The Ponzi Flavours

The Ponzi Flavours

Ponzi's come in three basic flavours:

1) Rape and Run - With these the operator is a two-bit petty thief who has no intention of running a proper ponzi. What they do is promote the hell out of it then split with the loot on the start date. A Classic example was Proinvestgroup.

Technically they are not ponzis as the money from the later investors doesn't go to pay the earlier investors. They are very democratic in that everybody gets screwed.

So beware of programs which are going to close before starting payouts, or are heavilly promoting a start time and a matrix or payout structure that encourages people to jump in early. Another danger sign is promising 200-300% in a week or less.

Still you can get fooled and there is no such thing as a 'safe' new program.

2) Fly casting - With this the operator figures that by making a few payments they can entice bigger spends, thus making a bigger score. This is the most common ponzi. Anything that pays out 5% or more a day is one of these. The classing give-away is an interest rate that increases with the size of the spend.

As this is the most common type you'll encounter, you really need to develop a well-disciplined cash management strategy like the following:

a - Spend only enough so that the profit is equal to the minimum spend
b - Pull out your principal after its been earned and only spend the profit

At this point if it tanks you have your principal and have lived to fight another day. Hey, we've all seen worse.

c - If you receive a second payout or have had the respend returned, respend the minimum and pull the rest off the table.

At this point if it tanks you have a modest profit, congratulations!

d - If you received your respend back a third time, its looks like you may have a professional ponzi. So start rolling all the payout until you are getting double your spend per cycle profit.
e - From here in pull your half profit off the table until the danger signs appear. Then pull every thing out. There may still be some life, but its better to leave early than late, and there is always another deal tomorrow.

Some of you may say, why take out half, why not compound everything? Well, the only money that's real is the money you keep. So I aim to keep as much as I can. Some of that goes to fund another program so as to diversify and diversify you must as these things have the shelf life of egg salad in the summer sun.

A little bit here, a little bit there. It all adds up.

3) Is the professional ponzi. This is one that has been paying for over a month. Its either run by a real pro wanting to make a really big score, like PIP, or its a ponzi mutual fund run by reasonably honest operators.

In either case its a ponzi player's dream as you can make good money off of these.
You play them as I outlined in 2. If you get to 2 d, then you know its a pro job. Even if you know its been paying a couple of weeks still play it like a 2) as you don't know how much life there is left in it.

Remember Greed is your mortal enemy. Capital preservation is your priority, for as long as you still have gold your still in the game.