Sep

21

Hedge Fund Manager Circles the Drain

September 21, 2007 |

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Although the New York Post refers to Timothy (”Timmay”) Sykes as a “hedge king,” I would hardly describe him that way.  In fact, aside from the humous value to this episode (which I am about to describe) there is an object lesson here - but let me set the stage first.

Timothy Sykes is a “self styled” hedge fund manager who supposedly took $12.5K of his Bar Mitzvah money and turned it into $1.5 million or so.  Ok, not bad for a guy who supposedly hangs out in his apartment all day in his boxers and bathrobe (some claim: pink).  I guess this is the dream of many day traders and, so it seems, some hedge fund managers. 

As the Post points out …

In 2006, Sykes was not only the star of the “30 Under 30″ bash, he was written up in the Times for turning $12,415 of Bar Mitzvah gift money into a $1.65 million fortune and launching Cilantro Fund Management, which became top-ranked by Barclays.

 Ok.  Great.  The fuss is about how Sykes was “disinvited” to Trader Monthly’s annual party.  Here’s the synopsis from DealBreaker …

The row over “Trader Monthly” disinviting Tim Sykes to this year’s “30 Under 30” party is so fantastically petty and stupid we can hardly keep our legs crossed. Basically, the week before Tuesday’s awesome soiree at Gold St.—and make no mistake, it was awesome, if you’re into the B&T crowd—a VP from the magazine emailed Tim to say that while he could not bring a camera crew from MSN with him (which had previously been tentatively approved), he was still welcome, on his own. This was last Friday. On Monday, young Sykes received a second email, informing him that actually, he couldn’t come, either.

Now, to put this all into perspective, it seems the Cilantro hedge fund hasn’t been doing so well.  I don’t profess to know anything about this fund or its returns, but I do know how to spot when a manager loses focus.  I also know when to spot what I would call immaturity and ‘optics risk’- a term coined by institutional investors to describe the public profile of a manager.  If you are high risk - they don’t want anything to do with you.  At this point, I think “Timmay” has cut his own throat with the institutional crowd.   

But Cilantro has suffered major losses, and in his new book, “An American Hedge Fund,” Sykes slams the market, writing: “I would like to thank the thousands of inept corporate management teams, shady brokers, boiler rooms, stock promoters, market manipulators . . . for your endless scheming and undying greed without which my fortune would never have been possible.”

Lane told us Sykes no longer fits in with Trader Monthly’s audience: “This guy has decided to become Mr. Media as his hedge fund loses money.” But Sykes said Lane and his magazine are losing face. “For the editor-in-chief of a magazine I used to worship, this is crazy,” he said. “It’s a slap in the face.”

Writing books instead of focusing on your performance?  Blaming others?  Come on.  Seems like Sykes is on the downward slide to Palookaville fast.

The lesson here is simple: focus, focus, focus.  Don’t mess around with book writing until you are well established and be careful in dealing with the press.  Consult a qualified PR person.

And if you need a friend, get a dog.

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Comments

8 Comments so far

  1. Timothy Sykes on September 21, 2007 6:13 pm

    Actually, as you’ll read in my book, there’s been nothing I could do to stem my hedge fund’s losses. This is the problem with the lack of transparency in the hedge fund industry–it allows people to draw faulty conclusions. do me a favor, learn the details first, then tell me what you think! I have no problem with negative reviews, so long as they are not based solely on assumptions!

  2. Tom Augenthaler on September 21, 2007 6:52 pm

    Tim,

    I give you credit for commenting on our post today. You’re not afraid to confront those who criticize you - and for that you are to be commended.

    As to your book - you are correct that I have not read it. Perhaps you can send me a copy so I can do a review?

    As to Cilantro’s losses, well, losses are losses, no? Long Term Capital could claim the same thing — lack of transparency causes people to draw faulty conclusions. Also, are you sure there was nothing you could do to prevent the losses? That’s what risk management is for.

    Thoughts?

  3. Timothy Sykes on September 21, 2007 11:00 pm

    Of course I’m not afraid of my critics–I have nothing to hide and I want to get the word out. So, I’ll def send you a copy, would you prefer hard copy or PDF? Just email me.

  4. Norman Lunden on October 25, 2007 6:51 pm

    Update to the Sykes saga. He has been reported to the SEC for posting on message boards attacks against a company he made a short recommendation against on thestreet.com

    How he swindled that side into giving him a podium is anybody’s guess. I imagine he fancies himself ala Jim Cramer, but where he tries to match Cramer in terms of bluster and self-aggrandizement he lacks Cramer’s obvious deep well of knowledge and ability to educate about the markets which is something Sykes cannot do. I hope Cramer knows Sykes used his site and then bashed the same pick on Yahoo and Raging Bull message boards immediately after to reinforce the chances of success for his short recommendation.

    This kid is the sleaziest thing to hit the financial media in a long time and that is saying something.

    Just say NO to Tim Sykes.

    And if you haven’t already seen his now classic laughing stock of Wall Street series of emails published on TraderDaily.com go look them up. They are excruciatingly embarrassing.

  5. Howard Kaplan on October 26, 2007 7:23 pm

    I read Sykes mediocre hedge fund book since I knew him at Tulane, and like him as a person. However, the book is an empty and uninspiring story about how Sykes became a self-absorbed irresponsible stock trader. This book is NOT a “classic” and story is NOT “Rocky-like”(as author Sykes claims). This book is basically like a blog of an average person who got lucky trading stocks and then his luck ran out (which it really should be - blog and nothing more).

    Beware of all the phony glowing reviews for Sykes Book. Its the good ole boy network in high gear where authors/investment advisers use the buddy system to give fake good reviews to each other.

    Sykes put the term “stock operator” in title in order to confuse all future book searches for Jesse Livermore’s excellent story (Reminiscences of a Stock Operator, by Edwin Lefèvre (1923)). This cheesy trick might help book sales, but needless to say, Sykes has nothing in common with the great trader Livermore.

    Sykes comes across like a hyper/immature/video game player-type Trader, which worked for him for a few years; then the law of averages caught up with him. His “return to the mean” continues during the past two years; and his very poor investment strategies are DOWN -37% since Jan 2006. His continuous bad performance throughout 2007 shows that he does not learn from his mistakes; and readers can only cringe while watching Sykes slow motion demise.

  6. Steve C. on November 12, 2007 1:26 am

    I READ SYKES WORTHLESS BOOK AND IT HAS NO SUBSTANCE AT ALL. THERE ARE PLENTY OF OTHER BOOKS THAT COVER THE SAME SUBJECT MATTER FROM PEOPLE WHO HAVE A RIGHT TO EVEN AUTHOR A BOOK ON THE SUBJECT.

    THIS WORTHLESS BOOK IS JUST AN ATTEMPT AT COMING UP WITH A CATCHY TITLE TO GENERATE HITS ON A SEARCH ENGINE. SAME OLD TIRED INFORMATION PRESENTED.

    SYKES IS A FAILED HEDGE FUND MANAGER, NOW BECOMING A SNAKE OIL BOOK SALESMAN. BOOK NOT WORTH $20.

  7. Ed S. on November 29, 2007 6:43 pm

    Ok, I just recently learned of this guy, Tim Sykes, and have visited the web site he set up and watched a few of his idiotic appearances on various news outlets such as CNBC. This is HILARIOUS.

    Tim, if you are reading this, listen up:

    Much of what I’ll say is redundant but you know NOTHING about what you claim to know about. You are a rank amateur who has learned enough surface information about an industry so as to come across as being knowledgeable enough about it to teach to others. The only people that take you seriously are complete newcomers to this game that know next to nothing, because to a complete amateur you sound like you know what you are talking about. You have learned enough about trading to pretend and claim to have traded and that’s about it.

    Trading your parents money via an online retail account is not a fund, but is laughable. Your story is just that, a story. “I turned my 12k bar mitzvah money into 2 million”. It reads like bad spam I get in my inbox but the journalists eat it up like cake. Your web site is hilarious because you are an enormous idiot and I will continue to visit it for free laughs. I wonder if you know how stupid you are or if you have truly convinced yourself that you have learned something valuable enough to write about?

  8. Ben Storey on December 1, 2007 8:44 pm

    Re: Sykes amateurish hedge fund book:

    Is it more sad or amusing when someone’s young ego spurs them to write a book when they possess neither literary skill nor talent? Sykes has commented elsewhere that his goal to become “a great teacher, not a great investor” but in this sad excuse for a tutorial he proves to be neither as his amateurish errors practically drive him from the market, credibility (what little he had) completely shredded. Perhaps, however, it’s not truly his fault: let’s face it, when it comes to imparting wisdom from Wall Street it is simply not possible that a raw twenty-something simply has much to say.

    Not that Sykes doesn’t try however. In perusing the “comments” portion of Amazon book reviews, he’s certainly not reluctant to chime in and offer a defense at nearly every turn. Find me ONE other author at Amazon that feels so compelled to argue his own incompetence.

    Tim Sykes should end his determined quest to become a media personality as his grating manner and decidedly non-telegenic looks suit him far better to shine shoes.

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