8 November 2010 - SMI Talk

Hi guys! It's been wayyyyyy too long since my last edition of SMI Talk, and therefore, today, I'm glad to present the long-anticipated issue.

First of all, a lot has passed since my last issue, which was published in early August. Such as the collapse of big names like FinalEarn, yet some still remained strong, such as OilStructure and CherryShares.

With so many closures that happened within the past 3 months, what can we infer from the trend? Is there a golden pattern that we can discern from this seemingly big mess of sand?

Therefore, today, it will be a close analysis of the trend in the HYIP industry from my own perspective, and what we can realistically expect within the next 2 - 3 months.

Since August (or even beginning of this year, if I may), we've witnessed the rise and fall of several top-class short-term programs. The reason I call them "top-class" is simply because they've managed to stay paying for more than a month, which is usually the lifespan of a short-term program offering the plans they did, and many had managed to profit from those select programs. In my book, that's a "top-class" quality program.

While most, if not all, of those programs eventually collapsed, such as UniteTrade and FinalEarn, there's something to be learned here -- the moral of the story, if I may.

Short-term programs are coming back.

Why? Because people are slowly, but surely, understanding the principle behind these so-called "money games". Few years prior, people assumed that some of these HYIPs are legitimate companies with real physical sites somewhere in Panama. They were investing hundreds, if not thousands, of investment funds into these programs because they had been paid regularly. In some cases, programs that paid after a week's request were considered successful.

Fast-track till today, we don't see those anymore. Investors have grown tired of investing in long-term programs that promised "stable, no risk" returns. Investors have learned from their lessons. Investors have shrunk their investment wallets, partly due to the shrinking global economy as well, and invest smaller amounts in HYIPs. And, they've learned to "hit and run". All these demonstrate an investing trend that is inclined towards shorter terms with higher profits. And the only natural answer to this demand is short-term programs.

Don't get me wrong, though. There are still a handful of high-quality long-term programs out there, or being launched as we speak, but "high-quality" is a subjective term. I see "high-quality" as a program that is well laid-out, well-planned, sustainable plans and good communication from the program. In another person's view, "high quality" may mean high returns and fast recuperation of principal. No one's wrong in this case -- both of us are just seeking an investment opportunity that best fit our tastes. If anyone's interested, here are some of the programs that I think are "high-quality" in my view: here, here and here.

Nevertheless, we can clearly see that the trend today is moving towards short-term programs. Despite the higher risks involved, most would still gladly choose a short-term program over a long-term today because they're unwilling to risk their principal for 90 - 180 days in a program.

Well, this is only true up until a certain point.

I held the same idea just few weeks ago, thinking that short-term games are somewhat safer because we can recuperate our principal faster as compared to a long-term program. I was so wrong that I placed $1000 into UniteTrade just days before it collapsed. That's not the only program I invested that collapsed within days. It appears that some admins, while claiming to pay consistently for xx number of months, act as if the program is doing fine just to lure one big investor who's willing to throw in a few thousand dollars. It's worth the wait for them, it seems.

Apparently, UniteTrade had been paying small amounts only, and the illusion that the program was performing well blinded my eyes. I admit, it was a painful experience, but one worth learning.

The moral: Never think that short-term programs will provide a quick, sweet turnover. More often than not, it's a double-sided sword that could cut you in the end.

I hope this edition has helped you in seeing the growing trend in the market, and hopefully this will also help you make a smarter decision in the future.

See you tomorrow!