Will the stock market fears help domain speculation?

[~ The 34 Year Buzz!!]

If the stork market continues to fall, people will be searching for a place to put their investment money.
With gold already at all time highs, do you think 1000's of new people will discover domain prices going up?

 

[rkbdomain]

Yes. Especially for .com's, these are essentially prime real estate that is fixed. There are never going to be any more LLLL.com's or NNNN.com's. And the values for these things are only going to go up as more and more people around the world use the internet and need quality domains that are not 12zc9n209d-----298h.biz. Me, I've pulled some of my money out of stocks and put it into registering a significant portion of the NNNNN.com's, there are under 18k of these left out of only 100k total, and again, the supply of numbers is limited but the uses for them and the need for them will continue to expand with time. So domain names (especially at bulk prices of $5-7 each, and if you can make back some of that with traffic) are a very solid investment with huge growth potential in my opinion.

 

[~ The 34 Year Buzz!!]

Yes. Especially for .com's, these are essentially prime real estate that is fixed. There are never going to be any more LLLL.com's or NNNN.com's. And the values for these things are only going to go up as more and more people around the world use the internet and need quality domains that are not 12zc9n209d-----298h.biz. Me, I've pulled some of my money out of stocks and put it into registering a significant portion of the NNNNN.com's, there are under 18k of these left out of only 100k total, and again, the supply of numbers is limited but the uses for them and the need for them will continue to expand with time. So domain names (especially at bulk prices of $5-7 each, and if you can make back some of that with traffic) are a very solid investment with huge growth potential in my opinion.

Sounds like a great time to be involved.

 

[KingDon]

If stock market ever collapsed, the .com would still have value in our global economy. Many investors are looking into domains as a safer place to put their hard earned money.

The 99 bubble burst is long gone, the market is starting to realize that investing in the internet, is no longer a regional investment; we're a global force. Or should I say, "We Are The World".

 

[bricio]

it isnt speculation; this fear will help prices to increase in the years to come
people, as KingDon said, are always looking for the best investment with the lowest risk as all investments have risks
domains are great investments because you can have a good profit and a low risk but you have to learn and undestand domaining (it isnt simple as it can seem to be)

 

[yandig]

The attractiveness of domain investing should appeal to more and more individuals and companies as the internet continues to grow.
I maintain my own stock market blog, and follow the market very closely. I tell people from time to time that a stock is only worth what someone is willing to pay for it. It doesn't matter if the market has historically always bounced back to post gains. There will come a time (maybe soon) when investors seek other places to put their funds, and a stock's market value will not hold 15-20 times earnings anymore. We live in an era where it is becoming more and more possible to double one's money quicker than a person can in the stock market.
The viability of domain investing depends on the stability of the internet as a global medium. This seems fairly certain for the next decade or two. It also depends on the continued use of domain names as the means to navigate to a desired location on the web. There is no guarantee that some other system won't replace domains in this capacity. However, the investment in domains looks pretty safe for the next few years.
My perception of the 'net is that it will continue to gain additional users for 10-20 more years, and then the entire world will be using the internet everyday, for every kind of activity under the sun. At that point, we may see a decline in the value of domain names as internet usage levels off, if domains are still in use.

 

[KingDon]

yandig, I like the way you think. I personally believe that .com's will perform well for at least 20-30 years. But by then, most of us will be into something else; ten years is a long time. Things usually change with the newly socialized youth; most people here probably never used a typewriter; or how to even change a ribbon in one.

The printer killed the typewriter, but that same printer made the desktop computer a household item. Until that is replaced within an entire generation of our young, we'll continue to use internet domain names for our online activity.

I do agree that in the future, our day to day lives will depend heavily on the internet. Right now the internet is changing the way we digest our news, education, entertainment and it’s becoming the normal way to socialize. This trend doesn't look likely to change; except in becoming more dominant in helping to meet our information needs.

It will be 30-50 years before all the cars are electric of green fueled, and that's the paralleled analogy I like to use, when forecasting the future of internet investing. I think the longest you can register a name for is 10 years; wouldn’t that be fun to register all your LLLL.com names for ten years, and then come back into the game.

I bet you would be rich compared to any stock investment; the poor mans college fund.

 

[tpruby]

Thousands of people may discover domaining and thousands of people will lose their money....

I would bet there are very few people anywhere that would consider sinking tens of thousands of dollars into a domain name and all because the economy has slowed down.

Domaining isn't a great secret....Wall street or Bay Street aren't paying attention for a reason....and I highly doubt that it is because they are ignorant.


Will we even use .com or the internet as we know it in 10 years? How could anyone justify putting their life savings, retirement fund or even a significant percentage of their savings into a .com? Too risky...way too risky.

I think long term, domaining hasn't proved itself as a sound long term investment, and how could it....it's so new.

Sure, there are tonnes of stories all over namepros all about a small number of people selling names for XXX,XXX, but what about the thousands of people who do nothing but lose money?

So, like I say, I don't see hundreds of thousands of people betting their future on buying one .com?

If everyone got involved in domaining...wouldn't that saturate the market?

 

[~ The 34 Year Buzz!!]

...If everyone got involved in domaining...wouldn't that saturate the market?

Don't need everyone, the main idea is we still have room for an expanded boom period. Many areas of China and India will come online for the first time in the next 5 years.

 

[tpruby]

I guess the big thing for me is that I've never read anything or seen anything that has convinced me that domain name investing is a proven, time tested and smart way to invest money over the long term.

How could it? It's so new.

 

[yandig]

Sure, there are tonnes of stories all over namepros all about a small number of people selling names for XXX,XXX, but what about the thousands of people who do nothing but lose money?

Just out of curiosity...who has LOST money in domain names???

 

[snoop]

If the stork market continues to fall, people will be searching for a place to put their investment money.
With gold already at all time highs, do you think 1000's of new people will discover domain prices going up?

No, in fact the domain market looks to have already weakened. Domain names aren't comparable to gold, they are highly leveraged to the strength of the economy.

 

[tpruby]

Just out of curiosity...who has LOST money in domain names???

I'd safely wager that more people lose money buying domains than there are people who make money.

I'm not talking about people who may make a $2 profit on a flip...I'm talking about domaining as a sound, wise and long term investment strategy.

 

[snoop]

Just out of curiosity...who has LOST money in domain names???

Well, they aren't exactly rushing off to tell dnjournal about it. Most of these people are now painting fences and looking for the next get rich quick idea. You can see their names in the daily drop lists.

Here is one guy who lost a bundle though, Maurits Paul Rijkeboer, who bought Video.us for $75,000 only for it to be dropped and resold at auction for $18,500.

 

[DomainLobe]

I think the longest you can register a name for is 10 years; wouldn’t that be fun to register all your LLLL.com names for ten years, and then come back into the game.
I bet you would be rich compared to any stock investment; the poor mans college fund.

Funny, I have thought of doing this with a number of my best .coms - LLL, LLLL, semi-generic .....

Having been through stock & real estate markets undulations for over 10 years I have become more of a 'buy(low) and hold(forever)' investor even with most of my DN investments.

I might just do this with a few quality names for my kids education fund.
Cheers

 

[KingDon]

tpruby, interesting post. What makes me wonder is why I would disagree with just about everything you say; and I don't mean that in a negative way. I honestly can't follow what you see, and that makes me curious as to why.

I only follow a few trends that I’m interested in, so I'm not really sure how people are doing with other domain investments. But for some weird reason, most of the people I associate with, are doing very well with their investments. I can honestly say that I don't chat with anyone who has lost money overall with their domain investments; and that's not by choice.

I'm sorry to hear you might have lost money investing with domains. Did you manage to buy any LLLL.com's at reg fee when they were available? These are the things I've been watching most recently. Personally I've never had a $XXX,XXX sale, but my best was $18,500 from a reg fee domain name 3 years ago; and amongst the multiple low $X,XXX sales I have each year, I do get the occasional $5-9K sale on top of them.

I couldn't make this kind of profit with $7,000 in the stock market, but that’s all it costs me each year for reg fees. Doing this has put me through 5 years of college and university; and it will pay the bills for law school. Maybe you’re listening to the wrong people.

Here’s my professional opinion, buy a little of everything, and a lot of nothing. But as one fellow member to another, you don’t sound very happy about being here in the domaining community; you may want to find another hobby/investment. I say this with no intent to piss you off, I wrote this response without emotion.

 

[tpruby]

tpruby, interesting post. What makes me wonder is why I would disagree with just about everything you say; and I don't mean that in a negative way. I honestly can't follow what you see, and that makes me curious as to why.

I only follow a few trends that I’m interested in, so I'm not really sure how people are doing with other domain investments. But for some weird reason, most of the people I associate with, are doing very well with their investments. I can honestly say that I don't chat with anyone who has lost money overall with their domain investments; and that's not by choice.

I'm sorry to hear you might have lost money investing with domains. Did you manage to buy any LLLL.com's at reg fee when they were available? These are the things I've been watching most recently. Personally I've never had a $XXX,XXX sale, but my best was $18,500 from a reg fee domain name 3 years ago; and amongst the multiple low $X,XXX sales I have each year, I do get the occasional $5-9K sale on top of them.

I couldn't make this kind of profit with $7,000 in the stock market, but that’s all it costs me each year for reg fees. Doing this has put me through 5 years of college and university; and it will pay the bills for law school. Maybe you’re listening to the wrong people.

Here’s my professional opinion, buy a little of everything, and a lot of nothing. But as one fellow member to another, you don’t sound very happy about being here in the domaining community; you may want to find another hobby/investment. I say this with no intent to piss you off, I wrote this response without emotion.

I have no issue at all with your post. I'm not sure why I sound bitter, I'm just pointing out that average people shouldn't bet their futures on buying a handful of .coms.

The question posed was whether people will shy away from Gold and traditional investments, in favour of domaining.

Ok, so lets pretend as the question asked, that domaining goes main stream. Let's say 100 million people around the world start domaining, because everyone agree's that parking your money in a domain is safer and wiser than parking your money in gold or stocks.

Then what? 100+ million people buying domain names? How's that going to work?

Lastly, without question, domain name values are dependent upon the economy performing well...

Sometimes I sense an awful lot of cheer leading going on around here...and just because I don't agree with what I read, certainly doesn't mean that I'm not happy domaining.

 

[KingDon]

The question posed was whether people will shy away from Gold and traditional investments, in favour of domaining.

For me the answer is yes; I did.

Then what? 100+ million people buying domain names? How's that going to work?

For me, the answer is 100+ million more people will come online. When small town baseball fields grow in size with reconstruction for more seating, so does the concession stand.

Lastly, without question, domain name values are dependent upon the economy performing well...

For me, the answer has more to do with who fuels the internet economy for domain names. Ten years ago, .com's were an American investment; now most of my sales are foreign, and I saw it coming.

I believe we are both seeing the same picture, we're just reacting to different stimuli.

 

[geb9696]

This thread has been a very interesting read for me but I think people are misunderstanding a few things here. The US stock market has fallen because of a horrible credit situation in the US that is spreading and starting to become a global problem. The global liquidity that analysts had been clamoring about for the last two years seemed to disappear overnight once the market tumbled last August. The US stock market is falling because of the very real fear that a recession will be hitting the US. Many indicators have the US economic situation getting much worse before it begins to turn around.

If people are losing money in the stock market will they turn to domains? My personal answer to that is HELL NO! A vast majority of the US investing money is handled by big Investment Banks and financial planners. If someone is losing money in the market it is important to understand two things. First if they are losing money then they have less disposable income which means they are even less inclined to move into "risky" investments such as domains. The second thing is as people lose money it is only natural to want to move into safe investments which have historically been government bonds. The money might flow away from the stock market but it will be moved into Cash and Cash Equivalents or the long term government Bond Market.

It is important to remember that most people do not have the time or energy to spend researching what domain names are doing. On top of that the current domain name market is not nearly liquid enough to handle the type of investors you guys are predicting. You think people are going to switch from being able to buy and sell in less then a second by clicking a button to having to solicit buyers and waiting weeks sometimes even months to unload a name?

The stock market is attractive because it is easy not because of the outstanding returns that the investors receive. If someone wanted to get similar returns to what some domainers are seeing they have other more tradition options to turn to such as derivatives and futures trading.

Overall I think when looking at the domain business it might be wise to forget about the LLLL.com market trends because what we are experiencing right now is not normal. If we see a worldwide depression do you really think companies are going to care about owning the acronym to their name with a LLLL.com if they cant even pay their employees? Not only that, when times get tough marketing is one of the first budgets to get cut back. All of the growth that people are projecting for online advertising would be gone. We shall see how much domains are worth if people are no longer willing to pay for the traffic that the names bring. Anyway enough ranting from me.

 

[snoop]

Not only that, when times get tough marketing is one of the first budgets to get cut back. All of the growth that people are projecting for online advertising would be gone.

A very good post, you raise some great points, I think the PPC market cutbacks are already in motion.

"Outlook for the US Online Advertising Industry"

"Some industry analysts are now concerned about the cyclical exposure of the online advertising industry to an economic downturn. Whilst online advertising is still one of
the most cost effective methods of advertising, it is also one of the easiest to cancel. And cancelled online advertising can lead to immediate price impacts through the auction transmission mechanism outline above."

.......................
"In December, the company noticed that a couple of very significant internet
advertisers had scaled back their online advertising leading to a significant diminution in the price per click received from its major upstream advertising partner. A number
of industry commentators have also noted that December appeared to be a poor month for the online advertising industry."

..................

"Whilst there has been some recovery in January, prices are still well below levels of three months prior. In the context of the current US economic environment, it is possible that similar shocks may occur over the coming months. In summary, as the expected US economic slowdown unfolds, we are heading into
uncharted waters. Despite the continued strong secular trend for the online
advertising industry, the cyclical factors are likely to have some negative influence and, as of today, a wide range of outcomes appear possible."

http://darkbluesea.com.au/announcem...cember_2007_Quarterly_Update_Draft_4.2.08.pdf