Chinese LLLL.com bubble!?

[freezer]

Is it a somewhat good estimate that
chinese LLLL.com premiums are at at least $1billion value today?
Unlike Number .coms chinese premium LLLL.com boomed in value in a very short period.
Will they hold their value or is it the biggest BUBBLE ever seen in domains?

Share your thoughts please

 

[RU]

On growth:
Only because you don't know and have never been to China doesn't mean that no one knows. They have their reasons .. China is becoming a force to be reckoned with. New businesses everywhere. Even if China is slowing down doesn't mean they're really slowing down .. they're still growing by 6% to 7% every year.
When your economy is the largest in the world (by population) that means 6-7% is a great deal.

On IoT possibly increasing demand for LLLL, NNN and LLL
I also believe IoT will cause a spending spree at one point. Maybe tomorrow, maybe in 2-3 years. As you can imagine, it's a lot easier to connect a smart device to 177.com rather than omgthisislong77.com - much easier to remember. So IoT will increase demand. If I had a product like a coffee machine, then I'd make sure it's easy to connect to the internet so consumers wont hesitate. If consumers hesitate connecting my device I loose data I can analyze and use to improve products = lost revenue.

how many NNN domains you have sold?

 

[sOliver]

how many NNN domains you have sold?

I only own LLLL.com, I wish I'd bought NNN back when I started in 2008

 

[wwwweb]

I have heard that there are quite a few Chinese that are picking up these short LLLL.com chip domains and turning around and flipping them to end users in the China for $20k, $40k - even $80k.
If that is true, I can see the price increasing a little further - maybe to $3.5k-$4.5k.

This has been true in the past decade for the western premiums also, companies have been paying good prices for quality 4L's. Even in aftermarket auctions to get a quality 4L.com (non chinese premium) has gone into 5 figures. Many of the non premium 4L spell english keywords, and are worth 6-7 figures.

People do not start asking questions, until they go to cash in their Chips, and nobody is willing to give them what they paid, that is when you start having a problem. Until then, continue to enjoy the ride up.

 

[Kate]

So what I am saying is, there is no bubble, but a natural increase in demand.

Sorry, but I must disagree here. There is a bubble. When you see that kind of irrational frenzy, it's the word. You mean 1 billion+ Chinese all woke up at the same time and they saw the light and they have all become domainers ? I'm not buying it.

As for the 'demand', what kind of demand are we talking about ? Demand from Chinese 'domainers' probably, but widespread demand from Chinese end users I doubt. (I wrote the word domainer between quotes, I will explain below why).

Also, it is important to realize that the number of players in this space is likely limited, they are buying up in huge quantities, but it doesn't mean there is an army of buyers driving the market. Probably much fewer than you think.

But that wont happen for some time because a lot of businesses need those names

While China is a huge potential market, the pool of end users just doesn't multiply a hundredfold overnight... at some point you need to find end users when the domain names have been flipped left and right, and the prices are above reseller level. This is when somebody is left holding the bag.

You realize that China is creating more millionaires than any other nation?

A NPer suggested that it's not all about domain speculation, or end user demand. It appears that the Chinese are trying to move currency out of the country, and domain names are being used as a vehicle. Put differently, it could be that domainers are interpreting the market moves incorrectly... while domains are involved, it's not really about domains...

Besides, just because people have money to burn, doesn't mean they are smart or will make good investments. The average NPer has more knowledge about domains but is nonetheless losing money.

</devil's advocate>

 

[wwwweb]

This is by no means natural demand for the love of domains. Anyone that believes that is a fool.

Some very wealthy people who understand economics, and currency have figured out a formula, and and are executing. For western investors who have been holding so called Chips for years without offers, well Congrats.

Like I said, one day even the rich need to sell, whoever gets left holding the bag when they go cash in their chips, and the cash window is closed will start off the panic sell, where such bubble will burst.

Anytime you have such a price appreciation, without any fundamental
reasoning other than the overall population of a Country I would consider that a bubble.

You really have to block out all the noise, to see the truth.

Yes, the guys holding dozens of these things don't want to hear it, or deny it, but for now it doesn't look like the ride is over yet. I am
still holding, but like the LL.com, and NN.com, many of the Chips are held in Asian hands now.

This is not in domainer control, they can simply take a chance, and try to trade flip points, and hope they don't get stuck at the top holding a YLQH type domain.


I don't think think there is any right, or wrong, but it is much like the stock market, many are trading on rumors.

 

[dordomai]

So what I am saying is, there is no bubble, but a natural increase in demand.

honestly i am sitting on the fence. I don't think i can't predict the future well so I am willing to risk some money on the current trend but i won't be surprised if it doesn't work out well for me.

There is one thing that i find hard to believe:

That there is a natural increase in demand.

Yes there is a long term term trend. Genuine. But there is no natural increase in demand of 100% in a month. No.

We don't have twice as much business owners waking up a few weeks ago realising that they need to get their LLLL.com premium today. No. Neither has the number of businesses going online doubled last month. Not really.

There is something else happening.

That doesn't mean that there is no opportunity but IMO this is trend following not long term investing on fundamentals.

 

[Federer]

There are 10x more Chinese domain investors TODAY than there were in past times - they are mastering the art of buying attractive domains that they know have value (most of US do NOT/cannot understand WHICH/WHY certain chips have more value than others, other than the patterns) and SELLING them to end users. This is NOT a case of end users waking up - it is a case of the new influx of Chinese domain investors now marketing and selling these digital assets to businesses they know can benefit from them.
99% of those sales do not get reported - hence the difficulty in MANY understanding the $3k current reseller pricetag on these.

 

[dordomai]

This is NOT a case of end users waking up - it is a case of the new influx of Chinese domain investors now marketing and selling these digital assets to businesses they know can benefit from them

100% increase of domain investors in one month? so the price is in fact speculation driven as you say.The question is whether or not they are buying on current fundamentals or forward looking fundamentals(at best conservative estimates at worst wishful thinking).

The latter can go wrong badly if one becomes overly optimistic. The .com bubble was driven by forward looking fundamentals, that were partially correct but overly optimistic, on assets mostly lacking fundamentals.

 

[wwwweb]

There are 10x more Chinese domain investors TODAY than there were in past times - they are mastering the art of buying attractive domains that they know have value (most of US do NOT/cannot understand WHICH/WHY certain chips have more value than others, other than the patterns) and SELLING them to end users. This is NOT a case of end users waking up - it is a case of the new influx of Chinese domain investors now marketing and selling these digital assets to businesses they know can benefit from them.
99% of those sales do not get reported - hence the difficulty in MANY understanding the $3k current reseller pricetag on these.

I wouldn't really call these investments, in order to invest in something there needs to be underlying fundamentals to support it.

For instance cash flow, sales, earnings etc...

Buying loans.com for $10M would be an investment. As you would have a business plan which would support that capital investment.

Buying a domain like YRJF.com, for $3K... There is no real fundamentals in creating any content, or purpose. You are simply investing in a finite quantity in a controlled marketplace.


If you play the trend, and exit in the right rounds you will do well. It is more of a supply, and demand model, so I think everyone holding right now can make money.

This is really uncharted territory, none of us really know how to handle it. If you sold at $1.5K, $2K, $2.5K given you had no use for the domains you should really be satisfied. Don't second guess it, take your funds, and use the opportunity to invest in something more fundamental.

 

[Andrei P.]

Buying a domain like YRJF.com, for $3K... There is no real fundamentals in creating any content, or purpose. You are simply investing in a finite quantity in a controlled marketplace.

Some conspiracy theory

Perhaps there are no fundamentals but agreement. Thousands years ago people made an agreement that gold is money because it has many reasons to be: limited volume, easy to part, has some practical use, finally it is beautiful. Now a group of Chinese big guys creating something better than bitcoins. Digital gold - domains. And LLLL.com, LLL.com, LLLL.net and some other niches are perfect for this. Look:

Limited volume - yes

Easy to part- you can sell just one LLLL.com or one LLLL.net or LLLL.org, depends on how much money you need. You need a Ferrary? Sell LLL.com or a handful of LLLL.coms.

Has some practical use - you can sell it to a company that wants to own it and has enough desire and money.

It is beautiful. It is beautiful already because it is rare and you can even forward it to your facebook profile (like a ring on your finger), or you can have email account that everyone will be envy of (those who know its value).

Let's imagine hypothical situation when market (100k chips) is controled by 100 players owning 1000 domains each (or 10 players owning 10000 each, or 5 players owning 10000 each, and 50 players owning 1000) + 1 thousand of small domainers owning 10000.

Let's imagine unbelievable 5000$ per CP and crazy growth has finally stopped.

When it is LLLL.com-market it will be well known and there always will be new potential investors as well as thouse who want to finally sell. And number of potential investors will only grow. So it allows small 20% increase in price each year. Why not. If it stabilizes and shows steady and small increase - perfect situation. Why large owners need to sell their wealth? They already have house, Ferrari and investment that they don't want to ruin.

It can be broken only if a large number of domains are sold at once. I do remember a month ago we saw more than 100 CPs sold by one investor in public. And... Nothing happened. What would happen if 1000 CPs must be sold? Well we saw this too. Then one big guy come to another big guy and buys all his portfolio for 3 millions.

The market of CPs will never be flooded. Yes we will see yet corrections. Jump to 3000$ and then back to 2500$ or even 2000$, but big guys will always buy any number of CPs. This is what we saw all these last days.

Perhaps situation is out of control and price increase is too high. What would I do if I were very big share holder? I would sell some to smooth price increase and make a price correction. Price decreased? Buy them back. When market will be controlled buy small nubmer of main share holders they will manipulate it to maintain its steady growth and reputation like central banks should do. If they don't do that then we will see very sharp price increase and perhaps bubble burst.

But it is just conspirasy theory But would be interesting who are main holders of these domains and if they have plan.

Sorry for that

 

[pablohc86]

Just my opinion:
In the west side of the world sales like:
give.com $500k
werk.com $250k
same.com $233k
Luxe.com $172k

and so on..
They are all happened this year. Of course all of those have meaning and are pronuncable for us in the West side and also fit a CVCV patter.

Let's think about east side of the world, why them they couldn't do the same with names that mean something in their language?
Of course those sales do not happen every day but all the mentioned before are happened in 2015 and there are also more, i just took the top ones.
What about if i mention a name like Ring.com where the owner not disclosed the purchase price? it could be over 500k.

If i'll be a chinese investor with big money i can buy 30 domains LLLL.com for 5k each and if i have just 1 sale per year with 6 figures i can make a very huge ROI. I can also easily hold those 30 domains because the fee are just 300$ per year.
As in this example i'm a savvy chinese investor i know which domains could have more meaning so for 5k i would buy only the best.
We also have to remember that chinese read LLLL as pairs so they also could be more valuable.

What is strange is that it seems chinese investors are woke up all together just few months ago. A good reason could be the alt from the gov for the exit of the money out of the country or also the fall of the stock market so they moved to domains as at the moment those are ok for the gov. Maybe there are also other reasons because of course a so fast growth of price is really really strange and of course there is also a big part of hype.

For these reason i think that there is a big hype that probably will end on a market correction for the names that can't find the right enduser.
Other will sell for huge amount like it happen on the western side of the world.

 

[pablohc86]

You mean price will go up, because domainers will include this government fee into price, right?

Nope..
i mean the gov could do something to stop this trade, maybe growing tax on the trade or what else...

Chinese gov is crazy (well not only chinese gov..) and it is not new to crazy act like the last one where they ask to xyz registry to censor for china all domains with words like “liberty,” “1989” and “democracy.
font: http://fortune.com/2015/11/04/google-xyz-china/

Where there is big money, gov always want to take a slice.
So it could happen something bad or maybe it's just me that i always think bad xD

 

[dordomai]

give.com $500k
werk.com $250k
same.com $233k
Luxe.com $172

did they happen because

a) they were 4L
b) They had special keywords

Will gevi.com sell for 500k? It is still CVCV and 4L?
kerw.com?
sema.com?
xelu.com?

 

[harpo]

Some conspiracy theory


Let's imagine hypothical situation when market (100k chips) is controled by 100 players owning 1000 domains each (or 10 players owning 10000 each, or 5 players owning 10000 each, and 50 players owning 1000) + 1 thousand of small domainers owning 10000.

Sorry for that

Yes i sense thats actually whats happening , for example the 4N.com space there are quite few players that own 1 % or 2 % or 3 % to of that rarity, its like a highend investor collection game , amongst a certain wealthy class of Chinese or American Chinese or savy Macro trend tech investors who believes in China's rise into the technology sector area instead of low wage cheap production they have been in the last 15years.......... there is already a mind shift in the Chinese collective to more higher wage tech consciousness , while Africa now i is starting to fill that void in the low wage worker space that China use to hold, this is just the beginning .

 

[djum]

Nope..
i mean the gov could do something to stop this trade, maybe growing tax on the trade or what else...

Chinese gov is crazy (well not only chinese gov..) and it is not new to crazy act like the last one where they ask to xyz registry to censor for china all domains with words like “liberty,” “1989” and “democracy.
font: http://fortune.com/2015/11/04/google-xyz-china/

Where there is big money, gov always want to take a slice.
So it could happen something bad or maybe it's just me that i always think bad xD

I understand, but from my knowledge of economics, every time government makes conditions for business harder, more regulation, bullshit laws, price for end-user is growing.
Do you really think that investors will decide to give up on their revenues and just give it to government for free?
Hell no, they will say, OK, Big Boss, we'll add you to the food chain and share profits, now everyone else has to pay more, because we have to feed Big Brother too.

That just the way things work in economy.

 

[krx]

Sorry, but I must disagree here. There is a bubble. When you see that kind of irrational frenzy, it's the word. You mean 1 billion+ Chinese all woke up at the same time and they saw the light and they have all become domainers ? I'm not buying it.

As for the 'demand', what kind of demand are we talking about ? Demand from Chinese 'domainers' probably, but widespread demand from Chinese end users I doubt. (I wrote the word domainer between quotes, I will explain below why).

Also, it is important to realize that the number of players in this space is likely limited, they are buying up in huge quantities, but it doesn't mean there is an army of buyers driving the market. Probably much fewer than you think.

While China is a huge potential market, the pool of end users just doesn't multiply a hundredfold overnight... at some point you need to find end users when the domain names have been flipped left and right, and the prices are above reseller level. This is when somebody is left holding the bag.

A NPer suggested that it's not all about domain speculation, or end user demand. It appears that the Chinese are trying to move currency out of the country, and domain names are being used as a vehicle. Put differently, it could be that domainers are interpreting the market moves incorrectly... while domains are involved, it's not really about domains...

Besides, just because people have money to burn, doesn't mean they are smart or will make good investments. The average NPer has more knowledge about domains but is nonetheless losing money.

</devil's advocate>

I think the enduser demand anticipated by current Chinese investors (the big ones, buying thousands of domains) is on a 20 year horizon. Enduser demand has not exploded overnight, and will not, but investor interest in this market has. Think about how many more people you have talked to about domaining in the last month or two than in years past. I have told a lot of people, mostly just to account for my late hours and unkempt appearance . Some of these people no doubt went home and googled "domain investing". And one or two of these people may have jumped in and bought a domain or two. Rich Chinese people have friends and family too. So I don't find it hard to imagine an increase, even an exponential increase, in the number of active Chinese domain investors. In fact, I think this can be expected and is probably a big part of what's keeping the whole thing going. New guys with big bucks wanting to get in on the game.

There is some indisputable bubble-like stuff going on. But that doesn't mean that's all that's going on. The bubbles are the froth coming off of a fundamental shift in domaining. To my eye, this looks like a buying opportunity that will not come around again.

 

[djum]

I was asking this question before regarding LLLL.net, but it will apply to LLLL.com as well.

Any of you were able to buy domain names from Chinese?
Not at the forum like NP, where resellers sometimes may drop few names for sale, but by contacting someone via Whois?

What I'm saying that after LLLL.com or LLLL.net name is bought by Chinese and transferred to Ename you can pretty much forget about it. It's erased from Western domain market, lowering amount of available names and rising the price on them.
Now when end-user company will want to get name and it's owned by Chinese who bought it at 3K for LLLL.com or LLLL.net for $300, they probably will get quoted for 50-100K or 3-5K for .net.
In best case if get any response at all. Chinese seems to be concentrated on the inside market, not outside, they take the treasure from outside and bring it home, buy from laowai and sell to countrymen.

With more and more domains going to China the remaining market will experience shortage very soon. They already registering 5L.com, and most of Chinese investors are big companies and rich people, who won't drop, if they pay 300-3000$ per name, they will find 10$ for renewal.
Time for Western domainers rethink this all situation and see where it's leading us.

 

[GravityEleven]

I wouldn't even buy from chineses, they try to sell far above market value (i tried that before).. besides would be a bit silly as a westerner to buy back from the target buyers.. just my 2 cents..
but yes, i have noticed that too.. in most cases you won't get that domain anymore once it's in chinese hands..

 

[moustafa]

Do you expect any decrease in the floor price of the LLLL.com chinese domains?

and what do your predict for their price after one year? Would it be of same value like any random LLLL.Com?

 

[Perfect Pint]

I was asking this question before regarding LLLL.net, but it will apply to LLLL.com as well.

Any of you were able to buy domain names from Chinese?
Not at the forum like NP, where resellers sometimes may drop few names for sale, but by contacting someone via Whois?

What I'm saying that after LLLL.com or LLLL.net name is bought by Chinese and transferred to Ename you can pretty much forget about it. It's erased from Western domain market, lowering amount of available names and rising the price on them.
Now when end-user company will want to get name and it's owned by Chinese who bought it at 3K for LLLL.com or LLLL.net for $300, they probably will get quoted for 50-100K or 3-5K for .net.
In best case if get any response at all. Chinese seems to be concentrated on the inside market, not outside, they take the treasure from outside and bring it home, buy from laowai and sell to countrymen.

With more and more domains going to China the remaining market will experience shortage very soon. They already registering 5L.com, and most of Chinese investors are big companies and rich people, who won't drop, if they pay 300-3000$ per name, they will find 10$ for renewal.
Time for Western domainers rethink this all situation and see where it's leading us.

EXACTLY!!! Very well put...