Ep. 513: Tim Sykes: The only way to trade penny stocks...

Welcome back to another episode of Wall Street Unplugged! Today I’m breaking all the rules… Just last week I talked about the benefits of compounding wealth… how long-term value investing is the safest, and smartest strategy for anyone betting in the markets. Even my new newsletter, Curzio Research Advisory, has stock recommendations based off favorable trends for the next 5, 10 years, and beyond… Today’s guest however is someone that takes a completely different angle… His name is Tim Sykes. Everyone has their own strengths. For example, Chris Mayer is a legend at picking international stocks. My other frequent guest, Marin Katusa, is a resource stock sniper. I personally have a knack for picking junior miners and small-cap biotech stocks. And then there’s Tim... Tim is a financial activist, educator, and is most famously known for his success at day trading penny stocks. He focuses on, no doubt, the most speculative and riskiest investments in the market today… yet has found massive success doing it. He’s the only penny stock expert I know. And on today’s show, he’s giving away all of his secrets. And shows listeners exactly how he takes advantage of the market’s hidden inefficiencies. Now before we get into the technicals, I’ll start with the easy stuff… Penny stocks are far from normal stocks. Some are not even listed on major exchanges… New investors often see these stocks with low prices and think they’re bargains. But what they don’t understand is that the chances of seeing positive returns are highly unlikely. You’re more likely to lose money. Here’s the truth: About 97% of penny stocks are awful companies or, flat-out, horrible investment choices. In my opinion, there are only 3 ways to actually make money on penny stocks. The first, is finding something I call a “revamp company.” Every once in a while a company will go bankrupt, maybe get bought out, and restructure their business models entirely. And at some point in that arch of a story, investors can get in at an huge discount. Again, this is an extremely rare occurrence… and takes a lot patience. Secondly, investors get lucky. They buy a stock for cents on a dollar, wait until they get lucky, and sell. It’s that simple. And then there’s Tim’s method - buying and selling off something called “pump and dumps.” And surprisingly, it’s consistent. You’re not diving into any profits, revenues, margins… None of that. Why? Because penny stock don’t have any. Instead, Tim advises listeners to just look at only two things: “Volume and price-action.” “...Who were today’s highest percent gainers and losers… and why?” Of course, as Tim explains on the show, there are a couple strict guidelines to follow. But more important, these “pump and dump” schemes happen more than you’d think. As an avid investors, Tim and I have seen it all… Promotions, people who get paid to recommend stocks, targeted short-sellers, etc. The list goes on. Some of the biggest scams I’ve ever seen derive from pump and dump initiatives. And it’s nice to finally bring someone on the show that knows how to benefit from them. Yet only from the outside looking in. Again, this strategy is not for everyone… But if you can take it one step at a time, play by these specific rules, and bet on the right information... you can turn thousands into millions in a matter of days. Whether you play the upside or the downside, here's the only real way investors can money in this highly speculative market.