Why I Learned More From Losing $700k Than I Did From Making $2 Million aka Ask Me Anything!
Posted by Timothy Sykes on Tue 27th of Nov, 2007 11:45:30 AM
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Guys, I’m getting all these emails from you saying “is it okay to ask” or “if it’s not too painful, can you tell me…”. My answer is yes, ask away–no detail is too minute or question too stupid (trust me, many of my greatest fans seem to be braindead)!
Listen, after nearly a decade of hardcore trading, an incredibly surreal experience as a reality TV star and my ever growing determination to make finance completely understandable and transparent, I’m o
nly too happy to answer any and all questions you may have–specific trades, position sizes, dollar gains and losses, strategies, whatever your little heart desires. I ask only that you post your questions on my website’s forum so everyone can see the Q&A and ideally input their opinions, too.
As you’ll discover, what’s most interesting about my journey is that the vast majority of my most valuable experiences stem from the mistakes I’ve made along the way and the losses I’ve endured, not the $2+ million in gains. Sure, the gains taught me a great deal (and they were hella fun!), but my losses have made me a better and wiser person, aka much more important in the long run. This is why I’m so hellbent on showcasing and detailing my losses for everyone to see!
Contrary to popular belief, losses and failure are not the end of the world (as long as you’re still in the game, aka why I never use leverage, aka risk disaster), but rather necessary steps we must take if we are to learn the skills that will take us to the next level. It would’ve been nice if I could’ve gone from $12k to $2 million to $20 million to $200 million, but that’s not the way trading (especially with smallcaps) works (after all, you’re not building a scalable business, you’re taking it one trade at a time). Think of it like Candyland, three steps forward, one step back.
This isn’t some BS I’m using to help myself feel better about my losses, it’s simply investment reality. To better understand the markets, we must not only better understand our successes, but our failures too. After all, unlike every other profession, sport, hobby, activity known to man, finance is full of BS–people, companies, theories, you name it. Nobody knows what’s going to happen next, some are just more confident in their views (whether it’s based on experience, BS or naivety) and that confidence sometimes wins over others. Get enough people to side with you and you’ve got a self-fulfilling prophecy (as detailed in my DVD )
Understand this: there is no one right way to profit just as there is no one wrong way either. Fundamental analysts can hate technical analysts all they want, and vice versa, but that doesn’t mean you should ignore what either has to say. Value investors can despise traders (as I learned only too well while trying to get my book reviewed) and vice versa, but both viewpoints are important pieces to the overall puzzle. Long story short, we must get past our preconceived notions and remain open to what everyone has to say. And, in time, those with superior track records will be the most useful and noteworthy.
And this brings me full circle to why we need TOTAL TRANSPARENCY.
Without knowing EXACTLY what somebody has made or lost on a trade, in their fund, day after day, year after year–their word is utterly useless. Forget about just monthly and yearly % returns, we need to know how much $ did they risk, how much leverage did they use, how long did they hold their positions, etc.
Even though I despise stock picking, I understand people will always be addicted to it because it’s like a drug. Reality is difficult, stock picking eases the pain and offers an easy way out. Despicable! Rather than rely on someone else (who can be influenced by any number of things–mortgages, alimony, gambling, alcohol, or drug addiction, etc–none of which they’ll tell you about), why not bite the bullet and learn about the process behind successful financial speculation and the strategies entailed (what I’m trying to teach you!). It’ll be incredibly difficult at first, but you’ll be much better off down the road. As in teach you to fish…
But I know most of you are too lazy so if you do choose the evil that is stock picking, be sure to require all the detals, not just entry and exit points, but the exact times, the trading volume (a trick most penny stock pickers love to use (due to the illiquidity of the marketplace) since it’d be utterly impossible to get in at the point which they claimed to have picked the stock!), how much $ they made, their technical and fundamental reasons for their pick, etc. If they’re not willing to tell you ALL the details, then they’re hiding something and you can’t trust them.
This is why I know TimothySykes.com and my business model will be a success–I’ve got nothing to hide and it feels great!
Sykes out.
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TIM Trades
View All| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Nov 19 | AENY | $2.80 | $3.02 | $1148 |
| Nov 18 | NLST | $4.16 | $4.40 | $947 |
| Nov 18 | IMGG | $1.42 | $1.64 | $2094 |
| Nov 17 | NLST | $5.04 | $5.59 | $2195 |
| Nov 13 | VRMLQ | $21.50 | $22.97 | $2901 |
| Nov 11 | EONC | $2.61 | $2.80 | $687 |
| Nov 10 | EONC | $2.74 | $3.36 | $9784 |
| Nov 6 | QXM | $4.31 | $4.80 | $1936 |
| Nov 4 | COT | $8.66 | $8.88 | $642 |
| Nov 4 | QXM | $4.61 | $4.89 | $822 |
| Oct 30 | DDRX | $25.70 | $26.53 | $812 |
| Oct 29 | CTDC | $4.00 | $4.42 | $781 |
| Oct 26 | AWSL | $3.24 | $4.10 | $2516 |
| Oct 23 | RODM | $5.27 | $5.23 | $301 |
| Oct 22 | AMLM | $2.69 | $2.97 | $820 |
| Oct 22 | USEG | $6.12 | $6.09 | $85 |
| Oct 20 | CBOU | $8.93 | $9.06 | $243 |
| Oct 16 | VRMLQ | $16.79 | $18.65 | $2773 |
| Oct 13 | YONG | $11.05 | $11.66 | $1202 |
| Oct 13 | NPHC | $0.59 | $0.71 | $583 |
| Oct 12 | IMGG | $0.60 | $0.70 | $682 |
| Oct 9 | ZAGG | $5.50 | $6.10 | $2380 |
| Oct 7 | GVBP | $0.03 | $0.27 | $702 |
| Oct 1 | NPHC | $0.70 | $0.85 | $1482 |
Total: $98,094 (681%)
