domains We will see a 30%-50% crash in markets across the board - Predicts Andrew Rosener

[Haroon Basha]

One of the Top Domain Investor and industry expert Mr Andrew Rosener, Tweeted yesterday: "I don’t want to alarm anyone and I hate fear mongering…but, I highly suggest that unless you are completely financially independent and “free”, you should brace for impact. I believe we will see a 30%-50% crash in markets across the board. Have some physical cash on hand, raise whatever liquidity you can and cut your spending to absolute bare bones. This will be on par pr worse than 2008/9. The response will cause a spike in inflation and we will, in my opinion, see 7.5% or higher Fed Funds Rate within 12-18 months. Of course making the situation worse for most folks. Be prepared for 18-24 months of chaos, uncertainty and financial distress."

To a reader's question "what do you think is going to happen to domain values?
Rosener replies: Absolutely nothing will happen to domain values. But there won’t be much liquidity and so the price if you NEED to sell in the short term will likely be soft. Domain values are up and to the right for the foreseeable future! But the bid/ask spread for those that need or want to sell is going to widen quite a bit most likely.
Credit: Andrew Rosener is the founder and CEO of DomainX, LLC (as well as many other things), through which MediaOptions operates, which is the World’s #1 Domain Broker, and a boutique domain acquisition & domain brokerage firm specialized in ultra-premium & high value domain names.

 

[bmugford]

One of the Top Domain Investor and industry expert Mr Andrew Rosener, Tweeted yesterday: "I don’t want to alarm anyone and I hate fear mongering…but, I highly suggest that unless you are completely financially independent and “free”, you should brace for impact. I believe we will see a 30%-50% crash in markets across the board. Have some physical cash on hand, raise whatever liquidity you can and cut your spending to absolute bare bones. This will be on par pr worse than 2008/9. The response will cause a spike in inflation and we will, in my opinion, see 7.5% or higher Fed Funds Rate within 12-18 months. Of course making the situation worse for most folks. Be prepared for 18-24 months of chaos, uncertainty and financial distress."

To a reader's question "what do you think is going to happen to domain values?
Rosener replies: Absolutely nothing will happen to domain values. But there won’t be much liquidity and so the price if you NEED to sell in the short term will likely be soft. Domain values are up and to the right for the foreseeable future! But the bid/ask spread for those that need or want to sell is going to widen quite a bit most likely.
Credit: Andrew Rosener is the founder and CEO of DomainX, LLC (as well as many other things), through which MediaOptions operates, which is the World’s #1 Domain Broker, and a boutique domain acquisition & domain brokerage firm specialized in ultra-premium & high value domain names.

I don't think so.

Maybe in some of the more speculative asset classes like crypto, NFT, meme stocks, collectibles, etc.

When stuff is going up everything is "To the moon!!!"...When stuff is going down it is the end of the world.

The truth is somewhere in the middle.

In theory inflation should also cause many asset prices to rise. A scenario where you have both mass inflation and crashing asset prices seems unlikely. That is basically inflation and deflation at the same time.

Crashing asset prices would tend to take care of inflation by default. If there is less money available, prices drop. It is the natural ebb and flow of how the economy works

Brad

 

[GoKaizen]

1. Make dire economic prediction.
2. Low-ball small domain investors.

 

[bmugford]

There is certainly a reckoning coming for some of the highest risk investments though.

You can see it with the collapse of Silvergate and SVB over the last few days.

SVB specialized in higher risk loans to startups. The money in that field has gotten silly during the COVID boom. It is similar to the .COM boom. It seems there were more dollars than sense.

Lots of fake it until you make it companies will be washed away. We will see who is wearing clothes when the tide goes out.

Brad

 

[Recons.Com]

One of the Top Domain Investor and industry expert Mr Andrew Rosener, Tweeted yesterday: "I don’t want to alarm anyone and I hate fear mongering…but, I highly suggest that unless you are completely financially independent and “free”, you should brace for impact. I believe we will see a 30%-50% crash in markets across the board. Have some physical cash on hand, raise whatever liquidity you can and cut your spending to absolute bare bones. This will be on par pr worse than 2008/9. The response will cause a spike in inflation and we will, in my opinion, see 7.5% or higher Fed Funds Rate within 12-18 months. Of course making the situation worse for most folks. Be prepared for 18-24 months of chaos, uncertainty and financial distress."

To a reader's question "what do you think is going to happen to domain values?
Rosener replies: Absolutely nothing will happen to domain values. But there won’t be much liquidity and so the price if you NEED to sell in the short term will likely be soft. Domain values are up and to the right for the foreseeable future! But the bid/ask spread for those that need or want to sell is going to widen quite a bit most likely.
Credit: Andrew Rosener is the founder and CEO of DomainX, LLC (as well as many other things), through which MediaOptions operates, which is the World’s #1 Domain Broker, and a boutique domain acquisition & domain brokerage firm specialized in ultra-premium & high value domain names.

Wow, he is some economist, isn't he?

This one made me chuckle: There will a spike in inflation, so let's hold physical cash on hand

I also loved that his 30-50% crash is based on "I believe" ))

In other news, researchers discovered that the dominant factor in determining which person will be successful is not his/her IQ. It is ... luck.

 

[bmugford]

Digital Currency Group, also. This is still all FTX contagion

I wouldn't be surprised if groups pool together to get MicroStrategy/Saylor margin called.

Agree with you Brad speculation markets are at risk

Even in the domain world I would say the daily auction prices have kind of gotten out of hand.
The average price of many of these auctions is disconnected from an investment proposition.

If your STR is 1%-2% a year it doesn't make much mathematical sense to pay the current prices.

Brad

 

[Joe drake]

Is that andrew rosener from that AKA show on pushing nfts right b4 they crashed with the host jt aka mister clean.

 

[alcy]

bahahha...me I predict a 0 to 100% crash

 

[bmugford]

I have to say though that crashes bring some of the best investment opportunities for smart money.
It was during the 2008/2009 crash when I started to heavily invest in domains.

Crashes tend to wash out the stupid money. It happened in 2008/2009 in real estate when every random person was overpaying for homes and using exotic loans like interest only, balloon payment, adjustable rates, etc.

When everyone is making money, that tends to be the peak of a bubble.

Brad

 

[bmugford]

There is still too much risk taking. There is no learning from previous mistakes. Many employees have never experienced a major crisis. Etc.

It is the fundamental foundation of every crash. Greed, which leads to excessive risk taking.

Consumers are now basically dealing with record personal debts. Much of this debt has been acquired via reckless discretionary spending. Many people live well above their means.

All the excessive spending has to wait if you can't pay your basic bills.

Brad

 

[Recons.Com]

It depends on the sales price.

I see a lot of auctions for average domains go for like $500 - $1000. When I look later many of these domains are priced in a $3k - $5k range.

Unless a domain has high liquid value, I would want much higher margins.

The problem too is costs are know where sales are unknown. I like a high margin of safety.

Brad

There are few factors contributing to this:

- No brainer names are too obvious by definition and attract too many eyeballs and people get engaged in wars forgetting the margins

- Domain investment 101 dictates that the beginners should choose names that already have 3-4 bidders in, to kind of piggy back on their knowledge and research. Hence uneducated buyers adding the fuel.

- Rising renewal costs and stagnating economy forces to focus on reducing the operating costs, even if it means paying higher upfront investment. You perceive the limited 15%-25% return with little downside superior to 50%+ possible one with closeout/handreg that could potentially turn into zero or negative with 3 more .com price increases planned and decreased STR.

 

[Joe drake]

If the economy crashes as much as domain sherpa did when they brought in AKA man we are in for a doozy!!!!

 

[MSN-Domains]

You can see it with the collapse of Silvergate and SVB over the last few days.

Digital Currency Group, also. This is still all FTX contagion

I wouldn't be surprised if groups pool together to get MicroStrategy/Saylor margin called.

Agree with you Brad speculation markets are at risk

 

[bmugford]

Actually 2% could justify paying high prices, if your alternative is holding cash in CD for 3% a year.

Given that the auction names are priced higher, let's say $5k, if you were to buy 1000 names, you'd be selling $100k worth a year, minus $10k for renewals, minus $15k commission, so $75k net.

If you are happy with 15% return, then you'd be willing to pay 75k/15%=500k for that or $500 per name average for those 1000 names.

It depends on the sales price.

I see a lot of auctions for average domains go for like $500 - $1000. When I look later many of these domains are priced in a $3k - $5k range.

Unless a domain has high liquid value, I would want much higher margins.

The problem too is costs are known where sales are unknown. I like a high margin of safety.

Brad

 

[Future Sensors]

 

[Future Sensors]

I still don't get it how does it possible ? So powerful banks and got bankruptcy . Something fishy with that banking crisis . Not real Just market manipulation

There is still too much risk taking. There is no learning from previous mistakes. Many employees have never experienced a major crisis. Etc.

 

[bmugford]

There are few factors contributing to this:

- No brainer names are too obvious by definition and attract too many eyeballs and people get engaged in wars forgetting the margins

- Domain investment 101 dictates that the beginners should choose names that already have 3-4 bidders in, to kind of piggy back on their knowledge and research. Hence uneducated buyers adding the fuel.

- Rising renewal costs and stagnating economy forces to focus on reducing the operating costs, even if it means paying higher upfront investment. You perceive the limited 15%-25% return with little downside superior to 50%+ possible one with closeout/handreg that could potentially turn into zero or negative with 3 more .com price increases planned and decreased STR.

Yes, there is always a line of new investors willing to step in.

This is often because they have been lead to believe that it is easy money, which is far from the truth.

Brad

 

[forge]

^ isn't it like 3 weeks away from April 1st?

 

[Recons.Com]

Even in the domain world I would say the daily auction prices have kind of gotten out of hand.
The average price of many of these auctions is disconnected from an investment proposition.

If your STR is 1%-2% a year it doesn't make much mathematical sense to pay the current prices.

Brad

Actually 2% could justify paying high prices, if your alternative is holding cash in CD for 3% a year.

Given that the auction names are priced higher, let's say $5k, if you were to buy 1000 names, you'd be selling $100k worth a year, minus $10k for renewals, minus $15k commission, so $75k net.

If you are happy with 15% return, then you'd be willing to pay 75k/15%=500k for that or $500 per name average for those 1000 names.

 

[AEProgram]

The greatest bull market happened after the big panic in early 2020. Most "experts" predicted that 2022 will be a bullish year for stocks, they were wrong. Now I am seeing the majority say that everything or almost everything is about to collapse.

If the markets went by reality, it should already be down 50%. Consumer credit card debt reached an all time high. Subprime auto loans are having issues. Inflation is still hot. Companies started to lay off many people. The job market is strong and weak at the same time. Amazon halted the building of their VA project. There is a lot of factual bad and the market is pretty strong. Even with this SVB event, the market drop is nothing compared to what a bank collapse should cause, even a small SVB bank. The market responded more violently over a crypto exchange collapse than over a mainstream bank collapse. The point is, anyone looking to predict the market using rational thinking, is going to be disappointed.

The intraday moves itself in the market make no sense. Have you guys looked at the swings that are happening without any news or event going on that is changing anything?

The markets do not follow logic. Invest in it like you do in domains, long term. Think 10 years out and buy the best you can.

There are a lot of people with a ton of money. Just go look at the hotel prices of any 5 star hotel. Ask Ferrari, Lamborghini and Rolls Royce how their sales are doing? There is a wait for 60 million dollar jets. And you have more real estate sales of 25 million dollars or more than ever before.

 

[silentg]

Camp.com sent out this:

https://twitter.com/x/status/1634302900145905665

Feel bad for all those who are not going to get paychecks.

 

[clarkemarketing]

Personally, I can't see this happening! The world's two largest economies, USA & China (almost half the world's GDP), are both on a positive trajectory.

America's unemployment is lowest it's been in more than 50 years, people are getting raises, even low income jobs like Walmart and McDonalds are seeing big raises. Could highly speculative assets see a haircut, sure! Will stock market multiples go down, very possibly! But are we going to see a nasty crash like the 2008... I just don't see it when consumer spending is so strong.

I understand China less, but it seems fairly obvious that a post-Covid reopening is bullish. Look at the West, we are still spending money like crazy on travel and restaurants. I have to believe the Chinese will too... after a rough couple years I would be surprised if they don't fly all over the world and spend spend spend.

 

[J.R.]

Explain to me how customer deposits being lost would be more beneficial. You don't think deposits being lost would lead to bank runs not just at small banks, but at the larger ones as well?

Brad

Its a lesser of many evils scenario, that we will better understand by the end of the week.

Bailouts only increase moral hazards and inflation, and encourage bad management aka "too big to fail".

Looking at the FDIC balance sheet, how many failed deposits above the $250K insured can they fund? Then you have the Fed, $0 mortgage backed securities in 2006, $1.4Trillion to close 2020, and $3T today.

Its a question of tradeoffs and which actions will deter other bad actors from gambling with depositors money.

With possibly 15-20 banks being seized by the end of the week, this could be worse than 2008.

Saving insured and uninsured SVB depositors didn't stop the contagion, it has only spread it quicker. How many uninsured depositors can they save this week?

What are the unintended consequences of these actions in Q2-Q4 2023?

 

[3sixty]

This is the guy who tried to justify bidding on your own domains at auction.

 

[Reallybigidea.com]

Now this:

Signature bank https://www.forbes.com/sites/qai/20...silicon-valley-bank-collapse/?sh=5ac339125a4b

First republic bank https://nypost.com/2023/03/13/first-republic-bank-falls-over-60-after-svb-signature-collapse/

American banking crisis is already here.