Huge Price Jump for Good (not premium) LLLL (coms)!

[Krossat]

I have been bidding @ Snap for a long time now, and have until recently resisted getting into a bidding war.

Well I have noticed in flat one months time, any CVCV (with bad letters / Y a a vowel , everything) is getting bid at furiously and the average end bid is around $500-700.

Some people say its the hype which is bringing about this rush into LLLL's. But if it is such a rush, I can see prominent people investing Big time into pronounceable (and sme tongue twisting ones too). All this seems to predict a permanent value for good (and i dont mean great) LLLL coms too.

People are buying pronounceables and keeping them, cant see much of sales of pronounceables. That is definitely a good indication. Makes me a believer.

 

[ilcesco]

So, what's your point?

(other than hyping up this issue yet again, for your own advantage)

 

[filter]

 

[Krossat]

Well i am wondering whether the price hike i see is really permamnent or superficial?

In physical assets i can vouch that such a consistent surge is rarely temporary and does have some lasting effects.

I am seriously in a delimma whether to go full throttle and invest in some good CVCV's or find alternate nich as well. Is somebody else thinking the same thing?

Money is not in surplus for this so i would like to think for short term investments as well.

(other than hyping up this issue yet again, for your own advantage)

Dont need to hype anything as this niche is self promoting itself to some big profits (and would only be blind not to see this, or particularly naive )
The only thing is being new and investing a good amount, i would just like to reassure myself that i can go full throttle with the 500 range ones as well.

 

[filter]

Well i am wondering whether the price hike i see is really permamnent or superficial?

I think it's going to be a roller-coaster for a while.

Money is not in surplus for this so i would like to think for short term investments as well.

"strong hands" is the name of the game - don't speculate more than you can afford to do without in the short term. Murphy's law is not to be ignored when contemplating gambler's ruin ... Be prepared to hold any position you take on for at least a few months. The trick is to be the one buying when most are selling and conversely, the one selling when most are buying. It rarely works out that way if you don't have the luxury of waiting until the right moment comes to turn your LLLL back into $$$$ ...

The only thing is being new and investing a good amount, i would just like to reassure myself that i can go full throttle with the 500 range ones as well.

Pick the ones that you can imagine yourself being happy with using yourself. There is a lot of fool's gold out there :imho: in terms of grabbing anything that fits a CVCV / VCVC / VCCV pattern ... (speaking as a fool myself - I've been snapping a few of the VCCV pyrite up too, just because it is in fact a step up from my "anti-premium" as far as the popular market is concerned.)

There is a saying in financial markets - the bulls and the bears always have their day - but the hogs get slaughtered! I think going full throttle on higher priced LLLL.com is probably a fine idea at this stage in the game - but only if you've got a full tank of gas for the long haul !!! Otherwise it really is rolling the dice, not at all a sure thing you'll get to where you want to go with it.

:imho:

 

[Krossat]

Thanks for a great reply Filter.

You are right, its the growth of the niche that is kinda unsettling. I have been collecting some good ones lately and plan on keeping them. I do flip some and i buy them solely for the purpose of flipping in a short term.

What i can gather from you is that I should look to invest in really good quality LLLL's so that my risk factor comes down, give it a couple of months, and when the times right and competetion is less, sell for a fairly decent profit.

I guess the key is managing amount invested per domain and the wait period, and balancing the two.

 

[domainer50]

I highly doubt that over the long term these names will stay at this range. I dont think they are going to be like the LLL.coms I think they are going to top out and eventually be at worth most 1k.

 

[accent]

Thanks for a great reply Filter.

You are right, its the growth of the niche that is kinda unsettling. I have been collecting some good ones lately and plan on keeping them. I do flip some and i buy them solely for the purpose of flipping in a short term.

What i can gather from you is that I should look to invest in really good quality LLLL's so that my risk factor comes down, give it a couple of months, and when the times right and competetion is less, sell for a fairly decent profit.

I guess the key is managing amount invested per domain and the wait period, and balancing the two.

Oh Boy.
There is one sure sign of a bubble.

You know what a bubble is, don't you? It is when prices of something get overinflated until there comes a point when they are so high that, suddenly, there are no buyers. You are seeing it in the residential real-estate market now, in a small way. Bigger bubbles were the silver crash of the late '70's (minus 90%) the dot-com bust of '01 (minus something like 90%) and the famous Dutch tulip mania (minus about 100%).

Well, you know what the sure sign of a bubble developing is?
It is when people who have little history in a market start feeling they are being left behind and start pushing large amounts of money into every part of it. There gets to be a sense of urgency, even desperation. The past has been trumped by a new way of thinking, profits will grow and grow.

Two months is a quick flip. A long term investment in a domain is 3 years at a minimum. Maybe the CVCV market will still be booming in 2-3 months. Or 6-7 months. Maybe.

Trees do not grow in the sky. The big profits have already been made by those who got in early. Now may or may not be the top, but it certainly is not "early". There may be smaller profits to be made, perhaps, depending on how many people continue to jump in. But the wise are already looking elsewhere, in my opinion.

There is a point where the value of CVCV.coms is out of balance with other domain investments. Each investor must follow his instinct as to when an investment has passed that point. If a bubble develops (the price gets far out of balance) the deflation is often very sudden.

A major part of my domain investment is LLLL.coms. I have few pronouncables, that may color my opinions. But the reason I have few pronouncables is that I think they are a domainer thing more than an end-user thing. An end-user looking to brand a name can just as easily choose a 5 or 6 letter name, and will, if the price goes beyond his range. I based my purchases mostly on letter quality. Those domains have also appreciated nicely, although not as nicely as the CVCV. But five or ten years down the line, when I sell, the kinds of domains that were hot in late 2007 will not be a consideration of my buyers.

..... I should look to invest in really good quality LLLL's so that my risk factor comes down, give it a couple of months, and when the times right and competetion is less, sell for a fairly decent profit.....

I take issue with that strategy on many counts:

really good quality LLLL's

A lot of disagreement among domainers on what those are, they surely are expensive, but a lot of junk is also expensive.

risk factor comes down

Within a given market the best way to bring risk down is to buy cheap. You learn how to buy cheap by long study and experience. And you rarely can buy cheap whatever is currently "hot".

give it a couple of months

In a couple months the party may be over. There is a lot of interest in LLLL.coms now becuse they went extinct two weeks ago. Just two weeks! It is sure that, in the short term, that interest will fade. They are a great long term investment, in my opinion, but what is happening at the moment is not much indication of how things will pan out.

when the times right and competetion is less

no way to be sure of the time being right, but I doubt the competetion in two months will be less. The market for CVCV is superheated at the moment, that is not the way any market usually is.

sell for a fairly decent profit

In the $500 range you should be looking for several times your investment as a goal. I cannot imagine that kind of continued increase in CVCV prices in the near term. {{That is what the Wall Street saying: "Trees don't grow in the sky" means.}} Long term they almost surely will go higher, but other domains will probably out pace them from todays price levels.

Just my opinions, others will likely disagree.

 

[npcomplete]

Oh Boy.
There is one sure sign of a bubble.

You know what a bubble is, don't you? It is when prices of something get overinflated until there comes a point when they are so high that, suddenly, there are no buyers. You are seeing it in the residential real-estate market now, in a small way. Bigger bubbles were the silver crash of the late '70's (minus 90%) the dot-com bust of '01 (minus something like 90%) and the famous Dutch tulip mania (minus about 100%).

Well, you know what the sure sign of a bubble developing is?
It is when people who have little history in a market start feeling they are being left behind and start pushing large amounts of money into every part of it. There gets to be a sense of urgency, even desperation. The past has been trumped by a new way of thinking, profits will grow and grow.

Two months is a quick flip. A long term investment in a domain is 3 years at a minimum. Maybe the CVCV market will still be booming in 2-3 months. Or 6-7 months. Maybe.

Trees do not grow in the sky. The big profits have already been made by those who got in early. Now may or may not be the top, but it certainly is not "early". There may be smaller profits to be made, perhaps, depending on how many people continue to jump in. But the wise are already looking elsewhere, in my opinion.

There is a point where the value of CVCV.coms is out of balance with other domain investments. Each investor must follow his instinct as to when an investment has passed that point. If a bubble develops (the price gets far out of balance) the deflation is often very sudden.
...snip...

"it's like Deju vu all over again" (credits to Yogi Berra)

Actually we were on the same topic a few days ago here:

http://www.namepros.com/domain-name-discussion/395119-llll-com-market-timing.html

It is interesting that a lot of the same players were involved in that discussion too on technical analysis, market dynamics, and mass psychology.

The one thing that is predictable about markets with large numbers of players is the mass psychology. This is why technical trading is so successful. It is pretty easy to pick out the people involved in the financial markets around here.

hey folks, it is time to go dig out those old books on the psychology of markets and technical trading... and if you don't have the old books, go buy them. Almost nothing is new under the sun...

Great points accentnepal, and a good discussion like the last thread we had on this topic (linked above)

Marc

 

[italiandragon]

I have been dealing with the stockmarkets around the world for 8 years and there are a few things I can say:

the domain industry is growing faster and there are great investment opportunities as long as everyone understands that an investment offer always a risk.

Evaluing this risk versus the benefits is the problem.

No one can predict the future so my best advice is that you need to put on domains only the money you can loose exactly like for the stocks.

No one can tell you for sure if a CVCV.com in 2010 will be worth $50,000 or $10 , it`s impossible to be sure 100 %.

What do we know , is what happened in the past and what`s happening NOW. So we have statistics and Trends that help us in making the best decision.

I keep looking at those datas and at the miserable 18 % of worldwide internet users and then I come up with this in my mind:

"we are still in the beginning......if the internet market was a building of 100 floors , we are like at the 20th floor or so, the best view has yet to come".

 

[filter]

probably more concentrated wisdom and good advice so clearly expressed in these last 3 posts than I've ever seen in any one place on the net.

Well, you know what the sure sign of a bubble developing is?
It is when people who have little history in a market start feeling they are being left behind and start pushing large amounts of money into every part of it. There gets to be a sense of urgency, even desperation.

The one thing that is predictable about markets with large numbers of players is the mass psychology. This is why technical trading is so successful. It is pretty easy to pick out the people involved in the financial markets around here.

we're the ones who *think* we know what we're doing...

"Experience is that marvelous thing that enables you to recognize a mistake when you make it again." (attributed to F. P. Jones, whoever he is)

Psychology is a fascinating beast - domaining in the current market seems to play on a few more aspects of it than most other financial markets - and that's plenty to reckon with already. Bottom line is "fear > greed" - so prices tend to go down much faster than they go up. (And even the "greed" part of the equation on the way up might also be seen as "fear of missing profits by selling at too low a price"). This is a huge oversimplification, there are many other ways to look at market dynamics - but the "fear vs. greed" rubric usually holds its own as Concept Number One.

An interesting paradox to consider - especially for those of us who've worked in and around the financial markets - is that the more you *think* you know, the bigger mistakes you're able to make. (Google "Long-Term Capital Management" for an interesting read ...)

Respect the uncertainty of the game. Do not roll the dice if you're not prepared to deal with that 1/36 chance of "snake eyes" staring back at you.

Plenty of fascinating ideas to consider when thinking about market dynamics and pyschology, hopefully to be continued some more in the "market timing" thread Marc linked for those interested in studying the LLLL.com market from that angle.

No one can predict the future so my best advice is that you need to put on domains only the money you can loose exactly like for the stocks.

good advice in those words above - as well as italiandragon's optimistic yet potentially accurate assessment that there is solid foundation to expect strong continued growth for still a long time to come.

Try to get an independent sense of what the likely "real" value of an LLLL you're holding or thinking of buying or selling might be. It's a tricky calculation - unavoidably still ultimately subjective no matter how much objective data is brought into the analysis. But the more you can keep some solid anchor on a sense of "real value" then the better you will be able to make good decisions about whether to buy or sell at "market price" ... And it is still a maddeningly tricky problem to solve because so often the expected "market price" going forward can in fact be a significant part of the "real value" - but at least you'll have a toehold on reality that lets you run with lemmings without going over the cliff yourself, if surfing bubbles is a game you think you can win.

As far as bubbles go - they can keep growing for a long time before they pop ... and there's often still something solid underneath all the froth that keeps on going strong - think about Google coming out of the dot com bust for instance. (Not saying that Google is not it's own bubble - though not saying it is either - haven't studied it enough to pretend to know! but I digress...)

It's hard not to get carried away by the frenzy. But in the long run it's just as easy to lose money as it is to make money if you don't keep an independent assessment as a reality check no matter which way the "hype" is going at any point in time.

That being said ... These are exciting times, hopefully will continue to be very very good times for all of us who took whatever chance we could afford to get our piece of the LLLL action in the past few years (or in my case, months).

so - yeah, WOOO-HOOOO !!! LLLL com YEAH !!!
Buy some from me! Sell some to me! Get rich or go broke paying reg fees! PayPal and Monte and Bob must love it!

Pick up some good ones at sane prices when you can, sell some at crazy prices when you can, and enjoy yourself. Stick to doing good deals with good people, and try to make a few end users happy while you're at it!

But be careful once you start playing with $$$$ outside of your comfort zone. (My total investment in LLLL.com is less than $2000 or was last timeI checked - I don't think I've bought anything in the aftermarket priced over $35 yet, not sure I ever will unless it's something that is worth it to *me* - not going to pay crazy prices for stuff I don't like just because I think some other crazed domainer will pay more for it later! Well, not too much anyway!)

Thanks for starting a great thread with your question! Cheers ...

 

[floatingworld]

One can only buy into a certain level of uncertainty which is translated into risk. If the market is 'certain', then the price will already have adjusted itself. The price of premium LLLL is partly influenced by the bottom end of the rare LLL market and also by the knowledge that in business terms end-users use acronymic (is this a word?) LLLL combos to build a company brand eg HSBC, which is further 'branded' by a rhyming CVCV format eg LIPI.com $1k is not where this is going to stop.

 

[geb9696]

I think CVCV.coms are a great investment. If you look around not many of them are being sold. Also, type some random CVCV.coms into your browser and you might be suprised how many go to banks and other big businesses.

 

[npcomplete]

...snip...
It's hard not to get carried away by the frenzy. But in the long run it's just as easy to lose money as it is to make money if you don't keep an independent assessment as a reality check no matter which way the "hype" is going at any point in time.
...snip...

Amen. I have been trading the markets for over 35 years, and the one thing I have learned is "try to keep emotions out of it". This is true of most investments, whether we are talking domains, stocks, commodities, real estate...

When I try to be emotionless I find I am in that statistical group of players that try to be emotionless in trading, and find myself back in another group subject to mass psychology.

The trick I suppose is to know when to bail out on bubbles. The traders around here know most of the rules: When your grandmother starts talking about buying into the market, it is time to sell. When your granny starts thinking about selling it is time to buy. A bit of "contrarianism" goes a long way in the markets.

Marc