Short Seller Marc Cohodes About Face on Overstock

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BFFs Marc Cohodes and Patrick Byrne

Former hedge fund manager Marc Cohodes has been a long-time critic of Overstock.com and its wacky CEO, Patrick Byrne. The criticism dates back to the days when Cohodes was at Rocker Partners, a company that was sued by Overstock along with research firm Gradient Analytics. In 2005, Cohodes was fingered by Byrne as being part of a “miscreants ball” under the direction of a “Sith Lord.” Yet after more than a decade with a negative opinion of the company and its management, Cohodes recently did an about face.

Is money fueling the change of heart?

Sam Antar, another long-time critic of Overstock, details the Cohodes/Overstock situation nicely on his blog. The crux of the issue is that Cohodes (who has been focused on short selling) took a long position in Overstock in May 2017. A month later, Cohodes met personally with Byrne. In October, Cohodes hyped the company during a presentation at a Grant’s Interest Rate Observer conference, and said that Byrne is now his friend. Continue reading

Getting Started in the Tim Sykes Millionaire Trading Challenge

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Earlier this year I wrote about being a part of the Timothy Sykes Millionaire Trading Challenge. I signed up in March, and have been learning Tim’s core strategy (shorting penny stock pump and dumps) as well as other strategies (he and his instructors also teach other ways to trade, so students don’t have to rely solely on trading penny stocks).

There is a lot of material to get through, and it can be overwhelming at first. Where do students start? Here are my recommendations:

  1. This “syllabus” outlines what is on each of the DVDs. It is very helpful if you are looking for specific information.
  2. One of Tim’s students put together this checklist, which summarizes Tim’s trading strategy and the most important chart patterns. Keep this handy. Continue reading

Timothy Sykes: Millionaire Trading Challenge

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I recently joined the Trading Challenge being run by Tim Sykes. I introduced you to Timothy Sykes in 2008 when I reviewed his book An American Hedge Fund. He took about $12,000+ that he got for his Bar Mitzvah, and turned it into $1.65 million as a young high school and college student.

And then he did it all over again… Starting with the same amount in 2008, and growing it again just to prove that he can profit from the stock market without a huge capital base to start.

For several years, Tim has been teaching students how to trade using his core strategy. The strategy involves short selling  penny stock pump and dumps. He finds penny stocks (defined as trading at less than $5 per share) that are worthless at the core. The companies are shams, which generally tout some amazing product or service, but have no revenue, no profits, and often no real operations. Continue reading

Timothy Sykes Calls Foul, Shaq and His Lawyer Cry

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shaqTimothy Sykes is a fantastically successful blogger, penny stock trader, and educator. He makes a living by teaching people how to recognize “pump and dump” schemes by penny stock promoters… and then short those stocks for a profit. They make money when the price of the stock they’ve shorted goes down… which is inevitable if you can identify a stock that is all hype and no substance.

What is a pump & dump? Essentially the promoters of a virtually worthless stock (worthless, because the company is a sham of some sort) do mass mailings of marketing materials. This is the pump. They hype a company with false and misleading information, hoping to interest people in buying the stock (taking long positions). As those people start buying up shares, the price of the stock rises rapidly. While this is happening, people who previously held the stock start selling (at an inflated price, thanks to the all the buying activity generated by their hype). This is the dump. The people selling make a ton of money on their stock. Continue reading

Timmay as Fraudbuster?

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Penny stock trader, author, entrepreneur Timothy Sykes (aka Timmay) has put on his little detective hat and found a fraud in progress. Being promoted by none other than CNBC “reporter” Sri Jegarajah. Timmay makes an excellent point…. Networks like CNBC aren’t about serious news or reporting. They’re about entertainment and advertising dollars.

And by not being skeptical about the stories they’re “reporting,” they are doing a huge disservice to all those who think that they’re credible just because they’re called CNBC. But the CNBC guy made a huge mistake… he somehow took the words of a paid promoter and thought that this was credible research.

Here’s a snippet of what Timmay had to say… great research… and apparently not all that hard for anyone who bothered to look. Continue reading

Buzz Created By Haters is Still Buzz!

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A few months ago I agreed to read and review An American Hedge Fund by Timothy Sykes. I’ve been a bit remiss in writing the review, but am finally ready to share my thoughts. The best way I can describe Tim is that he’s a character. He is a young ambitious guy, but he’s got some over-the-top ideas that I hope don’t do him more harm than good.

His creativity in regard to the stock market and growing assets is fantastic. He wrote his book to give ordinary people a peek into the life of a day trader. Tim made many mistakes while he was growing his $12k+ Bar Mitzvah money into over $1.65 million. (Incidentally, he’s working on repeating that feat just to prove that he didn’t just get lucky.) And he’s not hiding those mistakes. He’s telling the world about them.

I liked the book. I really did. I think it could have been even better with a stronger editor, though. The story is inspiring, but at the same time Tim spares no criticism of himself and the mistakes he made. What I think the book lacked is a bit of the “how-to” that I expected from it. I really enjoyed Tim’s story, and feel that adding some practical tips along with his story would have been a big benefit to the book. Continue reading