Take a look at the prices below. Back in 2012 I was preaching 4 number dot coms and this was a NNNN.com sales result list I posted. Many people then and even now, don’t understand why a company or person would brand their site using numbers. Numbers have been the universal language for centuries. Numbers mean a lot to many people from around the world. . Even here in the US, getting that special number on your jersey as a kid, getting vanity license plates, to trying to get that cool phone number that people could remember (but don’t have to any more), numbers play an important part in our lives. It will never change.
Wouldn’t you have loved to buy ANY of these numerics at those prices? Guiseppe Graziano of Domain Holdings wrote a piece today asking “Numeric Domains – Are We in a Bubble?” I answered in the comments NO, but the comment wasn’t posted so I’ll give you the details here why I completely disagree. First of all let’s look at the definition of “Economic Bubble” “a situation in which asset prices appear to be based on implausible or inconsistent views about the future”
In Yoda talk, implausible or inconsistent future it is not. The biggest buyers of numerics are Chinese. The Chinese market is billions strong and growing every day. The economy is relatively speaking in its infancy. Yes it’s growing at an unsustainable rate but it WILL continue to grow with time. People will have more money. Many wealthy Chinese are looking to move their money out of China. The state has many rules about how and what a Chinese citizen may buy but at this point they are free to buy and sell as many domains as they like. Domains present an easy way to invest. The continues rise in value over the last two years certainly makes it even more appealing. I see no reason why this won’t continue. Some will use the reasoning that NNNN.coms have gotten too expensive for the average person to buy. Then who moved the price of NNN.coms from $15 K to $60K? There was enough money to move that segment.
The short numeric dot com market has a limited amount of numbers. Every day, some of those numbers are taken out of the availability pool and the amount of numerics for sale decreases. So we know supply is decreasing, what about demand. Guiseppe says this
C. Inconsistent demand from end users.
While it is true that numbers have a universal appeal, how many end users you know are willing to spend more than half a million to brand their business with an anonymous number? It is intuitive that British Airways should use BA.com and Western Union WU.com, but how many businesses do you think are looking to pursue a 64.com priced close to $1m USD?
I think their are plenty of people willing to play a lot of money for NN.coms. A million? Maybe, maybe not. But just because it’s not selling for a million dollars doesn’t mean their is no demand or inconsistent demand. A NN.com is one of the most prized assets in all of domain investing so there is no need to discount it. Numbers are only anonymous to Westerners. To Chinese they have meaning.
In summary, I don’t think this is a bubble. Yes I think prices start to settle but a bubble implies a burst. There will be no bursting in my opinion. So why did I sell all my numerics if I’m so positive on them. Easy, I got a great return on them and I took my profit. But I used some of that and bought more. I will sell those also. I am in this to make money and therefore I must sell to make money. Do I wish I would have waited? Yes, but I am a Flipper. A born trader, I only hold names that I didn’t pay a lot for and need time to sell them for thousands. If someone offers me $4K for a name I paid $1K for 12 months later, I generally sell. It’s how I make a living. But I feel confident enough to seek out another good numeric buy and invest again as I’m doing now.
And to head off the questions I’ll add this. I’m not a buyer of any NNNNN.coms except for the top 1%. Not saying they won’t go up, just saying that I have trouble figuring out real value based on past sales except for the very best numbers. I am a buyer of NNN.nets, NNNN.cc, NNNN.nets. In my mind I feel each of these are worth a certain percentage of the dot com and as the dot com move, these will follow. I don’t feel any of the other numeric tlds follow this pattern so I am not a buyer.