Call Me Crazy……I See Numerics Going Up From Here…….

Jun 10 2014

Take a look at the prices below. Back in 2012 I was preaching 4 number dot coms and this was a NNNN.com sales result list I posted.  Many people then and even now, don’t understand why a company or person would brand their site using numbers.  Numbers have been the universal language for centuries. Numbers mean a lot to many people from around the world. . Even here in the US, getting that special number on your jersey as a kid, getting vanity license plates,  to trying to get that cool phone number that people could remember (but don’t have to any more), numbers play an important part in our lives. It will never change.

0163.com $4,102
0363.com $1,440
0819.com $1,037
1226.com $3,000
1886.com $9,100
1956.com $3,100
1967.com $2,201
1998.com $9,305
2006.com $6,000
2793.com $1,110
2822.com $3,825
2959.com $2,616
3042.com $735
3065.com $2,488
3462.com $765
3548.com $950
3610.com $3,030
3651.com $2,177
3656.com $2,895
3918.com $1,938
4074.com $855
4096.com $795
4117.com $2,600
4181.com $1,201
4194.com $735
4210.com $810
4223.com $3,477
4384.com $1,034
4509.com $735
4630.com $721
4769.com $780
4832.com $4,200
4936.com $4,000
5609.com $990
5738.com $1,455
5817.com $1,130
6110.com $2,510
6242.com $810
6314.com $750
6514.com $765
6549.com $832
6638.com $4,575
6816.com $3,321
6882.com $2,585
7041.com $660
7214.com $1,185
7247.com $940
7301.com $1,140
7364.com $1,314
7417.com $1,095
7427.com $855
7612.com $1,140
7614.com $765
7833.com $3,600
7881.com $2,250
7897.com $3,711
8172.com $1,155
8243.com $1,005
8252.com $1,900
8524.com $690
8714.com $715
8853.com $2,850
9166.com $7,800
9226.com $1,680
9231.com $1,510
9254.com $735
9725.com $1,710
9825.com $1,260
9952.com $2,850

Wouldn’t you have loved to buy ANY of these numerics at those prices?  Guiseppe Graziano of Domain Holdings wrote a piece today asking “Numeric Domains – Are We in a Bubble?”   I answered in the comments NO, but the comment wasn’t posted so I’ll give you the details here why I completely disagree.  First of all let’s look at the definition of “Economic Bubble”  “a situation in which asset prices appear to be based on implausible or inconsistent views about the future”

In Yoda talk, implausible or inconsistent future it is not.   The biggest buyers of numerics are Chinese.  The Chinese market is billions strong and growing every day.  The economy is relatively speaking in its infancy.  Yes it’s growing at an unsustainable rate but it WILL continue to grow with time.  People will have more money.  Many wealthy Chinese are looking to move their money out of China.  The state has many rules about how and what a Chinese citizen may buy but at this point they are free to buy and sell as many domains as they like.  Domains present an easy way to invest.  The continues rise in value over the last two years certainly makes it even more appealing. I see no reason why this won’t continue.  Some will use the reasoning that NNNN.coms have gotten too expensive for the average person to buy.  Then who moved the price of NNN.coms from $15 K to $60K?   There was enough money to move that segment.

The short numeric dot com market has a limited amount of numbers.  Every day, some of those numbers are taken out of the availability pool and the amount of numerics for sale decreases. So we know supply is decreasing, what about demand.  Guiseppe says this

C. Inconsistent demand from end users.

While it is true that numbers have a universal appeal, how many end users you know are willing to spend more than half a million to brand their business with an anonymous number? It is intuitive that British Airways should use BA.com and Western Union WU.com, but how many businesses do you think are looking to pursue a 64.com priced close to $1m USD?

I think their are plenty of people willing to play a lot of money for NN.coms.  A million?  Maybe, maybe not.  But just because it’s not selling for a million dollars doesn’t mean their is no demand or inconsistent demand.  A NN.com is one of the most prized assets in all of domain investing so there is no need to discount it.  Numbers are only anonymous to Westerners.  To Chinese they have meaning.

In summary, I don’t think this is a bubble.  Yes I think prices start to settle but a bubble implies a burst.  There will be no bursting in my opinion.  So why did I sell all my numerics if I’m so positive on them.  Easy, I got a great return on them and I took my profit.  But I used some of that and bought more. I will sell those also.  I am in this to make money and therefore I must sell to make money.  Do I wish I would have waited?  Yes, but I am a Flipper.  A born trader, I only hold names that I didn’t pay a lot for and need time to sell them for thousands.   If someone offers me $4K for a name I paid $1K for 12 months later, I generally sell.  It’s how I make a living.  But I feel confident enough to seek out another good numeric buy and invest again as I’m doing now.

And to head off the questions I’ll add this.  I’m not a buyer of any NNNNN.coms except for the top 1%. Not saying they won’t go up, just saying that I have trouble figuring out real value based on past sales except for the very best numbers.   I am a buyer of NNN.nets, NNNN.cc, NNNN.nets.   In my mind I feel each of these are worth a certain percentage of the dot com and as the dot com move, these will follow.  I don’t feel any of the other numeric tlds follow this pattern so I am not a buyer.

 

 

 

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Outsmarting the Dumb, Outworking the Smart

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11 comments

  1. M.B.G.

    Guiseppe Graziano of Domain Holdings is a broker, who writes his blog for one reason only. To mislead people to force them to sell, so he can make nice money on commission. What he wrote in his article is huge misleading. He is mixing end-user and wholesale information to get picture he wants. For example I see LL.com end-user valuation in low to mid 7-figures range. All mid 6-figures LL.com sales we have recently seen were domainer-to-domainer sales. Guiseppe is simply wrong. And so his blog with 90% of blocked comments due to conflicts with his target and opinion…

  2. Rich

    Shane, thank you for the post.
    I do agree with you that Chinese have the money and that numeric names are very few.
    Also your post answered a lot of loosen ends that i had in my mind in regards to numeric names.

  3. brand

    Thanks for that post, great advice.
    I had another guy tell me , if i could get a NNN.net or a NNNN.net at a good price, grab it.
    I have let the few .nets that i had go, cause nobody seemed to want .nets, but i never payed that much attention to N.nets
    I wonder if the NNN.info will ever see a value?, cause i have 2 of them…..lol.

  4. Mike

    Thanks for sharing Owen! I love the quote by Eric from Google: For every person online, there are two who are not. By the end of the decade, everyone on Earth will be connected.”

  5. jason

    I see NNNN becoming more popular than LLL in the coming years.. I’m trying to buy all I can

  6. John Barnes

    I think you are spot on Shane in this blog.In too many aspects of domain investing so many people are thinking “American”.The other 93% of the planet don’t think that way.America,UK,etc are fish bowls.I believe there is a lot of money to be made outside our “comfortable zones” The Chinese,Japanese,Germans etc,Like numbers,hyphens and to us,unusual combinations.We have to think different.

  7. Giuseppe

    Hi Shane!

    First of all, thanks a lot for posting this article. I think the only way we can get closer to the “truth” about domain investing is by having dialogue and confronting opinions. Sorry to hear that your comment was not posted on our blog, we actually looked into it and did not find your comment. We would be happy to post it – again, this is the best way to educate our readers.

    For what concerns your comments, I agree 100% with you regarding the need of wealthy Chinese to move their money outside China – I think it is a fair objection. At the same time, I would like to hear your comments regarding the increased number of brokers, the seller’s liquidity and the traceability of the assets.

    What concerns me about the increased price, is that in China there are 2nd and 3rd degree brokers, meaning that they do not have a direct relationship with the owner, but only with a broker or a cobroker, but are still listing the domain at a higher price. How do you think that has affected the price of these assets?

    Eitherway, hope all is well, and if you ever pass by Europe I would be happy to a have a longer chat about this 🙂

    Giuseppe

    PS M.B.G. we actually have as many buyers as sellers. In my opinion, it is not a good long term strategy to push your clients to sell only to realize that the market is going up. My goal is first and foremost to educate my clients because that builds trust.

  8. jdawg

    I just wanted to add that Shane is 100% correct. For years I ignored NNNN and 3 years ago was about to jump in on a bunch of them for cheap…. Recently have jumped back in and guess what, all of those that I were going to buy are now owned by China, and they are asking big bucks. Simple supply and demand 101 here. The buyers are buying and they aren’t selling. NNNN for me are harder to buy at a good price than a LLL these days, and thats the truth. Still looking for more..

  9. Bill

    I certainly missed this going up, but I see people making the same mistakes they have made with IDNs. It’s one thing to talk about how we are in a fishbowl, and that there’s a whole world out there that think differently. However, it’s another thing to actually learn about places outside the fishbowl. Most people assume too much. With Japanese IDNs, people registered some of the most absurd names, basically, English words in Japanese script. Those who registered good names made some sales, but these appeared to be almost entirely to other domainers. Then, they used these sales as evidence that the market was hot. And throughout all, there has never been a significant end-user market for domains in Japan, with none in sight.

    So above, I see the same error. Speculators are buying, and driving the market. I think numeral domains will have a place, but a major correction is coming. Probably around the time that China’s economy hits a wall, which it will. There’s too much speculation, debt and corruption for it to be otherwise. They won’t be the only ones, but the appetite for speculation will dry up fast.

    Ironically, I see Chinese IDNs taking a lot of the air out of number domain balloon.

    The closest thing we have to an international language isn’t numbers, it’s English. Numbers are universal, sure. But they signify different things in different countries. So I don’t see how numbers can be used to bridge languages.

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