A bargain today is no bargain tomorrow.

Should a low quality LLL.com for $6000 or an LLLL.com for $25 be considered anything other than the reality of today?  Will a bargain today still be a bargain tomorrow, next week, next month?

The market has been moving very quickly lately and what looked like a stable low end LLL.com market 2 weeks ago now appears to be a struggling low end. After 5+ years of unchecked gains, reality is finally beginning to sink in that many investors in this space were using little logic and merely “following the herd” in their investment approach — we’ve seen this in the LLLL.com market as well and the result of this has been catastrophic to domainers who invested in low end LLLL.coms near the market’s peak in mid-February 2008.

People can blame poor sales on oil, a U.S. recession, etc but the bottom line is that good names are still fetching reasonably good prices, whereas the more speculative investments (like .mobi, LLLL.coms, most cctlds) are and have been struggling for awhile now. With LLL.coms, we’ve seen people pay out of this world prices based on nonsensical revenue multiples and often seemingly non-existent enduser potential.

What does the future hold? Snoop says low quality LLL.coms may be headed downwards towards the 3-4k mark and I believe he may very well be right. As for low end LLLL.coms, while they appear to have temporarily stabilized, I expect that we’ll see further devaluation before renewal time. Assuming LLL.coms continue to struggle, how might this affect the CVCV and higher quality LLLL.com markets?

Interesting times… Lots to consider before making an investment in either LLL.coms or LLLL.coms with anything other than a long term investment strategy. Regardless of whether you opt to invest in the LLL.com or LLLL.com markets, my advice is to look for quality investment grade domains — domains that hold value not solely due to hype.

My experience as of late has been that Quality LLLL.coms can at least still be sold in bulk for reasonable amounts: http://www.bqb.com/auction_details.php?auction_id=112772 . This has not been proven to be the case as of late with lower quality LLLL.coms — something else to consider before investing in the low end expecting to make a quick flip.

 Source: www.LLLL.com


~ by Reece on July 3, 2008.

4 Responses to “A bargain today is no bargain tomorrow.”

  1. […] price of any LLL.com does dive to the $5000 level, I might be tempted to buy one. Bargains Ahead! Maybe… This entry was posted on Thursday, July 3rd, 2008 and is filed under Uncategorized. You can […]

  2. I think the important idea here is, as you’ve said countless times, to only invest as much as you can seriously afford to lose, and I think a lot of people have not done that, thinking that all LLLL.coms are going to pay for themselves just through flipping.

    That’s not to say that people shouldn’t try to make money, or that one should be needlessly negative, but remember that there is no guarantee to getting rich quick…or even slow.

    If someone is spending hundreds or thousand dollars on domain names, that person should be very aware of the strong likelihood that those domain names may be inherently worthless at any time, and prepared to realize that those funds may be irrecoverable.

    I mean, this is just common sense, isn’t it?

  3. Well said Destina.

    The wild card ICANN threw us recently with the announcement of hundreds of new extensions is a perfect example of how little control a domainer has over what happens in this industry. To paraphrase what Snoop said in the previous blogpost: it starts getting worrisome when someone starts believing that something can only go up (and not down) because it has been going up for so long. We’ve seen this with LLL.coms, we’ve seen this with oil, we’ve seen this with gold, and when (it’s not a question of “if” imho) they come crashing down, there’s going to be a lot of unhappy investors who invested more than they could realistically afford
    to lose.

  4. Unfortunately, I am see the same trend prices are dropping. The economy in a turmoil and forecasted to continue like this well into 2009 by some of the most notable economists. Then you have the revenues of parked domain names declining with new extension poping up more often. Domain name registration prices are gradually going up outside of international domain names that already priced high.

    The only factor I see in play is the fact that more and more people continue to come online.

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