19 May 2006 - Are surf programs ponzi? How good are the odds?

A forumer asked me :

"Have read your blog and am wondering, do you think that any surfs have a real source of 'earned' income, or are they all ponzis of one fashion or another?

Also since you are an 'odds player', are the odds with autosurf really any better than blackjack or baccarat??"

Here is my reply:

Are there any real source of revenue? If we don't see the books, all we can do is to listen what the surf programs have to say. Revenue are made in the following ways:

1. Members' upgrades (could be ponzi depending on your interpretation of the law)
2. Advertising (getting firms, individuals, sites etc to pay for the advertising; this is where some classify <1> as part of it)
3. Affiliate marketing (big area such as getting members to participate in other paid programs organised by the Parent Surf program)
4. Use of forex (Surf programs can claim the use of it as a form of hedging the exchange rates and if it is profitable, it is not against the law)
5. Investment in other legit businesses generating a big return
6. Investing in other surf programs or HYIPs (rather common approach)

In terms of law, we must understand AS is in a grey area and attempts are made to ensure <1> can be classified under <2>. The latest SEC ruling on 12dailypro is unfortunately not contested by 12dailypro and SEC has notably not pushed for a blanket ruling against all surf programs. If surf programs can find a way to put <1> into <2>, then this will take away the ponzi argument. It is too long to go thru the detailed arguments for both sides of the story. Jim Polak (from Autosurf Central) got a thread on it. I previously have written detailed posts on it but not in this forum (AC Cafe). Surf programs are like what MLM was like in its early days. It took many years before the legal model is now as it is.

Surfing has to be about advertising and I don't see any way out of it. When you consider the surf program, make sure advertising is the major source of revenue and this is legit. You can't run a surf program using surf as a facade.

The problem with many scams is to hide behind all these, and claim to be legit. The truth of the matter we can't tell for sure until the program scams. We all know for sure that high yields are a problem and yet there are possibly be very legit programs that can produce such yields. I happen to be a believer in this possibility. There are some programs which could produce high yields but they will NEVER reveal in total transparency how they do it - they claim the right to secrecy of their business.

I basically take the program as a face value but with an expectation the program will likely close or turning scams, so that all my risks are covered, and secondly, to check the progress of the program and if it continues for long, it is a bonus for me. Also, at some point, I listen to how the crowd feels and if I think that is too much cheerleading as the life of surf comes to a point of maximisation, I will stay out or go with much lower spents. For programs that smell of outright scams, I stay out totally. I am a gamer going for programs which I reckon have a chance of honesty and legitimacy. Of course, if a program promises 100% a day, that is difficult to accept. I accept yields up to around 100% monthly ROI.

If you are an honest bloke and take the route most programs are likely scams due to the high yields, it is advisable to stay out of this but there are some surf programs that I do think has a higher level of honesty and legitimacy I reckon. (See my personal Top 10 Surf Programs. But I can never say with absolute certainty. Anyway, no business in real life is ever certain as well. In life, it all leads to the same principle - it is just a game. You calculate your odds, and you take a chance and see how it plays out.

For the second part of your question, are the odds higher than the blackjack and baccarat? For blackjack, as long as you can calculate the odds above 50%, you can play the game. There are some many books out there that will teach you how to do it. But the skills require a lot of training and secondly, casinos recognise these folks as well and they are banned from casinos. Baccarat - obviously the casino has the edge and in the long run, you will lose. Obviously, I reckon the odds in this game are good but it is dependent how smart you can arrange the odds. Spent time observing the programs and look for patterns for success. Follow them in a disciplined fashion after you develop your gameplan. At an advanced level, you need to appreciate Game Theory which means that scamming programs will attempt to show the characteristics that mark them as genuine, and at that level, you have to be smarter than the average smart guy.

Good luck and hopes it answers your questions.