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Domino effect of HYIP

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                                       The High Yield Investing Dominoe Effect
                                                        By Brian Kay



    With the recent changes in Nova-lights (Pegasus, Stargame and TMA) (More info at
http://www.talkgold.com ), there is sure to be major problems across the entire hyip arena. HYIPs that
rely on other programs to make a return, are going to be hit hard. These are the HYIP pools. They
invest in other program to earn a return for their members. Some pools are publicly known, while other
pool programs claim to do trading while they actually rely on the larger programs like Nova-lights.

We truely believe that atleast 70% of all HYIPs are relying in some way off of Novalights. With the new
rules that Nova-Lights has put in place which will cut payouts to under 0.5% per day and lock the
principle in for 1 year, we are speculating that there is going to be a major collapse in the number of
paying HYIPs. We suggest most people wait a couple weeks for the dust to settle before making any
major investment decisions.

This has basically been a trend that we wrote an article about months ago. Its the "Peak and Valley
Trend". For a period of several months (The Peak) there is a major program which seems unstopable.
This program is usually over invested in, and relied upon by many smaller less known HYIPs. Then this
major program either collapses, or changes its payout structure. This causes the Valley, where nearly
50% of all smaller programs collapse and a shockwave is spread thoughout the entire HYIP arena. We
believe that we have just entered "The Valley" period. How long will this period last. Could be 2 weeks
or could be as long as several months. It will all depend on whether or not a major program emerges
that can gain investors trust.

To sum things up, after studying nearly 3 years of internet HYIP's we have seen this trend over and
over again. We recommend that you as an investor stay conservative until a program that you can
truely trust has emerged.

Member of http://www.talkgold.com/forum & http://www.TheHyipForum.com Hyip money making
communities Reviewing http://www.Becomehated.com




High Yield Strategy
Winning Financial Strategies.
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                                 Against The Top Down Approach To Picking Stocks
                                                           By Geoff Gannon



 If you have heard fund managers talk about the way they invest, you know a great many employ a top
down approach. First, they decide how much of their portfolio to allocate to stocks and how much to
allocate to bonds. At this point, they may also decide upon the relative mix of foreign and domestic
securities. Next, they decide upon the industries to invest in. It is not until all these decisions have been
made that they actually get down to analyzing any particular securities. If you think logically about this
approach for but a moment, you will recognize how truly foolish it is.

A stock’s earnings yield is the inverse of its P/E ratio. So, a stock with a P/E ratio of 25 has an earnings
yield of 4%, while a stock with a P/E ratio of 8 has an earnings yield of 12.5%. In this way, a low P/E
stock is comparable to a high – yield bond.

Now, if these low P/E stocks had very unstable earnings or carried a great deal of debt, the spread
between the long bond yield and the earnings yield of these stocks might be justified. However, many
low P/E stocks actually have more stable earnings than their high multiple kin. Some do employ a great
deal of debt. Still, within recent memory, one could find a stock with an earnings yield of 8 – 12%, a
dividend yield of 3- 5%, and literally no debt, despite some of the lowest bond yields in half a century.
This situation could only come about if investors shopped for their bonds without also considering
stocks. This makes about as much sense as shopping for a van without also considering a car or truck.


All investments are ultimately cash to cash operations. As such, they should be judged by a single
measure: the discounted value of their future cash flows. For this reason, a top down approach to
investing is nonsensical. Starting your search by first deciding upon the form of security or the industry
is like a general manager deciding upon a left handed or right handed pitcher before evaluating each
individual player. In both cases, the choice is not merely hasty; it’s false. Even if pitching left handed is
inherently more effective, the general manager is not comparing apples and oranges; he’s comparing
pitchers. Whatever inherent advantage or disadvantage exists in a pitcher’s handedness can be
reduced to an ultimate value (e.g., run value). For this reason, a pitcher’s handedness is merely one
factor (among many) to be considered, not a binding choice to be made. The same is true of the form
of security. It is neither more necessary nor more logical for an investor to prefer all bonds over all
stocks (or all retailers over all banks) than it is for a general manager to prefer all lefties over all
righties. You needn’t determine whether stocks or bonds are attractive; you need only determine
whether a particular stock or bond is attractive. Likewise, you needn’t determine whether “the market”
is undervalued or overvalued; you need only determine that a particular stock is undervalued. If you’re
convinced it is, buy it – the market be damned!

Clearly, the most prudent approach to investing is to evaluate each individual security in relation to all
others, and only to consider the form of security insofar as it affects each individual evaluation. A top
down approach to investing is an unnecessary hindrance. Some very smart investors have imposed it
upon themselves and overcome it; but, there is no need for you to do the same.



Geoff Gannon writes a daily value investing blog and produces a twice weekly (half hour) value


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Against The Top Down Approach To Picking Stocks
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