It was afternoon when I started writing. There has been a lot going on in the domain investing world, especially in the Chinese market. Everyone has their opinions on the matter and it should be taken as exactly that. None of this is new, the difference is the acceleration. I’ve been going back and reading old articles to see how certain domain investors felt back then vs now. I’ve spent a ton of hours looking over sales, analyzing patters, and occasionally trying to buy short one and two word dot coms on the cheap while everyone stares out the window at the “new” Chinese domain invasion. Of course its been going on for 5 years. I thought I’d take a little time to share some of my opinion on everything right now.
1. Giuseppe Graziano is all over numerics and shorts now. But he wasn’t real comfortable last year. Even thinking we were in a bubble. It shows that even the smartest people can change their mind. I wrote a piece last year saying that I thought he was wrong and talked about the same things I say now. That the Chinese want to move their money out. Unfortunately I also let the world know that I only was buying the top 5N.coms and none other. I stuck to my guns and did that….and sold them for a good profit. Leaving a Ferrari on the table. But the point of this is that the market has nothing to do with what we “feel”. It’s bigger than any one player. It’s also a market that turns brokers into buyers. It’s hard to be a broker and recommend to your customers to hold and not sell. But Guiseppe is one of the best and he is now one of the leaders of the market. Giuseppe is on tomorrow’s Domain Sherpa show and I think you’ll see he really knows what he’s doing.
2. The nice part about being one of the guys that understands “Team China” is that some of the biggest players in the industry have shared a lot of information with me about what they are doing. And they are buying big blocks just like a stock player would. “That’s crazy” you say. But they were doing the same exact thing with LLL.coms LLLL.coms NNNN.coms and 5N.coms. That was going on then just as it is now. They have made more than enough money to continue the trend. The difference is the buy outs require a few more players and a lot more money. But it’s still happening. Because so much money is coming in to our space. In my opinion we are just starting to see the rush of money.
3. Patterns. Letter Quality. Knowing these will help you money. I am fortunate in that I have gotten to know a couple large LLLL.coms portfolios that are nice enough to share some data about what patterns and letters get the most inquiries. In return I share what I’m learning to help them price their domains better. I have been buying based on those inquiries. It’s a win win. The patterns are public now but it was nice knowing them 6 months ago because now patters like AABB and ABAB are close to 5 figures if not over it.
4. You know those guys offering you cheap prices for your shorts and numerics? Buy from them. Where do you buy tickets at a football game? From the guy that has a sign that says ” I Need Tickets” . I figured the same. I tell the guys I’ll pay $800-900 for Chinese Premiums. They just offered me $400 for them. You know some people are falling for the offers so why not make some money off of their work? I’ve purchased three this way. I simply do Escrow.com to protect myself. Rather than get frustrated from the constant emails, I’ve made them part of my search team.
5. Fraud is prevalent in ALL things popular. Pickpockets go to the big crowds because of all the distractions. Use your head, do your homework, always use Escrow.com. To not be part of the buying and selling in this market because you’re afraid of fraud is like not going to the store because you could get in a car accident.
6. There are more cheerleaders than ever in this market. I’m sure there is money in LLNN.coms and LLLL.nets but I just can’t follow every single domain category. Studying sales data and trends takes a lot of time and at some point you have to pick a focus. But now I get emails all the time asking why I don’t talk about or mention this type or that type. Even scarier yet flattering is that people will take a quote I said to help promote a type of domain. There is a TON of different TLDs that are doing well .top, .co, even .mobi numerics are selling for $25 right now. I don’t now anything about those markets and so to recommend them or promote them without data is something I don’t feel comfortable with. But it has nothing to do with whether they are a good investment or not.
7. You HAVE to sell some domains. As I have said a million times. The end goal of domain investing is not to have the most domains. It is to make money. You have to sell at some point. I have made it a point to sell some things and take some off the table. Yes, most likely they will be worth more at some point. But selling a few LLLL.coms for $2K a piece when I bought them for under $100 is good enough. I have sold 10 for $15K the last few months but I am not going to lie. I bought more names with it 🙂
8. I am still buying keywords while I’m buying more LLLL.coms. Compared to last year its 1/3 as many names but I am still buying. As I said in the prelude. I think the focus is all on shorts right now. Which takes away some bidders on the good keywords. I know for a fact people are selling keyword domains to raise money to buy shorts
9. There are a lot of people that have not participated in the the Chinese domain rush. I didn’t make make as much as I would have liked but its pretty much what I built my portfolio and domain investing career on since 2010. Trunk.com was all purchased with numeric money (obviously wish I would have kept the numerics). Almost every penny I’ve made has been on shorts. I do sell a few keyword domains here and there but the liquid domains have been my thing. I remember someone telling me back in 2011 that my portfolio must suck if its comprised of short, non keyword domains. Ironically have since balanced it with short keywords. I used a 5N.com sale to buy SugarMaple.com for instance.
10. One thing that people don’t realize is that there a lot of Chinese websites that allow Chinese buyers to buy names at Goddady and Namejet using their platform. They can bid and buy the names on those platforms and do the whole transaction in Chinese. You probably know some of the handles on Namejet that represent and can watch it on Godaddy as well. So if it feels like you are bidding against a whole country….you are
11. Advice. Don’t chase. If you don’t understand this market don’t start buying things because everyone else is. Even more important, don’t criticize those that are. Jealousy is an ugly hat. Numerics and shorts have been discussed in the blogs and forums for 5 years. The same people that were criticizing them then are still saying they are irrational investments now. Hundreds of millions have been made while they spent all the time in the comment sections saying we are crazy. The funny thing is at some point in time things will go wrong and they will be the first “I told you so” comments. Yet they were wrong for years. Much like the stock market. If you say it will go down all the time, eventually you will be right. But in the long run it always goes up. As long as people want to buy domains, prices will go up. But again, blind spending is never wise.
12. Has anyone seen a public auction of a NNN.xyz? I know some that have changed hands for $1K or more each but haven’t seen an auction yet. I have some and think I may be the first.
13. You’ll laugh as you read all the above, but this year I quit sports gambling. I was pretty much down to Diet Coke and sports gambling as my last two vices. I realized that now that I have money there was no amount of money that made me happy when I won . When you get pissed when you lose and the amount you win doesn’t give you the “high”, you know its an addiction and its time to stop. I don’t really have time to watch games so I wasn’t even watching. It was all a data thing and money was the way to keep score. Yeah, pretty stupid. Obviously domain investing is enough gambling in some eyes. But I don’t see it as gambling. I think I know what I’m doing and my track record proves it. I haven’t made millions like others but my portfolio gain percentage is as high as anyone in this industry. Just didn’t have the bankroll of others.
14. Either I don’t know how to use it or Afternic is terrible for searching for numerics and shorts. They need to put in a better advanced search function
15. You don’t get better timing than Sedo and LLLL.domains. My buddy Vin was working on his LLLL.com domain sales site for a year and it was finally ready right as the market exploded. It might not seem like a lot of domains are selling over there but he has sold more domains that you think. Sedo also opened up their auction platform to everyone right before the market to off. It really has taken off with dozens of names selling every day when last year there was essentially nothing but crickets.
And finally where would I recommend someone invest their money in domain investing right now? 100% my opinion. I guess it depends how much money. If you have 10K I would say buy a non 4, non zero 5 number dot com. I think they double in the next year. I also think there is value in Western premium LLLL.coms. Everyone is concentrating on the Chinese letters but I like the security of having letters that will still have value to the English market. Those that appeal to both have the most value to me. I am also not afraid of As. I still buy LLLL.coms with As, now at a reduced price. And yes LLLL.net people. I do think now is a good time to buy. I think they will go up. But I am a seller on “nice profit”. And finally , I am not afraid to be the top. I don’t mind paying more than anyone else at this time. I will pay up to get the best name. At the Flippa auction of DXYZ.com there were a ton of bids at the $1000 mark. I hit the BIN button at $1400. This was just a few weeks ago. You are going to have to pay up to get the best. (This isn’t the best but worth the $1400 easily in my mind) Money is made on the buy. That refers to getting things early and cheap, getting a good deal, or just being able to own something that others want. Good luck and thanks for reading
18 Replies to “Opinionated Jumblings of a Domain Investor On a Lazy Sunday Afternoon”
Excellent article bang on the mark IMO.
The only thing I think could have been added is what’s going on with 6n.com because it’s simply impossible to ignore.
They are absolutely flying right now with prices increasing at a jaw dropping rate across the board almost daily it seems. Even average patterns without 0/4 are going for around $230 or so at auction when just 2 weeks ago you would have been lucky to get a bid/backorder. Even with 0/4 prices are going up fast and look on course for $100+ in the not too distant future.
Great info, thanks. I don’t really follow the Chinese domain rush, other than what I read on blogs like yours, so any insights are useful.
A really great read, Shane.
well, this is one of the best article I have read on your Shane.
Awesome is all I can say. I am watching on the fence for now. I only have just TWO 8Ns .com and will sell a year later or close to a year when they come calling for 8N. in the mean time, you guys can help dry up others.
Great post Shane,. I’m a relatively new investor, and I had reluctance to buy any names without the intention of selling them to endusers. I still have a little bit of hesitation coupled with regret that I passed on so many domains that would have gotten me 10x returns easy reseller to reseller. I’m dipping my toes in the water when I see good buys, but still all in. Two word keyword domains are where most of my $ has been going and it has been paying off for me, but I cant say i’m not amazed with whats going on in the domain market now.
Domaining is very much like sports in that the ability to anticipate is what separate’s those who become champions from those who just play the game.
Shane… you are one of those who anticipates moves before they happen.
Thanks all for the kind words. Your checks are in the mail 🙂
Shane, I read you everyday and rarely comment, but I have to echo what the others above have said: this is a *really* nice collection of insights. Thank you!
Thanks for the insights. I sometimes wonder if you make life harder for yourself by bringing more people to the names you think have value. Either you rightly keep some of the ‘hottest’ niches to yourself or you’re confident enough that not everyone will participate even if you said exactly which names to buy and at what price!
About a year ago, I asked one of the more well known domainer blogs whether they thought llll.coms with non premium letters would rise in value as cultures and countries with less online presence joined the game. (Not that China was ‘not online’) He said he couldn’t see it happening. Damn it- I didn’t trust my instinct and let so many CHIP llll.coms float by…!
Well done for having the balls to pursue your own thoughts and instincts- its easy to talk about but you’re obviously doing it. 🙂
As others have said, one of your best articles ever… and probably one of the best articles re: domain investing ever written by anyone.
Thanks for the share and really a great blog. A question for Shane, from the article I’ve read you think this rush will be here for at least 5 years probably, can you share how you come to that number?
I think things take a while to play out. It may seem overnight but people have been buying numerics and shorts for a decade. The increase in prices started in 2010 and have built a little since then. Overall the world economy is in a good place (yes you could debate this easily). China has only been in the domain market for 5 years, I see no reason why they won’t be in it another five or longer. Again, all opinion but things take a while to play out and that’s my reasoning. But it doesn’t mean it will continue at this pace for 5 years. This pace is impossible to maintain…………..I think
Thanks for the answer.
I think too that this rise in prices is very hard to maintain for 5 years but in fact who knows? Tons of money come out from china. I’ve asked about 5 years because i’ve also heard other opinions with the same expectation. One above all come from Name Pros inside an interview with DN.com.
Of course these are just forecast but i think they are nice food for thought.
Fantastic article Shane. Some great insight right here and should be required reading. Putting your money where your mouth is, instead of just spewing off nonsense like so many other “domainers” do.
The tip about using the low-ball inquiries to your advantage is something I’ve never thought of doing. Great tip and I will be using it.
I share your views about western llll.coms. I also think that getting anything that ends in a “i” or “c” is great because it’s like you have a lll.com. A lot of companies have three letter acronym names and add the “company” or “incorporated” to the end. CBNI (for example) could be a three letter company name… so you are minimizing risk here when buying western llll.com.
Thanks again for a great opinion piece!
Solid article, well-written and more proof of why you’ll always be my go-to guy when it comes to understanding the Chinese domain market!
Thanks Morgan. And you’re the reason I go to Banana Republic. Fashion Metric taught me that’s what fits me best 🙂 #olddomainingfriends
“To not be part of the buying and selling in this market because you’re afraid of fraud is like not going to the store because you could get in a car accident.” – Great article, thank you
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