Wall Street's Bad Boy

By Lauren P. Caggiano
University of Dayton

09/26/2007

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[Note: Hear an interview with Tim Sykes on YOUNG MONEY Radio.]

Timothy Sykes is no gardener, but he's an expert on hedges - hedge fund investments that is.

Sykes, a 26-year-old investor from Orange, Conn., is a 2003 graduate of Tulane University, where he studied philosophy and business. His ability to combine the two disciplines has resulted in big success; Sykes turned his $12,415 Bar Mitzvah gift into a fully audited pre-tax sum of $1.65 million from 1999 to 2002. Since then, the young investor has been busy managing and promoting his hedge fund.

With his forthcoming book, "An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund," the stock market newcomer is trying to shake up the status quo of the investment world. To the general public, Sykes believes "hedge funds are so mysterious," yet they are rather simple in reality. In his words, "it's just a legal structure that allows you to invest in anything. People make it out to be much more complicated than it really is."

But according to Sykes, "hedge fund" will soon be a buzz word. "In five to ten years everyone will know what a hedge fund is," he said. "[The concept] just hasn't trickled down to the general public yet."

What started as a high school hobby has turned into a lucrative obsession. In five year's time, Sykes saw profits of approximately $2 million. "I was stock market crazy," he said about his instant affinity to investing. "My initial success launched me....and then I wanted to take it to the next level."

Investing Phenom

Sykes' book chronicles his investing ups and downs starting in high school and throughout his college years at Tufts University and later Tulane. His success with his early investments prompted him to found the hedge fund, Cilantro Fund Management, LLC, in 2003. Soon Sykes was trading on behalf of more than a dozen friends and family members. The word was spreading-and fast.

In 2006, Sykes' fund was ranked the #1 Short-Bias Fund by Barclays for 2003-2006 and he was named to Trader Monthly's "Top 30 under 30," a list recognizing the top 30 investment professionals under the age of 30.

Sykes' fund has struggled recently but the talented investor has relished a "pseudo-celebrity status" with a starring role on a television documentary series, "Wall Street Warriors" on the INHD (now called MOJO) cable network. The reality show premiered in October 2006, and has since aired more than 700 times. Sykes has also been featured in various other media, including CNN, Fox News, The New York Times, BusinessWeek and CNBC. "It's surreal," he said about his new found fame. "Everyone on Wall Street knows me now."

The New Yorker thrives on the adrenaline rushes he gets when trading. Ninety percent of day traders lose money, but that 10 percent chance is what motivates Sykes to keep coming back for more. "Every time I make money I feel better," he said. "It's an ego boost."

But Sykes hasn't always been so business-minded. Before 2003, he had no real-life business experience. "[Investing] teaches you lessons," he explained. "Losing makes me wiser," he added.

Indeed, Sykes' nontraditional approach to the stock market is uncommon in today's business world. "I trade from my gut....I'm a dying breed. Within a few years, most of the trading in the hedge fund world will be handled by computers." he said. "The fact that there's no guaranteed salary forces you to be on the ball at all times."

Sykes readily admits that the current market environment is much more difficult than back when he made his biggest gains. Having experienced both large gains and large losses during his career he now recommends a much more conservative investment approach for beginning investors.

Financial Cowboy

Due to SEC (Securities and Exchange Commission) regulations, hedge funds are often a "hush hush" topic and Sykes wants to break the silence and bring back "honesty to the stock market." With his philosophy of "freedom of finance," he hopes to create an environment conducive to free speech for hedge fund managers.

Sykes said he likes to think of himself as a bit of a "financial cowboy," opening up the stock market frontier for anyone who wants to explore it. "I am an idealist.....I want to change the [negative] connotation associated with financial speculation," he said.

In the meantime, Sykes wants to "inspire people to follow their passions." The investor encourages young people to tap into what he calls "nontraditional talent." In fact, Sykes believes in motivating young people so much that he is the benefactor of "The Timothy Sykes Day Trading Award for the Talented," an award open to all Tulane students, faculty, and alumni.

"I want to provide the tools to help people," he said about his philanthropic effort. "If you have passion and are willing to work hard, you can make money," he added.

And what is his passion (besides investing)? Simple-food. Sykes said has been to nearly 200 of the 300 best restaurants in his New York City neighborhood. His love of food extends far beyond the realm of restaurants, however. Case in point: The name of his hedge fund, Cilantro Fund Management, LLC, is a tribute to his inner gourmand. Just smell his business card and you'll detect a hint of cilantro.

Sykes rejected a major publishing deal for his book, "An American Hedge Fund," in order to create his own publishing company, Bullship Press, the name inspired by what he thinks about the hedge fund industry's regulations. The book will be published on October 1, 2007 and a national campus book tour is also in the works. Sykes also plans to release an instructional DVD for stock traders in October as well. For more information, visit timothysykes.com.

Hear an interview with Tim Sykes on YOUNG MONEY Radio.

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Comments

Submitted by DoNotTrustSykes on 10/03/2008

I recently had a very unpleasant encounter with the foul-mouthed young man. After I discovered severe corruption at Eurostat, the statistical office of the European Union, I wrote a fully documented message detailing the allegations, which I posted on Timothy Syke's website. In a very short time, my message was deleted. When I contacted Sykes, his excuses ran the gamut from "the file size was too large" to "the message doesn't fit the theme of our website". Timothy Sykes is not a prophet who exposes "manipulative forces at work in companies, the media, ANALysts, etc." as he proclaims. Timothy Sykes is a liar and a hypocrite who probably works *for* the manipulative forces as a facade of opposition.

Submitted by Comment on 02/24/2009

He doesn't work "for" the manipulative forces you claim. He's just a failed trader who lost all the confidence from his investors, and got lucky the first time around. It's his website... he can do whatever he wants. Try putting Tim Sykes sucks on his message board and see what happens.