Frank Schilling – Apr 30, 2010 1:38 PM PDT
I'm surprised that with 714 views no-one has commented here. My chops are a bit rusty since my hiatus from blogging, but I thank-you for sending me the link to your post Mark and am delighted to revisit your predictions and the state of domain values today.
Let me begin by stating that domain “investment” is indeed alive, well, profitable and real. You can label somebody who invests in domain names a speculator; I have no problem with that label. Speculators are capitalists and I make no apologies for being a capitalist. But it would be silly to assume that those who buy domain names as their profession don’t apply some investment criteria to their cash outlay; and it's arrogant to assume that domain names are not worthy as an investment class. As with any investment there is naked-speculation at the top (where big dollar sales sometimes defy logic) and at the bottom (where registrants register available names today only to try to pump and flip them for a few hundred dollars tomorrow). But I can assure you that there is a solid middle section of the domain industry where registrants make well thought out analysis about the potential upside, cash-flow and present-value of a domain name. If no speculators who buy domain names can be considered investors, then neither should short-sellers who buy “calls” to cover their short position, or "long" stock investors who buy a stock that fails to pay dividends. Investing and speculation are separated-twins at heart Mark. Brothers from a different Mother. The difference is merely the calculation of risk and reward. A conservative domain “investment“ takes into account that there is “some traffic and revenue” and models that into price-discovery. There are investment worthy assets in every class (even domain names), and no investment, even in Benjamin Graham’s day, was guaranteed.
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