discuss Upcomming 5l prediction

[Flipsbay]

Hello guys,

8 Months ago i was some what predicting 5l is the next big thing at that time some said its idiotic to think like that, some said impossible, some said only pronounceable are worth something. Now 2016 answers all those questions. We are looking even a bigger market than the so loved 4L.com domains

Anyway enough with the intro, what i wanted to know from you guys is what you think the future of 5l.com, both chips and pronounceable ones.

I think :

*** Random 5l chips will have 20$ each value
*** Types like ABAAC, ABACA will be at 70$ each
*** Types like AAABC will have 120$-150$
*** High End like AAAAB,ABAAA will worth 2000$

Yes above statements are purely what i think and has nothing to do with absolute truth, and i am also collecting sales data for some what accurate pricing but for now i think that has to wait another 3 months

Lets see what you guys think

Thanks.

 

[Flipsbay]

So, 5L.com is now a currency and is similar to bitcoin? Tell me, what is the renewal fee on $50 "bill" of bitcoin?

lol i was just giving you a 3rd option , if it looks stupid then our investment is stupid mate

Thanks.

 

[Recons.Com]

lol i was just giving you a 3rd option , if it looks stupid then our investment is stupid mate

Thanks.

Sorry, did not mean that. And am not trying to spoil your investment. Just want to make sure that you guys realize that it is risky proposition based on many things working in your favor. Don't base your decision on, e.g., LLLL.net buyout returns. The investment has many red flags all over it, but it might turn out to be high risk -> high reward, if you manage to sell for $50 what you bought for $5-8 per name within a year.

Your bet might be based on this:

- Invest $1000 and buy 200 5L.coms
- 85% chance that I will get around $0
- 15% chance I will get $10,000 for it.

85%x0+15%*10,000=$1,500, net profit of $500.

Now, this is very simplistic, and there are not 2 discreet possible outcomes, % are made up, although they do reflect that there is bigger chance of bust, but if it is based on analysis like this, fine. You still end up making $500.

But I would still recommend buying 3 decent good quality LLLL.coms for $1k, you'd probably make still around $500 with much less stress and downside.

 

[Asfas1000]

Recons, thank you for your detailed analysis. I couldn't find a hole, but ...it can't be valid IMO
I mean, if the LLLLL.com value is at $110, the $8 renewal is a small % only..
Hmmmm checking checking

 

[Asfas1000]

OK here is why I believe the parallelism to the PV value is not perfect :

As you put it, buying a 5L.com is like having a -$200 liability, due to the renewals.
However, unlike a bank who is obliged to pay the 4% rate, you can stop renewing, and limit your liability to $8 or $16 etc.
This is your decision, not the registry's

So if you decide it doesn't work, you can exit....what do you think ?

 

[TMarkus]

In financial world, you assume that the current market price reflects all future expectations as well.

You are right if you are talking about real world assets with real company cash flow.

But if you are talk about assets like domains.... 4L.com may easy go to 4-5K levels within 2-3 weeks ))

 

[Recons.Com]

You are right if you are talking about real world assets with real company cash flow.

But if you are talk about assets like domains.... 4L.com may easy go to 4-5K levels within 2-3 weeks ))

This principle is universally applied. Cash flow is not a must know. It is enough that it is expected and you valuate future cash flows or that it is comparable to another asset that is shown to be profitable and then you use comps.

In the above calculations, I used comps from established asset class of 4L that is most relevant to 5L.

And the comp can be tested from 4L to 3L to check if it holds more or less true:

($2000+200)*20 - $200 = $43,800 floor which is more or less in the ballpark (4L.com floor is probably more like $2,200, then 3L.com floor calculated would be around $$47,800. So there is even some premium of 10-20% for shorter category, which makes it even worse for 5L category).

 

[Recons.Com]

Recons, thank you for your detailed analysis. I couldn't find a hole, but ...it can't be valid IMO
I mean, if the LLLLL.com value is at $110, the $8 renewal is a small % only..
Hmmmm checking checking

If and when 5L.com is $110, it means the buyer has already factored in $8 renewals and he really values the name at $110+200=310$ compared to a zero renewal fee .com (if it existed). That would also mean that he is valuing 4L.com at (110$+$200)*20 - $200 = $6000.

 

[TMarkus]

That would also mean that he is valuing 4L.com at (110$+$200)*20 - $200 = $6000.

Hm. I think After 5L.com buyout many and many 4L.com owners may deside together within short time period that their 4L.com should be around 4K-6K levels. Just because 5L.com buyout happend. and price for 4L.com rapidly go to higher levels. It may be started by some big players and there will be wave of growing and fixation at new levels.

All this may be done within 2-3 weeks.

 

[Recons.Com]

Hm. I think After 5L.com buyout many and many 4L.com owners may deside together within short time period that their 4L.com should be around 4K-6K levels. Just because 5L.com buyout happend. and price for 4L.com rapidly go to higher levels. It may be started by some big players and there will be wave of growing and fixation at new levels.

All this may be done within 2-3 weeks.

Sure. And that is a valid view and possible outcome. As long as you base your bet on that and don't place all your eggs in that basket.

Generally, it is wise not to allocate more than 20% of your total investment into very risky instruments, and even for that 20% spread it across few categories/types of assets.

 

[Asfas1000]

If and when 5L.com is $110,

I meant right now, as 1/20th of llll.com

 

[Recons.Com]

I meant right now, as 1/20th of llll.com

But that is definitely wrong approach!

If someone holds QWRT.com and another one holds QWRT+L x 20 chips, would you say it is the same? The owner of the former has to pay $8/year, the owner of the latter has to pay $160/year.

 

[TMarkus]

the owner of the latter has to pay $160/year.

thats why big players must promote market of 5L.com for levels $200-$250 per domain in long time distance.
and this will be done ))

 

[Recons.Com]

thats why big players must promote market of 5L.com for levels $200-$250 per domain in long time distance.
and this will be done ))

Well, if they do, I will get a free ride along with my 4L.coms )) I won't be holding my breath for now, though ))

And when you say "long distance", please do remember that this cannot be done slowly over time. It has to go up quickly before the renewals are due and if by the time renewals are due the floor is not established and firm, the whole "sand dam" will just wash off...

 

[TMarkus]

Yes. it is quite risky ivestment. and it is not depends on small investors with portfolios 1-10K domains.
The big players with portfolios 100K-500K domains together will create the market.

if they can do it - we all earn money. if not - we all loose )))

 

[Asfas1000]

But that is definitely wrong approach!

If someone holds QWRT.com and another one holds QWRT+L x 20 chips, would you say it is the same? The owner of the former has to pay $8/year, the owner of the latter has to pay $160/year.

Of course, but still a small % compared to the $2000 value.

I just don't get how an asset can be -$90 net value, when it costs $8...at worst you bought something useless and you're out $8.

 

[Recons.Com]

Of course, but still a small % compared to the $2000 value.

I just don't get how an asset can be -$90 net value, when it costs $8...at worst you bought something useless and you're out $8.

If you bought something that can have equity of $110 and liability of $200, then the asset is worth $-90

 

[krx]

i am building a function that is just to solve the issue you mentioned, submit a list and that function will tell you how many AABBC,ABACD etc pattern are there and what is the base price for them and what this lot can worth based on sales data

That would be a very handy feature.

 

[mitok]

Imagine one has $200 to invest. He is offered an investment option of 4% for year as long as he wishes. So, he'll be getting $8/year guaranteed. $200x4%=8$. Reverse of that calculation is $8/4% = $200, which means if you are offered a lifetime of revenue or expense of $8/year, that is equivalent of $200 or its (lifetime) Present Value. Why 4%? The higher the certainty of revenue/expense, the lower % rate associated with it. High certainty -> low rate. Since you are guaranteed to pay at least that, the rate for analysis has to be low.

Now, if someone pays $2000 for 4L.com chip he already factored in (even if he does not realize it) the PV of all renewals. Would he pay $2000 for 4L, if the renewal was $1000/year? Of course, no. And if he knew there is no renewals for 4L.com? He'd pay $2,200.

Now, we use widely accepted in the domain world concept that all the names of the following string should have similar value as one name of the previous string.

As there are 20 chip letters, QWRT.com would have the same value as all 20 QWRT+L.com names. But people forget here doing the adjustment for renewals.

So I use this method with the adjustment. $2,200/20=$110. That would be value of 5L if there were no renewal fees. But we already calculated that PV of .com renewals is $200. So we deduct $200 from $110 and arrive and negative value of $90.

Hope it helps )

I agree with your calculation, but not in any case. This works only for pure commodity domains accepted only as commodity, without any psychology factor included. Well, that is almost impossible.
So many Chinese investors invested in 5L.com chips (registrations and purchases). So psychology factor is already included here and tells that people believe 5L.chips are worth at least $8 at the moment, not -$90. There are also many example from the past when the price went up after the buyout so this is what many expect in this case too.
There are also many potential end users (many 5L.com chips are developed sites) so this is a bonus to fundamental value. There will be other bonuses soon, such as disability to register any 5L.com chip.
If people believe 4L.com chips will go up this is also a bonus for 5L.com chips price and will be included in the market price immediately. Expectations are always included in the price even before expected scenario occurs.

I traded a lot with stocks and I am aware that fundamental value is just ONE PART of current market value.

 

[urlurl]

That calculation is only good for random letter combo's
There is a large range of values for 5L's, and those with value before sold will always sell for good money.

 

[krx]

Imagine one has $200 to invest. He is offered an investment option of 4% for year as long as he wishes. So, he'll be getting $8/year guaranteed. $200x4%=8$. Reverse of that calculation is $8/4% = $200, which means if you are offered a lifetime of revenue or expense of $8/year, that is equivalent of $200 or its (lifetime) Present Value. Why 4%? The higher the certainty of revenue/expense, the lower % rate associated with it. High certainty -> low rate. Since you are guaranteed to pay at least that, the rate for analysis has to be low.

Now, if someone pays $2000 for 4L.com chip he already factored in (even if he does not realize it) the PV of all renewals. Would he pay $2000 for 4L, if the renewal was $1000/year? Of course, no. And if he knew there is no renewals for 4L.com? He'd pay $2,200.

Now, we use widely accepted in the domain world concept that all the names of the following string should have similar value as one name of the previous string.

As there are 20 chip letters, QWRT.com would have the same value as all 20 QWRT+L.com names. But people forget here doing the adjustment for renewals.

So I use this method with the adjustment. $2,200/20=$110. That would be value of 5L if there were no renewal fees. But we already calculated that PV of .com renewals is $200. So we deduct $200 from $110 and arrive and negative value of $90.

Hope it helps )

Correct me if I am wrong here, but is the basic idea that the current real value of any given domain reflects the cost of 25 years of renewals? That seems to be the way you arrive at a value of negative $90. Is that correct? Just want to be sure I understand it.

Wondering how that idea stands up against the more traditional one that the value of a domain (like a house, or a painting, or whatever) is what the market will pay for it.