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0:30 Most penny stocks fail. Most penny stocks go to zero. So, while everyone hates on penny stocks, I say why hate on them? Because they're probably going to fail? Because they're probably going to go down. That makes them predictable, and you can make money short selling. Short selling is betting on a stock going lower. You might've heard the term don't sell yourself short, don't underestimate yourself. In this case, with a penny stock, it's good to underestimate it because they'll probably screw up whatever they have going for them eventually.*
1:30 You want to find a penny stock that is already up. Ideally, it's been pumped up by some mailers, some promotional garbage on Twitter. Maybe there's been some faxes sent out if they still send out faxes. If there are telemarketing phone calls. Every kind of marketing technique that people like the Wolf of Wall Street used to pump up scams. And that way the stock price is high. Then, you try to find shares to be short to profit when it comes down.
2:00 Ideally the stock has gone from, let's say, one to six in a few weeks on the back of all this promotion. You think this company is worthless, so you're trying to take out a loan from your broker to sell shares you don't own at $6.00 a share. Let's say you are trying to find a thousand shares to be short, so you call up your broker, whatever broker you have, I use E-Trade and Interactive Brokers, and you try to find shares to short sell them. The That broker will look through their inventory to see if they have shares that they can loan out to you. They'll charge you a little interest rate. It's very minimal, especially if you only hold the stock for a few hours or days like I like to do.
3:00 I like to short sell pretty quickly. I'm going for the quick drop. I'm not hanging on 'til zero. So, no guarantees can be made about finding shares to short. I have a whole music video called "No Borrow, No Cry," where I've seen so many pump and dumps, so many scams get crushed. And I know that their stock is going to get crushed, and I can't find shares to short. That's part of the game. That's why I'm not a billionaire.
3:30 That's why, frankly, I'm teaching, because I can't short sell every single scam that I see. Sometimes I only short sell like a thousand shares, that's all that Interactive Brokers can find available. It's tough. But, that said, if you find a thousand shares to short of a pump and dump that's fundamentally worthless, you can probably make a thousand, 2,000, 3,000 in the next few days or weeks, and that adds up over time. You short sell one scam, and then another, and then another, and more times than not, you win, and it adds up to millions of dollars.*
4:00 I have one student, Tim Lento, who's not just the chatroom moderator, but he is closing in on a quarter million dollars in trading profits simply shorting these pump and dumps and holding for several weeks or several months, and he's winning like 80% of the time. So, check out Tim Lento on Profit.ly. Get in my chatroom. Watch my video lessons. I have over a thousand video lessons on short selling.*
4:30 This has just been a little intro guide, but it makes sense. I know some people don't like to hear it. They think it's unethical or un-American, but for me, I mean, if a company is going to fail, if the stock is going to go down, I try to profit off of it. It's inevitable, so you might as well look for shares to short. Even if you can't find any, you can watch it go down, and you can see how often this works.
* Results may not be typical and may vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here: https://www.timothysykes.com/terms-of-service/.