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We always hear diversification is a key to winning in HYIP. In some level, I’m with it, but not, most of the time. It might be overated in fact.
A quote from The Tao of Warren Buffet which I introduced weeks back.
If you don’t understand what you are doing, you should broadly diversify your investments, with the hope that not all your eggs will go bad. If your investment adviser recommends broad diversification, he is really telling you that he doesn’t know what he is doing and he wants to protect you from his ignorance. Warren knows what he is doing, so he prefers to concetrate his investments on a few well-chosen eggs, and then he watches them like a hawk.
Suits my style, how about yours?
ps. on an extremely coincidental note, after posting this entry and heading to DrunkonLife, I realise we’re talking about almost the same thing on HYIP strategies and he has something on Diversification as well, check it out.
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Jude,
I am a testiment to this lesson. After 12DP I diversified as much as I could. At one point I was in almost 50 HYIPs/Autosurfs. 99% of those are gone. I am down to very few.
I’m looking for programs that have admins with outside sources that they are actually gaining from. It’s hard to find them. It seems like the majority that I’ve had on my “look into this further” list wind up failed. I know that people like to jump in a program and get out before they fail. I am trying to be patient and wait for a program to succeed, preferrably after they’ve weathered a storm.
JMO,
Sharon
At the beginning of last year, whenever you asked a “so called” experienced hyiper, what strategy do you use to protect your money they said “diversify, that way you cant loose it all!”. Altough thats true I bet you that there is a great chance the poor soul DID lost it all, because he/she never ever imagined that ALL the sites he/she diversified in would die within 6 months! And even if one or 2 program survive, even if both program’s doubled their investment, they would still be in a LOSS. The problem is that hyip’s die quicker than you can make up for any loss. If you diversify in let’s say 5 programs and one dies asap you are already down 20%. It takes time to recover from a loss, time you DO NOT HAVE with hyip’s. Most hyipers play the “invest, withdraw and run away as fast as you can” strategy. Because you made a loss and because you need time to recover, you are forced to re-invest which results in yet another loss. Trust me, the poor experience hyiper who diversified in 5 programs have burned his/her ass in 99% of all cases. Diversifying in LYIP’s is even worse. If one of your low yield investments die, it takes almost forever to earn back the loss.
With diversifying the attitude you should have is :”I am very positive NONE of the sites in my portfolio dies, BUT if one dies due to some bad luck or due to some exceptional/unusual circumstances, at least I wont loose all my money and have a chance to get everything back”. Most people however see diversifying as a way to discover THE ONE HYIP that lasts a bit longer than all the rest or they have no clue which sites gonna last long and “random pick” hoping at least one will last so their money wont be gone over night.
Spot on Makila
If a person would pay attention to the math and understand probability, they will soon discover that every time you put your money into a new program, there is a 99% chance of it being a loser. Thus, a 99% chance of you losing at least the profits earned from a working program.
Diversification works for two people, the program admins and program promoters.
Diversification is good up to a point, but it is more important to diversify in the RIGHT programs and not just any program.
Understanding your investment criteria and sticking to it is much more important than investing in 20 programs and hoping you find one that works long term.
Also, it is important to be patient. Not every program is worth putting money into. Don’t be afraid to sit on the side lines if there is no adequate programs available.
Best wishes
Paul