Well, it’s official. Satoshi Investments has closed and FexFund wins the Battle by default! As I indicated in News Commentary #128, this happened before during HYIP Battles #1 where we pitted FexFund against AxisCrude. In that Battle, just like in this one, AxisCrude closed before Part 2 of the article was published. We at Emily News are starting to wonder if there is anyone out there that isn’t going to run away from FexFund when we put them to the test. Were these programs planning to close anyway or did FexFund scare them away? I guess we’ll never know the answer to this question. However, it’s an intriguing one to think about.
In spite of the fact that the Battle has a winner, there is a lot we can learn by comparing the investment plans that the two programs offered. In fact, we might even be able to come up with a theory as to WHY Satoshi Investments closed so quickly. So, let’s take a look at the plans. We’ll limit ourselves to the ones that we listed in Part 1 of this article.
Analysis of Investment Plans.
As I indicated in Part 1, probably the most important factor to look at when comparing different investment plans is DNI, daily net interest. This is the average net interest or percent profit that you put in your pocket on a daily basis as a result of your deposit in an investment plan. Let’s repeat this information for the seven plans from Part 1 and we’ll give each plan a number so that they’re easier to talk about. Here they are:
FexFund
F1. 6% for 20 days. DNI = 1.00%
F2. 5% for 30 days. DNI = 1.67%
F3. 4% for 60 days. DNI = 2.33%
Satoshi Investments
S0. 3% for 40 days. DNI = 0.50%
S1. 3.3% for 50 days. DNI = 1.30%
S2. 3.5% for 60 days. DNI = 1.83%
S3. 4.0% for 70 days. DNI = 2.57%
First of all, let’s take a look at plan S0. With a DNI of only 0.50%, it is by far the least profitable investment plan on the list. I can’t see why a person would opt for this plan as there are so many more profitable plans available. One might be tempted to say that the plan is more sustainable because of the low interest rate. This logic is incorrect as, when a program crashes, it is due to the effect of ALL investment plans that it offers, not just one of them. If Satoshi Investments ONLY offered the S0 plan, possibly is might have been a good long term investment. However, since it went along with other more risky programs, it suffers from the same level of risk. So, we’ll eliminate this investment plan from further discussion.
First, each set of three investment plans appears to be well thought out. As the DNI increases, the length of the plans likewise increases. So, in order for an investor to take advantage of the higher net earnings, he has to commit his funds to a longer investment term — to accept greater risk. This is the way the typical HYIP is set up.
Next, you should notice that as we advance through the three plans offered by FexFund, the GROSS daily interest that is paid DECREASES while for Satoshi Investments it INCREASES. This can be very confusing to the investor and is the reason that you MUST calculate DNI when comparing investment plans. The TERM of an investment plan is just as important as the gross daily interest rate.
This is clear if you compare plans F3 and S3. They both offer the same gross daily interest rate but the Satoshi Investments plan is more profitable. Why? Because the term is longer. Why does this make a plan more profitable? It goes back to how long it takes a plan to break even. For a 4% gross daily interest rate, a plan will break even in 25 days (100/4). That’s how long it will take to get 100% of your investment back. The time to break even has nothing to do with the length of the plan. So, both these plans will break even in 25 days. After that, all your earnings are pure profit. Since the Satoshi Investments plan is 10 days longer that the FexFund plan, you earn profit for 10 more days and, hence, the DNI, your average daily profit, is higher. I hope that this example gives you a clear understanding of the importance of DNI.
So, just because the gross daily interest rates being offered by FexFund DECREASE as the plan length increases, this does not imply that the FexFund plans will be less profitable than the Satoshi plans where the gross daily interest rates INCREASE. I realize that I’m beating this point to death. However, it took a long time for it to sink into my own head. So, there might be a few of you that have a similarly hard time grasping this.
Once this is clear, you can look at other factors — the main one being the LENGTH of the investment plans. Based on DNI, plans F1 and S1 are comparable. Similarly, F2 and S2 are comparable. And, finally, F3 and S3 are comparable. Concerning length, with the exception of the F3/S3 pair, the others have greatly different plan lengths. Specifically, the Satoshi Investments plans are around twice as long as the FexFund plans. They have to be longer because they offer a much lower gross daily interest than the FexFund plans. In order to have comparable DNIs, a high interest plan with a short term (like FexFund) can only be balanced out by a low interest plan with a long term (like Satoshi Investments).
So, in deciding whether to choose, say, F2 or S2, you have to decide whether you prefer a short term or a long term plan. It is worth noting that the F2 plan is half as long as the S2 plan. So, you could run it through two terms for every one term of the S2 plan. Concerning breakeven points, the F2 plan will break even in 20 (out of 30) days and the S2 plan will break even in 29 (out of 60) days. If you choose to cycle through the F2 plan twice to make it more or less equivalent to the S2 plan, the F2 plan would give you 20 days when you are earning “pure” profit while the S2 plan would give you 31. On this basis, it would appear that the S2 plan is better. However, since you would completed your first F2 plan after 30 days, you would have received 50% net profit which, I believe (I haven’t calculated this out) will more than compensate for the reduced days of pure profit associated with the F2 plans.
If you wanted to, you could even compound your earnings from your first cycle through the F2 plan and reinvest the whole works for a second cycle. The total net interest using this approach would greatly exceed what you would make with a single investment in the S2 plan. However, there would be a definite tradeoff in this case as you would only have the final 10 days of the second cycle when you are earning pure profit. But, this is getting a little bit too detailed…
Assuming that Satoshi Investments did NOT crash, it would have been hard to pick a winner for this Battle. I probably would have recommended that a person diversify by investing in both of the programs since the plans they offer are so similar. Possibly, I might lean toward the FexFund plans because they are shorter term and the risk is less if you only invest for a single term.
But, why did Satoshi Investments crash? There IS one factor that we haven’t discussed. The minimum investments for the Satoshi Investments plans are considerably higher than for the FexFund ones. Specifically they look like this:
F1. $25
F2. $50
F3. $500
S0. $10
S1. $500
S2. $3,000
S3. $10,000
For FexFund, almost all investors can afford to be involved with the F1 and F2 plans. Serious investors can probably also afford the F3 plan. So, ALL the FexFund plans are doable. In contrast, for the Satoshi Investment plans, most investors will use the S0 plan and a few serious ones might use the S1 plan. Very few will be able to afford the S2 plan and I would guess that close to none will invest in the S3 plan. So, while the S2 and S3 plans are “on the books,” I suspect that they were rarely used. This situation is true of many HYIPs. They often have very high interest plans in their list of options, but the cost to take advantage of them is beyond the reach of almost everyone. In this regard, FexFund has chosen a different road and has chosen to make all its plans readily accessible to the great majority of investors. Returning to programs with very high minimum investments, although this cannot be proven, such minimums might be regarded as a “fishing venture” by an unscrupulous Admin. He has his hook out for an investor who will be attracted to the high interest rate and will make the high minimum investment. Once the cash is in his pocket, he will have achieved his objective and will close the program and run away with the treasury. Whether or not this is what happened in this case, we will never know. However, it is something to think about when you see an investment plan that requires an extremely high minimum investment.
Well, we’ll close on this note. I wonder who will be next to challenge FexFund?
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