This second market is the advantage of short domains. If you have decent or better LLL. in the popular extensions or LLLL.coms then you can sell anytime for at least a minimum price, while still having the possibility of an end user paying much more for one of your domains. And there is a good chance, after the recession, that the overall value of your domains will rise.
This assumes that the day when the penny drops and everyone realises L*s are worthless and only hold value between domainers, except for a few rare cases, never comes.
Really, find me a domainer who invested heavily in L*s who has had more than 1% of sales to end users. Take a look at what happened with LLLL.net's, there was a shitstorm over LLLL.coms and everyone got suckered in, then LLLL.nets came, loads bought into them and now are massively out of pocket. Even Reece, the
super domainer is selling them at low prices, he knows the boat is sinking.
L*s will only ever work short term, you can't rely on them to be anything more than a quick buck within a few days. It's going to happen, it'll be the domaining apocolypse when everyone eventually realises that L*s are going in a big circle. Domainer #1 buys it for reg fee, sells to another domainer based on hype, they sell on again, then the next buyer realises the value is tumbling and ends up selling at less than he bought it and this keeps happening until the domain is dropped.
It's a never ending cycle and if you do anything but take advantage of this - Like Reece has, which I commend him for - you're going to end up in the street crying. It's not and never will be a long term investment, buy L*s at a cheap price, sell them a few days later, don't buy them at 'market' (haha, like there is a market for them anymore but between domainers) and think "I bet if I hold onto this it'll be worth a bit more soon".
This comes from first hand experience, I've sold LLLL.net's for ~$30 during the "hype" and then I can now see these domains being sold for <reg fee. Proof is in the pudding, LLLL.coms have gone to about $15 min price, used to be $60.
There is a market for high end LLLLs, of course, but they're not
reallu LLLLs. Sure, they have 4 letters but they don't match the pattern, the majority have meaning.