with an idea. And you could change the world. That’s really what you’re doing.

TIM SYKES:  I appreciate it, man. I look forward to it. Stay safe!

CHARLES MIZRAHI: All right. You too.

CHARLES MIZRAHI: Thanks for listening to this episode of The Charles Mizrahi Show. If you’re a new listener, welcome! If you’ve been listening for a while, we’re glad to have you back. Either way, we’d love to know what you think of the show. Please leave a review if you listen on Apple Podcasts. Reviews make it easier for others to find the show. You can also see the video of the interview on The Charles Mizrahi Show channel on YouTube.