Part 2: I Asked 7 Top Domain Investors What They See for 2016: With Oliver Holger, Andrew Rosener, Yoni , and Josh Eisenhower

Feb 05 2016

Yesterday was the first part in our series of asking a few questions to some of my domain investing friends.  Friends that happen to be some of the best domain investors in our industry.  Many of the biggest and most successful domain investors are behind the scenes.  Those who actively participate know who they are. They don’t blog, don’t comment on the blogs, and generally conduct their business in private.  But they have an understanding of the current market  as anyone you could talk to. I am fortunate to get to talk to these guys almost every day so I thought I would have them share some things with our readers. I asked them all the same questions.  Some chose to skip some questions as to not give away their secrets but I think you’ll find each person’s answer interesting and a good peek into what they see.  And before you get to the questions, a little background on the fun question at the end.  We had a soccer tournament at NamesCon this year and I brought Josh E aka Ike who writes for this blog.  He played goalie despite the fact he had never played in his life and yet he played incredibly well.  Nobody knew who he was when we started but they all knew who he was when we finished.  Also, I didn’t include photos of the guys.  You can Google them, and I was going to steal the pictures from Google or DnJournal anyway.  Now on to the questions.

 

Andrew Rosener

I don’t really have to introduce Drew.  He is the owner of Media Options, a fellow panelist on Domain Sherpa, and simply one of the biggest and best domain brokers in the world.

 

  1. Where do you see the domain market at the end of 2016? Do you see the domain market moving higher, staying the same, or just stabilizing. Why?

 

I believe that 2016 will be a turbulent year, influenced by a tremendous number of unpredictable variables from the US Presidential Election to wild currency swings, particularly between the USD and RMB.   But I think the net result of 2016 is that by year end we’ll see substantially higher valuations and sales prices on short, super premium .com domains (everything from one word brands to short acronyms and numerics).

 

  1. How about the Chinese market specifically. Shorts, numerics, etc

 

The Chinese market will be difficult to judge as there will likely be more and more people entering the market in China driven by wild swings in their Stock Market as well as local economic uncertainty and an overall drive to find alternative assets to invest in outside of China.   However, their ambitions and spending power could be thwarted by a devaluing currency.   But that in and of itself could drive further speculation and investment.

 

  1. How big of an impact do you think the Chinese New Year and do you plan any of your activities (buying or selling) around it.

 

When I was in the fish business it was normal that the Chinese companies would sell off inventory cheap leading up to Chinese New Year so that they had cash in their account going into the New Year which they believed would lead them to have a prosperous year.   It’s no different in domain names.   Once the Chinese New Year is over it’s business as usual and they often will come back stronger than ever.   However, the currency fluctuation could impact the come back positively or negatively this year.

 

  1. Are you adjusting the portion of your portfolio that is impacted by the Chinese market as the year begins?   Maybe adding or selling to take some profits.

 

We continue to buy any domain that we feel is under valued.   We just acquired 1150.com and SLX.com and many others.

 

  1. What was the best thing you had or added to your portfolio in the last year or two that became worth a lot of money that you really had no idea it would become so valuable? (don’t need to be specific)

 

The best thing we added to our portfolio that increased in value is the two letter .com domains that we bought including EG.com, MJ.com, WI.com and others.   But the ones which we did not expect to go up in value as much as they did are the 3 letter .net domains.

 

  1. What domains were the exact opposite? Things you bought but just didn’t find a market or move like you thought

 

The names which really haven’t moved or have even gone down are the two and three word descriptive .com / .net domains.

 

  1. If a new investor comes in right now and has $5K. Were would you tell them to put that money to get the best Return on Investment 12 months from now.

 

Either in super brandable / mind share expressions (two word .com) or in 3 letter .net / .org domains.

 

  1. What about you or your company gives you an edge in domain investing vs others in the industry?

 

Honestly I think it just comes down to hustle.   Hard work, risk taking and being absolute in your resolve, decision making & your word.  

 

  1. Have you feelings changed about gTLDs in the last year? If so, in what ways?

 

I will admit I’m warming up to new gTLD’s.   At first it was “are they going to replace .com?”.   Now it is totally obvious they will never replace .com, but they still have a place.   Don’t look at a TLD as a whole in these new gTLD’s, look at one off names that just make sense.   If it wouldn’t make sense as a .com then it’s worthless as a new gTLD. 

 

  1. If I told you that you HAD to invest in 2 new TLDs that aren’t XYZ or .Top, which two would you choose.

 

Again, I’m not so hot on specific new TLD’s as I am on individual names from each that are the clear winners, the names that make sense and have value in one way or another.   But if I have to pick 2, then I suppose .CLUB & .WEB.

 

  1. Do you consider dot cc an investment quality TLD yet?

I personally don’t love .cc, but it is quite clear that this is a viable extension that offers liquidity in certain types of .cc names (one which are interesting for the Chinese market) and so I think by definition it is “investment quality” if you know what to invest in.

 

  1. What would be your guess for the next big portfolio to be purchased by a large company

 

Honestly don’t know – but very confident that there will be a tremendous amount of consolidation and acquisitions in 2016.  

 

  1. Are you watching the Indian market, if so how would you buy exposure to that market?

 

I think the Indian market will follow the Western and Chinese market.   Not sure there will be a new category to invest in as much as a fresh capital injection into existing categories and markets.   So far I’ve primarily seen the Indian market invest in short .com domain names like the Chinese have.   However, there is also more emphasis on one word .com brands than there has been from China.

 

  1. What will be your big focus in 2016 and why?

 

We will just keep doing what we’ve been doing.   Like the saying goes, “If it ain’t broke, don’t fix it.”   We will be likely acquiring more domains in 2016 than we have ever acquired in past years.   We are very bullish on the premium domain name market.

 

  1. What kind is your every day driving car?

 

Land Rover Discovery

 

  1. If I had you shoot 10 free throws (after a little warm up) how many would you make? For you football/soccer guys, how many penalty shots would you make on Josh out of 10?

 

I’d probably go 7 for 10, although I haven’t practiced for a while.   I was never much of a dribbler, but I have a nice shot.   Almost as good as my beer pong shot (right Yoni?).

 

 

Oliver Hoger

I started to trade domains since 2007 since then been buying cash liquid domains all the time. As well as end user sales and buying and selling active in the reseller market.  You may not know who he is but if you have bought or sold an LLLL.com or short name you’ve probably worked with him.

 

Where do you see the domain market at the end of 2016? Do you see the domain market moving higher, staying the same, or just stabilizing. Why?

*** End 2016 I see the market higher than now specially LLLL.com with voweles and 7 Numbers .com there will be a market also. 6 Number market will hit new highs.

 

How about the Chinese market specifically. Shorts, numerics, etc

*** LLLL.com LL.com LLL.com 5L 5N 6N 7N 8N will be trading in the Chinese market all domains will get registered as markets develop.

 

How big of an impact do you think the Chinese New Year and do you plan any of your activities (buying or selling) around it.

 

****Buying more domains as prices are a bit lower.

 

Are you adjusting the portion of your portfolio that is impacted by the Chinese market as the year begins?   Maybe adding or selling to take some profits.

 

**** Adding more domains as there is only a limited amount of .com

 

What was the best thing you had or added to your portfolio in the last year or two that became worth a lot of money that you really had no idea it would become so valuable? (don’t need to be specific)

 

****LLLL.com chips and 6 Numbers.com

 

If a new investor comes in right now and has $5K. Were would you tell them to put that money to get the best Return on Investment 12 months from now.

 

***Yes I always advice people then they ask.

 

Have you feelings changed about gTLDs in the last year? If so, in what ways?

 

***I don’t like the new Gtlds at all not buying any.

 

Do you consider dot cc an investment quality TLD yet?

 

*** Seems a Chinese Run on them I would not invest only .com

 

Are you watching the Indian market, if so how would you buy exposure to that market?

 

****I would buy .in and .com short domains

 

What will be your big focus in 2016 and why?

 

**** Buying all short Letter and Number Domains in the .com space.

 

Yoni

Yoni prefers to stay behind the scenes.  As a matter of fact, to get him to answer these questions is calling in a favor.  Simply said, Yoni has a lot of domains and is a major player in our industry.  Many people have probably talked to Yoni at a domain conference and yet don’t know who he is or what he does.  And he prefers it that way.  This may be his first and last interview so enjoy

 

Where do you see the domain market at the end of 2016? Do you see the domain market moving higher, staying the same, or just stabilizing. Why?

Values of domains outside of the Chinese influence are likely to continue staying the same as they have the previous year. Over the past 8 years prices have stagnated and remained approximately the same on the wholesale level (except for keyword names going down in value). I don’t see a reason for this year being any different.

 

  1. How about the Chinese market specifically. Shorts, numerics, etc

 

Besides the Chinese pinyin names (which I anticipate to stagnate or go down further), I would say that the short & number (commodity style) names are more likely going to go up further. I would say pure numeric names have even further potential due to the scarcity of those names vs other possible combinations. In the Chinese market, 2 conditions heavily influencing values at the moment are the further need to store capital outside of China’s reach and further need for alternative investments. In the last couple of months, both of these conditions have intensified further, leading me to believe the most likely scenario is a continuation of the same trend. It is possible the market is due for a correction based on a previous over-anticipation of demand, but I would say that scenario is less likely than more of the same.

 

  1. How big of an impact do you think the Chinese New Year and do you plan any of your activities (buying or selling) around it.

 

Historically, it had a negative impact every year since the beginning of the Chinese interest. I’m planning to continue buying further before the Chinese new year as well as after. However, I do anticipate there to be more bargains right before and during the new year.

 

  1. Are you adjusting the portion of your portfolio that is impacted by the Chinese market as the year begins?   Maybe adding or selling to take some profits.

 

I am slowly adding more short names in asset classes of interest while reducing in ones that I don’t have as much interest in. I’m mainly adding more 5N.coms as I like the mix of quality, low supply, high demand, low price level (for higher ROI potential) & lower risk (as those were all bought out ~5 years ago and before that, the majority were used).

 

 

  1. If a new investor comes in right now and has $5K. Were would you tell them to put that money to get the best Return on Investment 12 months from now.If we are talking about Chinese style commodity names, the higher value names you go for, you are taking on a lower ROI potential in exchange for lower risk. So it mainly depends on how risk averse you are. My preferred balance of risk vs ROI potential lies with 4L.coms (CHIPS) and with 5N.coms. For me those are my preferable asset classes. However, if you are less risk averse, I would recommend going for 6N.com names. I like them due to their scarcity vs velocity of trade. High velocity of trade is useful, because that’s usually a factor that lowers risk (of value) and thus increases prices. I know they were mainly bought out in the last 12 months, but IMO that’s something that is actually holding them at the moment and isn’t going to be a factor a couple years out. Another potential buying opportunity for these is going to be happening in Aug-Sep. If you are willing to take on higher risks, perhaps commodity short names that are currently priced at the $25-50 level would be more interesting as those are the first to double in value in the event of appreciation of all asset classes. The domains on the lower end vary a lot & I would usually recommend sticking with .com as values of other extensions are always tied up to a % of value of their .com counterpart and have that as a limiting factor in appreciation.

 

  1. What about you or your company gives you an edge in domain investing vs others in the industry? (obviously you don’t have to give up secrets but don’t be modest, I could answer this for each of you)Was pretty sure he wasn’t going to answer this one 🙂   I tried.

 

  1. Have you feelings changed about gTLDs in the last year? If so, in what ways?

Yes. I didn’t expect the Chinese to be mildly interested. I previously didn’t have any interest in new gTLDs as I didn’t consider them to be of investment grade. However, I’m now watching those that have Chinese interest.

  1. If I told you that you HAD to invest in 2 new TLDs that aren’t XYZ or .Top, which two would you choose.

Never really thought about it too much as so far there was so much opportunity in the legacy extensions (even beyond .com).

  1. Do you consider dot cc an investment quality TLD yet?

I have considered it to be an investment quality, but only in the short commodity style names.

  1. What would be your guess for the next big portfolio to be purchased by a large companyNo idea. This is something that I’m very curious in seeing for myself.

 

  1. Are you watching the Indian market, if so how would you buy exposure to that market?At the moment I don’t have an interest in the Indian market. But some asset classes such as LLL.in are potentially interesting.

 

  1. What will be your big focus in 2016 and why?My focus for 2016 is going to be maximizing the ROI of my portfolio and watch the Chinese market closely in an attempt to anticipate where things are headed.

 

Josh Eisenhower

And last but not least.  DSAD’s own Josh.  He’s been writing here for a few months doing an incredible job on the Recap each day.  When I met Josh I had no idea what a major player he was in the liquid market.  He buys names buy the thousands trying to capitalize on ROI of the up and coming numerics and shorts.  He has changed my way of thinking  and drives DomainGang crazy by doing everything they say is wrong with the market.  Yet he has had incredible success.  I love watching him buy and sell and have learned a ton from our discussions.  I’ve learned yet one more way to make money in this industry by getting to know Josh. Here are Josh’s answers and opinions

I’ve been domaining for around 3 and half years. I stumbled across domaining by trying to learn different SEO tactics.  I was new to making money online, but knew it could be done. The first thing I ever did online was make some BS Squidoo lenses, if anyone remembers them. They actually made money.  When PBN’s started getting big, the search was on for expired domains with backlink profiles. I bought a bunch of spammed out domains and actually sold some for a couple hundred bucks. I work Full-time in Maryland as a Firefighter/Paramedic.

Here are the questions.  Feel free to skip or change the questions

1.  Where do you see the domain market at the end of 2016?  Do you see the domain market moving higher, staying the same, or just stabilizing.  Why?

I see the overall domain market rising as new investors and new markets come on board. I don’t think westerners fully grasp the amount of Chinese that are getting into the market and are looking for something to invest in. Add India to the mix, increased western interest due to all the media exposure of domains as an investment tool.

2.  How about the Chinese market specifically.  Shorts, numerics, etc

Since October, which I have dubbed Red October, We’ve seen different niches and strings get bought out and rise one after the other. I think the spring and summer will be strong and will follow the progression for pattern and meaning outside of short. Everyone’s concerned about 5 L chips selling out, no matter what their composition. I think that eventually Pattern 6L AAABBB, ABABAB anything like that will be better than random 5L chips, because of the pattern. I think things like AABB-Vowel will increase in value. We all know the Chinese don’t hate vowels and at 5L the pattern of AABB will overcome non pattern with an ending, beginning or middle vowel.

Also I think 5L names that are CVCVC or VCVCV type combinations will increase in popularity. Looking to the CVCV com’s we see the highest overall universal 4L category. The 5 L’s will eventually catch up to the same thinking. 5 letters that are pronounceable will be just as popular or more popular than 5L chips. I think the same concept will carry over to 4L nets, .CC and XYZ. Maybe they won’t be as high as chips, but the value will increase.

I think that CCCC.com’s will become liquid in all patterns, or most. Looking at CCC.com we now have crazy high prices for anything regarless of pattern or meaning. 4C is still very short, the Chinese don’t mind mixing numbers and letters and there are great patterns available and combinations with meaning. 4c.coms can achieve the fundamentals of Short, pattern, meaning very easily.

3.  How big of an impact do you think the Chinese New Year and do you plan any of your activities (buying or selling) around it.

I haven’t planned anything specific around it but I will next year. There’s been so much opportunity leading up to the new year that I really didn’t stop to think about it. I definitely think Chinese New year affects prices especially with auctions. There’s not an auction platform of any kind in the world, for any product, that isn’t affected by turnout. If people don’t show up because they’re doing other things, prices won’t rise as high. This is simple economics, there are less buyers for more product, not to mention that I’m sure the people that do come aren’t all operating off of unlimited budgets.

The final auction price doesn’t mean that was the highest price the buyer was willing to go. I gave an example of this the other day with a LLNN.com. The only one that made it over $100 for the day (off of Shane’s list) was the one that I bid on and drove over $100. I didn’t participate in the other auctions because I was doing things, my goal wasn’t to drive the price up on that particular domain. The buyer that did get the domain was prepared to go higher and did. If I had not showed up to the auction he would have gotten the name for less than $60. Does that mean that I drove the market price of LLNN.com’s up a few degrees? Maybe, artificially in the short term for those only looking at auction results. The problem is we don’t have anything else publically available to go off of. Real market values are set by what people are actually willing to pay for a name in static venues or by the offers they are willing to make or accept.

4.  Are you adjusting the portion of your portfolio that is impacted by the Chinese market as the year begins?   Maybe adding or selling to take some profits.

I don’t think so really. I’m trying to capitalize on profit margins, while watching the very speculative markets for opportunity and holding a portion in reserve for the long term.

I do think that lots of money can be made by liquidating the “safer” options, which is relative, and gambling on a niche that is untapped. I’m not talking about super crazy stuff, rather taking the data that we have, looking at something that a few months ago sold out and now has liquid value and seeing what the next logical step is. If an investor would have sold all of their 4L chips at 2k and reinvested in the riskier stuff, they could’ve turned a 600% profit on a dozen different strings and bought all of their chips back with a decent amount of cash in the bank.  It seems crazy and risky, but the opportunity is there.

Timing is crucial in any of these things. Getting in early you’re taking the greatest risk for the greatest potential reward.  

5.   What was the best thing you had or added to your portfolio in the last year or two that became worth a lot of money that you really had no idea it would become so
valuable?

4L anything 2 years ago 5n in the same time frame, and  6n, and pattern 7n in September and 3 or 4  two letter .VC’s.

6.  What domains were the exact opposite?  Things you bought but just didn’t find a market or move like you thought

I don’t really know? Everything seems to have move up, LLLL.org’s are the slowest, but I actually bought most of them as CVCV looking to end users as an affordable alternative to the com’s or nets. At the current Wholesale prices, creating 10X or more retail prices,  smaller businesses will be looking for lower priced short domains in TLD’s that are established and have global acceptance.

7.  If a new investor comes in right now and has $5K.  Were would you tell them to put that money to get the best Return on Investment 12 months from now.

Depends on the amount of perceived “risk” they want to take. Higher risk I would say CCCC.com’s like LLLN.com patterns, starting with ABA AAB ABB letter patterns. There are a bunch available. A little safer bet I’d tell them 6n’s cheap pattern 7n’s. For advice with moderate risk, I would tell them something like, 40% 6n’s, 40% good 1-2 word.com’s and 20% in any speculative string with good research and understanding behind any of these buys.

8.  What about you or your company gives you an edge in domain investing vs others in the industry?

There isn’t a one step solution to domaining that works for everyone. Failure, trial and error, will lead to something that works. Find what works and go with it, but always be open and looking for new opportunites. Stay as close to the information as you can. You don’t want to get $200 offer emails  for 4L.com’s, think it’s a great deal and sell them.  That’s not really an edge more of a philosophy that can lead to an edge.  

9.   Have you feelings changed about gTLDs in the last year?  If so, in what ways?

I think to some degree. I do like the good span the dot names that make sense. I hate the premium prices, but I understand them. So If the TLD is a keyword of any kind I think that it can work. The problem is that it severely limits the extension, but then that can be a good thing too.  I think the hard working general use TLD’s will do well in the long run.

10.  If I told you that you HAD to invest in 2 new TLDs that aren’t XYZ or .Top, which two would you choose.

This is hard to choose if I just look at keyword span the dot extensions, I think most could have some really great domains. If we’re going off of exposure and Chinese acceptance I would go with .club and .win.

11.  Do you consider dot cc an investment quality TLD yet?

Yes.

12.  What would be your guess for the next big portfolio to be purchased by a large company

No idea

13.   Are you watching the Indian market, if so how would you buy exposure to that market?

I need to learn more about it, but I am interested.

14.  What will be your big focus in 2016 and why?

I’d like to successfully make outbound sales, which means that I should probably start some kind of outbound outreach.

15. What kind is your every day driving car?

Depends on the weather. I drive my 98 E300 Diesel with the  340,000 miles on it or a Tundra.

16.  If I had you shoot 10 free throws (after a little warm up) how many would you make?  For you football/soccer guys, how many penalty shots would you make on

Josh out of 10?

I could score 10 out of 10 goals on that Portly Elf looking goalie.

 

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Outsmarting the Dumb, Outworking the Smart

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8 comments

  1. Mike

    Thanks for these interesting interviews. Shane, I see you are asking opinion about Indian domain market and .in extension. Good point. This market has been forgotten these last years. But India will cross 400 millions internet users in 2016, and will clearly become a hot market/extension.

  2. Mark

    Good to hear Andrew is warming up to gTLD’s.

    He makes a great point, the ones that intuitively “make sense” are worth the investment (like the company that bought Phoenix.Pizza, which now ranks #1 for that search).

  3. john Harrison

    Thanks for putting the interviews together Shane and for the interviewees for taking time out of their days to share their knowledge and insights. Very valuable stuff all round and I look forward to putting it to good use in 2016. 🙂

  4. Stuart Sperling

    Awesome series, Shane.
    Waaaaay appreciated, as always!
    Was aiming for my 1st NamesCon this year, but it’ll be ’17 instead. Can’t do ft’s for shite, though I’d join Shane for a run, or drag people out to Nellis to watch the F22s up close.
    Quick shout-out to Josh, as a ’96PassatTDI-daily-driver, myself, plus ’99Jeep.
    Rock on!

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