Domain Spotlight:

In my opinion (of course this whole darn thing is going to be my opinion) the domain community has broken up into three sections since the onslaught of the Chinese controlled market.
1. Those that are in daily participation. Watching daily sales pricing, buying and selling, and staying in the short numeric and letterttgdtyfr markets.

2. The second group sees it as pure hype and pump. That it is being participated in and by those that have a vested interest. That the sales and prices have no reasoning behind them and are doomed to crash. A lot of “be careful” have been thrown out there.
3. And finally there is a third group. This group wants to participate, is trying to participate, but is a little late to the party and is leery about paying so much for things that were so cheap a year ago. They don’t quite understand why everything is moving so quickly but don’t want to be left behind. It’s killing them to watch all this money being made and not to be vested somehow in the run up.

I’ve said it a hundred times, the great thing about investments in general is you don’t have to participate. It is totally up to you whether you put your money into a domain. Hyping absolutely goes on. Pumping goes on every day. There isn’t a blog or a writer in this industry that isn’t effected by outside sources and/or money. As a reader you have to understand that. I’m not saying we are all bad or dishonest, I am saying that we talk about what we love, we talk good about the people we like, and we generally avoid talking bad about things because it is a small industry and we want to avoid burning bridges. We all get something out of our blogs. For some it’s money, for some its a voice, for others it’s therapy. But it is all done for selfish reasons. Nobody in this industry is spending 3 hours a day to give back to the community. I say all this because we have to get that out of the way. To get past the pretending that every single post written in the wasn’t written for purpose. Now we can get to the data.
If you want to learn more about the “new” domain industry then you have to look for real data. The sales results are going to be 95% real and 5% fake. I think the 95% part gives us enough info to be real. When an obscure name or an obscure tld gives an out of the normal result we should dismiss it. Raymond Hackney did a great job pointing out that the recent .biz domains that appeared sold for incredible prices were indeed fake sales. That is great data and great reporting. What made them all believable was the quantity of data. It wasn’t one or two names. It was quantity and that is more believable. We need quantity of data. Similar types, repeated sales, to get a true picture. The If a domain article is written and includes “I sold this (or someone sold) or that for $XXXX” and it doesn’t include the name or the price. It never happened and should be ignored in my opinion. If you can’t give real data then it is a campfire story and you might as tell it with your hands and speak slowly so the kids get excited. Because it is as good as made up.
And I have done my homework. There are a lot of real sales. Real money being paid for real domains. It was all predicted by someone. (Ok maybe not all the alternative tld NNNN buyouts) I have talked about numerics and shorts, and their rise since 2010. None of this talk is new. The difference is they are flying in price now. I have been a short domain investor for my entire 7 year domain career. I think short is memorable. Even numbers. Ironically all those 5 letter domains I bought 5 years ago have grown in value but are not nearly as liquid as patterns. You get some right, you get some wrong. Shane Bellone talked in MAY how he thought that 6N.coms were going to really rise in value in the near future. That gave everyone plenty of time to buy and make $20K easy if you believed him. If he invested in his thoughts he too made a lot of money. Six weeks ago, a group of people and I thought that investing in 5 letters Chinese patterns would return a profit. We didn’t think we were going to be millionaires but for a few thousand dollar investments we had a chance to make it back. Even if we had to renew one year. We talked about why, got data each day on how many were registered and finally pulled the trigger. We bought a few thousand out of millions. We certainly had zero chance of moving the market. You know how its going now. Once I saw the switch to Chinese letters I realized I needed to realign my portfolio of LLLL.coms. You could watch it change in my footer at Namepros. Every day a vowel name went off and it changed to a consonant as I bought more and more. I wrote about the investment several days after I bought them. Some would claim it was pumping. I wrote it because I share everything I buy. Always have. My portfolio is an open book for everyone to look at. You can look at my blog for 7 years and see what I ‘predicted”, what I bought. It is all marked in post. That is what I think is necessary to be taken as legit.
I see shorty domains going higher. I don’t own any 6 numbers or greater. I sold off my numerics to buy keywords. A big mistake in hindsight but I was adjusting my portfolio to the one word dot com which I feel will always be a good long term investment. Not as quick but I know I’ll be fine. Now, I only own 4letters and 5 letters. I have for 7 years and that didn’t change. The big change is I put in $40K to adjust my portfolio to the change in wants. That’s how domain investing works. You keep adjusting. Because this has nothing to do with you. Maybe Oliver, Yoni, Drew, and few others can change a market but you and I can’t. We have to adjust to what others are doing. To try and use our brain and our data to pivot when domains pivot. We have to pick which of the three categories we want to get in. And if we choose to sit on the sideline and watch others pivot then we should cheer them on. Money in the domain markets is good. All money. Just don’t boo when the money goes in someone else’s pocket. It’s not becoming.

Domain Spotlight:

17 Replies to “You Don’t Have To Participate But You Don’t Need to Boo”

  1. There’s a 4th category of domainers. The ones that are glad all the money is being poured into numerics and “shorts” so that they can pick up the keyword domains on the cheap. That would include me. The Chinese are investing in what they understand which are numbers and short domains based on rarity. Those will run dry eventually. The final frontier for them will be keywords and phrases and they will learn to use Google search stats and the English language. You read it here first.

    1. I agree and it is my focus as well. I do believe people are forgetting the value of those type of domain and this is the chance to get them. It doesn’t hurt to invest in numeric names and also in short 4 letter .coms when they are still within reasonable buying range.

      – Will

  2. All the sales and investing part aside, if you step back you have to wonder what the Chinese domainers/investors are going to do with all these 4N to 8N and 4L, 5L etc domains in multiple extensions. Are they going to be able to make money from them, sell them off one by one? Are they happy to hold them for years and pay the renewal fees? Ofcourse it doesn’t matter right now if you’re buying and selling and profiting in the market, but at the end of the day these domains have to be put to use or be able to make money or maintain value, or else why invest? Or is there just so many new Chinese investors and so much money that there is really a shortage of short domains? Does anyone know??

    1. @domains,
      Nobody knows. I can’t even tell you how Apple computer’s stock is going to do next quarter, let alone the long term strategy of the Chinese domain buyers 🙂

  3. I have been investing in 5L brandables long before the CHIPS arrived.

    But since the CHIPS era, I have been investing in pronounceable all consonants (all dotcoms), such as rypyr, pyqqy, gybby, cyrcy, etc. — kind of a hedge…

    Perhaps this is too “Western” in my thinking…

    In any case, I think it would be a mistake to concentrate just in CHIPS because this could very well be a bubble.

    1. You re actually using palindromes, which is an excellent pattern. On the other hand using Y as a “vowel” will not make the name pronounceable. But in Pinyin it will probably mean something.

  4. The reason I’m wondering what the end use is for all these short domains being bought up, is that it reminds me of the tech stock market from Jan to March 2000. You could buy any tech stock at that time and couldn’t lose. If the stock didn’t double, triple, quadruple or more within a week of buying it, it felt like you were losing out. It was a period of a few months where it was impossible not to make money, then it all ended quickly.

    This is why I think it matters what the Chinese are doing with all these short domains. Ofcourse the 2L/2N/3L/3N/4L/4N .coms will always hold value, but once you move out from there into longer domains and non .com extensions, things could collapse pretty quick if the buying ends. What is a domain investor going to do with 4000 domains for instance? If I knew they had a good reason for buying up all these domains and pushing up prices, I’d feel a lot better. It doesn’t matter right now because prices are moving in the right direction and demand is there.

    The question I’ve love to know the answer to, is this a profound change in domain investing brought on by a significant new pool of domainers/investors/cash that can be sustained, or are we all chasing tulips?

    Frank Schilling said something interesting in the past year or so, to the effect of that there really is a limited pool of domains with significance, even with all the new gtlds. There are only so many 2N, 2L, 3N, 3L, 4N etc domains in any extension. Not every investor will be interested in every extension, and for some you have to take out the 4’s, 0’s, v’s, vowels, etc which further decreases the pool. Maybe that is part of what’s going on.

    One thing is for sure is that domaining got a heckuva lot more interesting this year.

  5. Where is Rick S when we need him… I would love to hear his opinion on what is happening now in our space with the shorts and numerics.

  6. Longer numerics (with strong patterns) from 6N to 9N have already been regged and owned by chineses for years, often from as early as 2005 – 2010 on (check Whois), often to match their phone numbers or for any other similar reasons..

    that is nothing new, just came into the spotlight all together with all these other trends recently.. this is why i am also investing in these longer numerics, because there is a PROVEN track record for these wanted by chineses (and not just few investors, but dozens of different chinese people who are not necessarily domain investors (again, check their emails in Whoisology and you will often only find only 2-5 domains assigned to them.. that was before this recent run on the numerics though, nowadays hard to still prove this)..

    this is why there i do see a potential end user market actually and don’t mind to invest a lot into these longer numerics..
    reg. all the other trending niches, i don’t see that proven longterm interest in them yet, so it feels risky for me to rush into them.. just my 2 cents..

  7. and guess what, i used to own and let it expire while away on a trip.. who snapped it up? a chinese in october 2014, relatively long before this run for these numerics really started.. in the meantime he has sold it already further to another chinese as it seems, based on Whois.. there is real demand in china for these numerics, folks.. this is as sure as the sky is blue and the grass is green..

  8. Hey Shane

    I posted here a while back (I think) about the sheer number of 5L combos, so I’d be interested in knowing what patterns you picked up and whether you picked up varying patterns to spread the risk?

    1. Leon,

      I picked up consonants and as many of the same letter in each name as I could without spending 100 hours combing through the list by hand. Had a few tools to help. We’ll see how it play out. Not looking to make a fortune but a few thousand dollars profit would be nice

  9. I think the key is to try to build a tax-efficient, diversified portfolio for the long-term, which may capture a greater return with less volatility.

  10. imho’s are a steal atm. They are shorter than the .com equivalents and look way better. I have also been grabbing’s/’s,’s , short, .com and easy to read and say. Also pronouncable’s even with vowels are getting some love$$!!!
    What did everyone think, the dragon has awoken and is hungry. What about those idn’s?? Many have been holding’s and idn.cctld’s for years waiting for the rest of the World to realize they could surf the Internet in THEIR OWN LANGUAGEs!!! Probably still a few years for idn’s to go up up but it’s nice to see the dragon is hungry and eating well.
    Wait until the economy implodes from printing fake money, should be soon. Awesome times!!!!!!!!!!

  11. I live in Vancouver and have a lot of Chinese friends with money. I will tell you somethng ,they love gambling. Poker is their biggest addiction. I suspect that as domains become more and more popular, this was bound to happen. They probably going head in first and don’t care. Just another new game to gamble on for them. Losing money is something they are used to and I sense that the hype has almost certainly led to this.

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