The math behind domain investing vs. stock market etc

[dotgold]

It seems those who are savvy in the stock market can consistently pull in on average 15-20% on their capital.

Investing in a franchise you can maybe make 7-10%.

How does this compare with domains?

If you sell on average 2-3% of your inventory of say 1000 domains, how likely are you to make good on your investment?

1000 domains means 10K in reg fees roughly.
Say you sell 20 domains for $2K each, that is 40K.
40 - 10 = $30K But you are probably selling on a marketplace that takes 15-20% cut. So that leaves you with 25K.

Now I guess it really depends on how much those 1K domains cost

Looking for some background on the numbers behind the "game".

Much appreciated!

 

[dotgold]

Any thoughts?

 

[biggie]

Any thoughts?

yeah, i got one

Say you sell 20 domains for $2K each, that is 40K.

say i sell one for $42K two years ago, and now only have 526 names that earn a few grand every year in ppc?


imo...

 

[has2hands]

I think you got it.

Sales prices can be tweaked some...I would say up on average....try and stay in $2K plus range.

And maybe sell 50% yourself thru whois/sales pages...no brokers involved.

Definately a game of scale.

Parking income would be added bonus....add $1-3K on average.

 

[platey]

I like the stockmarket as much as domain names

Both can work by using the same investing strategy

Rule 1 reduce fees

Rule 2 don't forget to reduce fees

Fees reduce profit

Long term all day long

 

[KWNG]

It seems those who are savvy in the stock market can consistently pull in on average 15-20% on their capital.

Investing in a franchise you can maybe make 7-10%.

How does this compare with domains?

If you sell on average 2-3% of your inventory of say 1000 domains, how likely are you to make good on your investment?

1000 domains means 10K in reg fees roughly.
Say you sell 20 domains for $2K each, that is 40K.
40 - 10 = $30K But you are probably selling on a marketplace that takes 15-20% cut. So that leaves you with 25K.

Now I guess it really depends on how much those 1K domains cost

Looking for some background on the numbers behind the "game".

Much appreciated!

It really depends. My close friend on a good week manages 40% a week. Say 1 Jan he has 10k; by the end of week 1 he reaches 14k. What he does is increase the size of the positions by 40% i.e. Maintain the same level of risk while adopting same strategy. Say for conservatism he averages 40% a month (not a week) you multiply 1.4 12 times exponentially. That results in a 50 fold increase in capital. He is a talented trader; I know of other traders who don't share this stuff and start with 15k ending up with 600k after one year AFTER taxes. I'm no good at trading but I keep myself abreast of everything that can affect the markets. My best is a double in a month. I'm gonna give him $1k soon so conservatively he'll get me $50k before taxes; he will take my money but no one elses

Now moving onto domaining it is similar; exponential growth but 40% growth a month? Not as quick as trading (if you're talented). It is possible though...

YOU must think exponentially

 

[dotgold]

It really depends. My close friend on a good week manages 40% a week. Say 1 Jan he has 10k; by the end of week 1 he reaches 14k. What he does is increase the size of the positions by 40% i.e. Maintain the same level of risk while adopting same strategy. Say for conservatism he averages 40% a month (not a week) you multiply 1.4 12 times exponentially. That results in a 50 fold increase in capital. He is a talented trader; I know of other traders who don't share this stuff and start with 15k ending up with 600k after one year AFTER taxes. I'm no good at trading but I keep myself abreast of everything that can affect the markets. My best is a double in a month. I'm gonna give him $1k soon so conservatively he'll get me $50k before taxes; he will take my money but no one elses

Now moving onto domaining it is similar; exponential growth but 40% growth a month? Not as quick as trading (if you're talented). It is possible though...

YOU must think exponentially

Yeah the stock market scales much easier that is for sure!

 

[Addison]

Looking for some background on the numbers behind the "game".

Three of my posts that offer some background:

On an annual average:
I sell one domain a week for four figures.
I sell one domain a month for five figures.
I sell one domain a year for six figures.

Most of my sales come from about 2,500 domains that I've acquired slowly over many years. I have 20,000 domains, but the rest are lower quality that sell for three figures.

2% is on the upper end for a superb domain portfolio.

Of my best 2,500 domains, I have a sell-through rate of 2.5% per year.

If I consider all of my domains, it's less than 1% for my domain portfolio, but 1% is plenty to make millions if you accumulate an impressive portfolio (quantity and quality).

How long does it take to sell domains?

It varies widely based on the quality of your domains and your price expectations (how much you want for your domains). As an average spread of quality and expectations, it takes roughly 2-10 years but eager sellers could see an average of 5 years.

In simplified math, that means you need about 5*365 = 1,825 good domains (and be willing to sell at average prices in the range $200-2,500) to sell one domain per day.


Limitations and delimitations:

• It doesn't work if you have 825 good domains and 1,000 below average domains.
• Domains that don't have broad appeal take longer to sell and may never sell.

 

[platey]

The stockmarket is a better investment than domain names

For the simple reason that when you buy shares you own the shares and Ok shares in stocks can fluctuate but if you invest well in good businesses as a rule you'll do OK long term although you should always factor a recession in to your investment in the stockmarket

But domain names are a much more risky investment

Any quick look at some of the stories in the threads on np make people think twice about buying or selling domains

Plus shares have a price that goes up and down based on market conditions

Domains have a price too - what ever pie in the sky price the seller can think of