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The other day Dave and I received an email from Timothy Sykes asking us if we were interested in reviewing a proof of a book he’s written about trading and starting a hedge fund. We were and he’s shipped us out a couple copies which we’re reading now. If your not familiar with him, a quick summary of his story is here.
While I was waiting for the book to arrive, I saw this thread on elitetrader.com started by Tim talking about his new book. Being curious about what other people thought of him (most were exposed to him through the Wall St. Warrior television show), I began reading the thread. As usual it starts off normal, “yes i’m interested in the book”, “i saw him on tv”, etc. etc. and then quickly degenerates into this crazy, petty flame war where these posters are going on and on about whether Tim attended a political fund raiser at Steve Cohen’s house, if the fund raiser was in his house or hosted outside, what the recent track record for his fund was, what he said on some CNBC appearance and how his trading profits don’t count because he made so much during the high volatility time of 1999-2003.
Besides many of these posters having the maturity level of children, they obviously have no idea what it takes to really be successful. One of my favorite posts about this is from Mark Cuban and I love his quote about “in business you only have to be right once and then everyone can tell you how lucky you are”. For Tim that first time was the period between 1999-2003, he found strategies that worked extremely well and made him an enormous amount of money in a very short time. The thing about money is that once you’ve made it, no one cares how you got it. When you go to buy a new Mercedes, does the dealer ask “Was this money made during highly volatile market conditions? Oh, sorry, we can’t accept it. We only accept $$ made during low volatility. ” or, “Yes, i see you made alot of money in the last five years, but without a ten year audited track record, I can’t accept this”.
Ostensibly, most people say their in the market to make money, but the more I interact with them, the more I understand the Ed Seykota quote “everyone gets want they want to out of the market” and for many of the people I meet, they’re more interested in being right, or doing things the “right” way than making money. In doing so, they miss the best part of this game, that there is not a “right” way. Any way is the “right” way if it’s working for you and generating profits. To paraphrase Warren Buffet, “Investing is not like Olympic diving, they don’t award extra points for degree of difficulty”. The rewards are the same for buying Yahoo in 1998 and selling it in late 1999 as successfully profiting from an iron condor of vix options.
The strong feelings shown on the message boards for and against Tim remind me of those aroused by Cramer who I defended in this post. While I know far less about Tim than I do about Cramer, what I do know is that by actually getting his returns audited and creating a hedge fund entity that is tracked, writing a book that is being published and appearing on CNBC/Wall St. Warriors/TheStreet.com, he’s accomplished far more than anyone with time to sit on a message board all day posting the digital equivalent of “liar, liar pants on fire”. And if the number of responses to the first thread about his book is any indication, I expect he’ll be a public figure in the trading press for a long time to come regardless of how his trading goes.
-John
June 30th, 2007 at 8:57 am
Excellent post!! The majority of posters on ET are little children–
June 30th, 2007 at 1:04 pm
[...] IT works for you and your trading then it must be a good [...]
July 12th, 2007 at 8:49 am
[...] just finished reading Timothy Sykes (more on the author here), “An American Hedge Fund”, which is an autobiography that reads more like a modern day [...]
July 12th, 2007 at 11:56 am
Why don’t you mention that Tims fund has made a whopping 1.5% compounded return for the last 4 years? That’s why people call his earlier streak of money-making luck. Do you call a 600 lbs man who lost 200 lbs in 1998-2003 a weight loss genius if he’s been unable to lose another 200 lbs since and still weighs 400 lbs.?
If you do, your credibility should be questioned as you’re making a comparable mistake in lauding Tim’s gains, or lack of.
July 12th, 2007 at 2:45 pm
SSP,
I think you misunderstood my post. My point was that it doesn’t matter if you make your money through luck or skill, since even in hindsight the two are often intertwined. Regardless of your skill level, you almost always need a little luck for things to work out.
Tim made an incredible amount of money at a very young age and then had the work ethic to actually get his results audited and create a hedge fund. He’s followed that up by writing a book and publishing it himself. These are excellent accomplishments for someone his age that stand on their own and are not related to recent fund performance at all.
- John
July 12th, 2007 at 3:39 pm
“Tim made an incredible amount of money at a very young age and then had the work ethic to actually get his results audited and create a hedge fund. He’s followed that up by writing a book and publishing it himself. These are excellent accomplishments for someone his age that stand on their own and are not related to recent fund performance at all. ”
I don’t deny that he made a great amount of money at a young age. Following it up by creating the vehicle that is a hedge fund isn’t bad either.
Let’s be fair, having not made a compound return in 4 years would make most in Tim’s position attempt to exploit his 15 minute minutes of fame in some way, whether by writing a book or working to make appearances on CNBC. If Tim could make a buck he would, but apparently he can’t via trading so he has to try other avenues. I think you’re giving someone in Tim’s credit far too much credit. This is like a has-been actor doing informercials, what choice do they have but to attempt to exploit what little they have left?
Cheers.
July 12th, 2007 at 4:37 pm
Hahah, glad to see the ET debate about Tim is so viral! I’ve read a few positive reviews about Tim’s book now so I’m very much looking forward to October. Tim has said his recent losses have taught him much, I hope he can pass those lessons on
July 12th, 2007 at 7:37 pm
SSP,
“I don’t deny that he made a great amount of money at a young age. Following it up by creating the vehicle that is a hedge fund isn’t bad either.”
That’s all I was trying to say, Tim did an excellent job turning a small amount of money into a large amount of money in a very short term and followed it up be creating a hedge fund. Nothing more, nothing less. None of my post was about credit or what people “think” of you, it’s about actually going out and getting stuff done which Tim has shown a great ability to do. All the “credit” in the world won’t buy a thing. Making over a million dollars in the market will.
- John
August 14th, 2007 at 11:22 am
BEWARE: Never Trust Tim with your MONEY!!
Cilantro/Sykes Hedge Fund Audited Performance SUCKS BIG TIME (3/2003-6/2007):
Compounded Annual Return: 1.52% (underperformed money market rates, with much higher risk; better to buy CD’s than lose with Tim)
Cilantro/Sykes Fund Sharpe Ratio (Annualized): -0.06
(may as well bet on coin flips; or do as Tim Sykes and sell out and go on TV/self-publish etc)
September 3rd, 2007 at 1:12 pm
“Lucky Idiot/Sykes has his Luck Run-Out”
I’ve read the advance copy of Sykes “book”. DO NOT BUY THAT SNAKE OIL CRAP unless you like seeing a hyper idiot self-destruct……
Nothing of value in this book for any serious professional….
His “Fund” is down over -36% since Jan2006.
September 3rd, 2007 at 7:35 pm
Bob,
Your comment doesn’t make any sense to me. Tims book is not, nor ever claims to be a “how-to trading” book. It is basically an autobiography with an emphasis on his dealing s in the market. “Snake Oil” is when someone trys to sell something that doesn’t work, most often in this context people selling “systems” guaranteed to win 98.5% of the time or something like that.
Tim is simply selling a book that tells the story of his life up until now. It’s not recommending a certain trading style, or preaching about chart patterns or trying to pump a system that he’s selling on his website. It’s just his story, nothing less, nothing more.
Now you can definetly say you found the story boring, or didn’t like his writing style or something like that, but to call an autobiography “Snake Oil” is just nonsensical.
- John
September 11th, 2007 at 2:58 pm
I also read Sykes book and was psyched when I started, but was quite disappointed by the time I got done. Nothing really new or earth shattering in it. I got it for free so it wasnt so bad…..but wouldnt pay 20 bucks for it. Much better “reads” out there.
September 12th, 2007 at 7:28 pm
“Steve” -
I find it interesting you have the same IP as “Bob Cohen” and a very similar email address. Please note that this is not elitetrader and we will start banning your comments if you continue trying to spam.
- John
September 13th, 2007 at 12:36 pm
[...] instances where the same person attempts to post multiple comments under different names about our post a few months ago relating to Timothy Sykes new book.  I’ve already responded to their [...]