Tuesday, October 30, 2012

Bad Argument: Magician's Choice

Top hat as an icon for magic
Top hat as an icon for magic (Photo credit: Wikipedia)
Ever heard of the term "magician's choice"? No?

It's a way to trick you thinking you have influence over his act, when you don't. It's an illusion of choice.

It's pretty simple, if I show you an example.

Let's say magician deals two cards from the deck, and says to you, pick one. Let's just arbitrarily name them L and R (left and right).

If the magician wants to show off the R card, and you picked R, he'll say "good choice".

If the magician wants to show off the R card, and you picked L instead, he'll say "let's get rid of that one".

EITHER WAY you end up with the R card. Thus, your choice is NOT a choice. It's called "magician's choice". You had an ILLUSION that you had 50% influence. The reality is you have ZERO influence.

And that's EXACTLY how a scam works: by giving you ILLUSION of choice.

In the Zeek Rewards Ponzi scheme, members are to "buy bids" (i.e. invest), then leave the money in as long as possible, and any new profits set to "repurchase" even more bids so you can take out bigger shares of "profit" in the future. Most "strategists" in Zeek recommend initial period of 100% repurchase (i.e. take NO money out), and later, switch to 80% repurchase (20% cashout) when you have a decent balance of those "VIP Points".

As a result, most people only do 80/20 (the recommended) even though it may not be the optimum 'strategy' (not that you really *can* optimize how you can profit from a Ponzi scheme).

You have an illusion of choice on how much to reinvest, and how much to take out. However, the reality is once you put in a large amount, it will take you a LONG time to get the money back out, due to a couple factors you may or may not be aware of:

a) your withdrawal only occurs WEEKLY (if it is not delayed for one reason or another), even though accrual seem to happen daily (assume they didn't make a mistake, which happened several times),

b) you only take out tiny drips at a time. You put in 10000, you can only take out whatever the daily "RPP" was, which is about 1.4%, or 140, and that's assuming 100% cash out. If you do 80/20, you only get 28 a day. You'll need  well over a YEAR to get back your 10000 (i.e. make a real "profit")

In other words, once you gave them the money, it will take you a long time to get it back and make profit on top of that, even though it *seems* to be promising 1.4% DAILY.

In other words, you've been tricked by the "fine print". It's NOT a bank. You can't put in 10K, and expect to see profit, *and* get the 10K back later. You've been tricked to think you have control, and you don't.

Look out for ILLUSION of control, i.e. magician's choice.

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1 comment:

  1. Good explanation, yes it is all about that secretive selection of words. Well said, magician's choice favors only to magician, a fact. It is the part of the game.