Curation income might be more lucrative than originally thought for small investors

Thanks to @furion, and the top curator list by aAPR, we are now in a position to better understand the "game" of curation.

At the time of this writing, the top curator is getting 63% return on his SP, per year - without calculating interest on SP gains, or daily increases and how these affect the annual result. By the way: that's an account with just 373 SP.

Interestingly, we can also see that he's most probably a human, because his last vote was 10 hours ago. That implies that his curation percentages are achieved without sitting all day in front of the monitor to curate - but only upvoting when he is online. 

Again, that's 63%. 

Now if one gets 60% per year, for, say, 5 years, and without factoring in the inflation effect that would fetch even more, if one starts at 1.000SP, in 5 years they'll be at 10.500SP (!).

If the effect is calculated daily (because curation income is increasing SP on a daily basis, which in turn increases the next day's SP income) then the 60% becomes 82.12%

Now, this means that after 5 years, one has turned 1000SP into 20.000SP while assuming for a fixed SP supply that gets 0% inflation (!).

At 30% voting returns (where the top20 curators are right now), this is an actual 35%, which in the fifth year has turned one's 1000SP to 4500SP (again, assuming fixed supply). 

Smaller accounts have an edge over the "whales"

A minnow can upvote something when it is at 0.01$, with their 0.00x$ upvote, and pretty much be assured of curation success even if it hits 10$ or 50$. 

A whale will only be more profitable in terms of returns percentages, if they manage to get far more upvote value in the posts that they vote. 

So far, as we can see in the curation list, this isn't happening, perhaps because the second whale that piles up on the first one, doesn't get as much (the first whale gets the most). Another reason is that curation has become better into spreading smaller rewards to a larger pool of authors and artists. 

The game theory of whale curation is somewhat different than the minnow curation game theory, as whales also have to ensure the well-being of the platform, spreading the rewards to motivate authors and artists, etc.

For small accounts I think it's relatively easy to hit 40% returns. I'm actually doing around 27-34% (actual is around 35-40% - if calculated with daily increases) by even voting on things that won't fetch me much - and I know it when I click them. I also don't upvote with a constantly maxed out 99.7% account, I fall to 80-85-90% pretty often, which costs me.

If one has a dedicated curation account, that is not affected by personal likes and dislikes, upvoting of comments on their articles, upvoting friend posts/replies/comments etc, it could probably go up to 50% (effective 65%) or more, which would multiply one's SP by 12x over 5 years (!).

Curation from an investment point of view

I think there is definitely a market for small-sized investors to buy small quantities of SP (500SP - 30.000SP) to try their luck at the curation game. They can first try with small amounts, like the top curators right now, and if they are successful they can have a go at it with larger quantities.

The main problem for successful curators is that near the 40% mark they are maxing out the amount they can withdraw: The 1/104th slice of the powerdown will allow one to withdraw less than their curation earnings per week. So in that sense, while investing in curation does make financial sense, it also has built-in disincentives for the very successful curators that are hitting 50-60-70% (effective 65-101%) which cannot withdraw their profits quickly enough.

Of course the remainder that is larger than the weekly powerdown slice, will increase one's SP holdings, also increasing future weekly income - provided one does a powerdown reset often. 

Conclusion

The profits made by curation, as a percentage of one's Steem Power, can be pretty significant if one is good at curation - which in my opinion is not hard at all. Right now it seems to be an "under-the-radar" and underdeveloped market, perhaps due to the lack of metrics up until recently. Things might get interesting in the future as a professional curator-investor market might develop.