There was some crazy content going on over at Morgan Linton’s blog the last few days. I think he’s gone crazy. He is talking about getting into numeric domains. It wouldn’t be crazy if he was merely talking about trying to scalp some names. But he is talking about investing in them. I don’t think there is a person in the industry that thinks its a good idea. Of course, except the people that are thankful he is going to bail them out. Ironically Morgan was the first (and only) domainer that let me speak at an event. At an LA meetup group. My discussion was on why you should invest in numerics. Anyone who followed my advice made a lot of money. Unfortunately they may have also followed my “sell way too soon” speech.
On another note Morgan’s site became the “other side”. The side that doesn’t like Rick Schwartz. Rick’s site, as expected, is full of people that love him. Morgan’s on the other side has drawn critics. One such critic “Michael” wrote this.
Rick is out of touch, period. I don’t say this as someone who is jealous, I’ve owned 60+ LLL.com over the years, a couple NNN.com, even a few CC.com.
He says domain investors are selling them for 1/10th of their worth. Duh, that’s just the difference between wholesale pricing and retail pricing. Basically what his “advice” boils down to is don’t ever sell to another domain investor because you can get more selling to an end user. What a revelation. Too bad not everyone got in super early, made a killing on porn, and could sit and wait for the perfect buyer. Most people have to hustle. If he actually believed what he was saying, with his bank roll you would see him winning practically every LLL.com auction today, but you don’t see that.
If I had only bought and held back in the day, I could have maybe afforded two LLL.com. The odds of me selling any of those in the next decade to the perfect end user is practically zero, theoretically it might not have even happened in my lifetime. But instead I flipped them for 2-5x to other investors, bought more, flipped those, and kept rolling up and out. In the subsequent decade I made hundreds of thousands of dollars doing this. Had I just sat and waited I might still be sitting on those same two LLL.com domains having not made a dollar to reinvest.
He’s talking from the perspective of someone who built up enough quality inventory early enough, mostly playing with profits and porn/parking money that isn’t around today, that he could just wait on every single domain and still make a great living. Almost nobody except institutional money can do that today. And even if you have the money it doesn’t really make sense… just do the math.
How many LLL.com would you have to own to sell one for six figures each year? I have it on good authority that the number is more than 250. At an average cost of $25k that’s $6.25 million invested to maybe make $200k a year on average. That’s a 3.2% return, barely above inflation and way below throwing it in an index fund.
You have to understand that the people buying numerics today are not buying them because they can get 10x returns to end users. It’s a different game than buying at wholesale and waiting for retail and benefiting from the inefficiency in the market. They’re buying them as a store of wealth hoping to flip them to the next fool (domain investor) for 20-30% gains a few years down the road. Also some of it is just money laundering. It isn’t investing, at best it is speculating and at worst it is gambling. It’s like saying you’re “investing” in crypto.
You’re also more than two years late to this party. There was a great run up in numerics that made a lot of people a lot of money. It was a bubble fueled by greed and FOMO. Then they got cut in half or worse, and now they’re kind of just trending sideways (much like crypto will for a few years). They will definitely not hold up well during the next recession, not relative to LLL.com or words.
Listen to Bill, just keep doing what you’re doing as it is working for you. Don’t chase BS hype machines, especially not several years after they peak. And don’t listen to Rick, his advice generally only applies to the top 1% that got in two decades ago. The rest of us are playing a different game. Don’t get me wrong, the man is a visionary. He saw value where few else did. He had the nerve to hold out for incredible prices. He worked out some brilliant cash+equity deals. But 95% of that success is predicated on already being in an extremely strong position early on due to a different environment.
Rick, if you’re reading this… start a separate portfolio with $10k and blog about your progress along the way. See where you stand in two or three years. Then instead of writing people off as haters or idiots when they say your advice isn’t relevant today you’ll understand where they are coming from and can maybe get a fresh perspective. With prices being where they’re at, $10k will maybe get you 5-10 fairly mediocre domains on the drop auctions, which could take 10+ years before you see a single passive sale in the $x,xxx range. It’s pretty bleak out there.
A response was just as entertaining from Tony
This post was a masterpiece. Much better than the usual speculative drivel by the blog writer of this site. In recent years, Rick has invested way more than your hypothetical $10K into hand reg sprees and junk TLD’s and I’m sure he has taken losses on all those endeavors. The spectacular sales he’s reporting now were all acquired back in the late 90’s.
Mike Berkens, on the other hand, I have no doubt, would be successful today starting over with $10K. That guy looks like the smartest guy in the room probably because he is most times.
Michael shot back
I couldn’t agree with you more, Berkens could absolutely start over today with $10k and do some serious damage. The industry lost a great voice when he semi-retired.
Rick obviously knows what a good domain is, but that isn’t hard to figure out especially this late in the game, and there’s not much you can do with that knowledge without a huge bankroll. But Berkens can spot good value for the money regardless of the price point, which is a whole different (and much more important) talent, and he’s doing it every day. Him, Schilling, Mann, and a few others of the old guard are still grinding and making smart buys.
I was thinking, how would I respond if Rick replied “Sure, give me $10k and I’ll spend the time on this blogging experiment you proposed. You get back your initial investment from the sales and we split the profit after that.” Would I do it? Based on what I’ve seen him doing the past 5-10 years it would be a resounding and instant “hell no”. I have no confidence he could do it.
If Berkens said the same thing to me, he wouldn’t even be able to finish his sentence before I accepted and then apologized for interrupting him. Same for the other guys I mentioned above. These guys kept playing the game and adapted. Rick seems to mostly rely on his (admittedly) brilliant plays from 20 years ago, but guess what… that doesn’t help anyone today.
Again, no disrespect to Rick. Sharp guy. Just out of touch with what it takes to succeed today. The only advice he can give to anyone is “buy expensive domains, quote high prices and wait” which is applicable to almost nobody.
I won’t go into detail about the Rick part as I’ve said my part on this. I respect the hell out of his accomplishments and his banter is just pure banter. I am more than guilty of that. I just don’t like his “better than you” attitude in the same way I dislike Trumps. Doesn’t mean they aren’t correct on occasion. I just don’t like the delivery. He now has the track record, the finances, and the time to say whatever he wants. He’s earned it and he’s doing it. You can choose whether or not you want to read it or whether you think he could do it in today’s market. What couldn’t be more true from above is the Michael Berkens part. He is the true People’s Champion. He made the money in the beginning, the middle, and now. He is Midas. His choices turn to gold. I would put my money on Mike any day if there was a $10,000 challenge. And personally he has been nothing but nice to me. Always making the time for conversation. That’s your domain role model. That’s the guy you want writing again IMO.
Here are today’s names. Click through to see the current price
Quote of the Day: “I don’t like that man. I must get to know him better.” ― Abraham Lincoln
Domain of the Day: LuxuryBox.com Sit in the good seats
Namejet and Sedo Names and Others
UnitedExchange.com Upgrade name for quite a few companies
TheParents.com It all starts with them. High bidder is Uniregistry
66857.com I put this here just for Morgan
TheBoomers.com The aging population of the US. And they have pretty good money
QTouch.com All electronics are touch now
ePrayer.com Doesn’t matter how you pray
Cloro.com Means chlorine in Spanish but I think it makes a good brand on its own
Godaddy Domains That I Like With Multiple Bids
TrueHealth.org Health and .org go together very well IMO
Yikuo.com Chinese 5L that is an upgrade for several companies
LocalWatch.com 18 year old domain. I think of it as a NextDoor type name
ScottsdaleHomesForSale.com Bidders like this one a whole lot more than me
ExteriorPainting.com another one that lets them know exactly what you do
Houhei.com Chinese name that’s the highest price on the Godaddy board
PremiumApartments.com And they don’t even have to really be premium. Just have it in the title. we learned that from all the posts for Premium domains
SQIA.com I’ll say pronounceable
KnowledgeEngine.com If they can’t spell knowledge they’re not ready for the engine
ReviveWater.com There’s already a water company on the .co
PornX.tv The kind of naming convention that seems to be popular with the adult site branders
PepperTap.com Godaddy thinks this is worth $3100
Godaddy Domains With No Bids
TrustedLead.com You can trust these leads. Says it right there in the name. No bids
MyWindshield.com Its a better name than Safelight as far as knowing what the company does. At $17 at presstime
RapeWorld.com Godaddy was going to filter these types of names but seems to actually NOT filter them
DermalScreen.com May eventually be able to find out health issues from Dermal screening
ChiDogs.com If you haven’t had a Chicago Dog you’ve really been missing out
Obova.com Nice 5L with no bids. A last name meaning there are already or going to be companies with the name
GoldenCondor.com Sounds like a wresting move or a options trade
Digsa.com Pronounceable 5L with no bids
Snap365.com 2008 domain. I wouldn’t buy it but I do think it will sell
OTHER Godaddy Domains With Bids