discuss Upcomming 5l prediction

[Flipsbay]

Hello guys,

8 Months ago i was some what predicting 5l is the next big thing at that time some said its idiotic to think like that, some said impossible, some said only pronounceable are worth something. Now 2016 answers all those questions. We are looking even a bigger market than the so loved 4L.com domains

Anyway enough with the intro, what i wanted to know from you guys is what you think the future of 5l.com, both chips and pronounceable ones.

I think :

*** Random 5l chips will have 20$ each value
*** Types like ABAAC, ABACA will be at 70$ each
*** Types like AAABC will have 120$-150$
*** High End like AAAAB,ABAAA will worth 2000$

Yes above statements are purely what i think and has nothing to do with absolute truth, and i am also collecting sales data for some what accurate pricing but for now i think that has to wait another 3 months

Lets see what you guys think

Thanks.

 

[wurdd]

I prefer the first mover advantage analogy myself.

 

[namerav]

Same analogy applies to 5L as it applied to 4L few years back.

 

[BrandChimp]

Same analogy applies to 5L as it applied to 4L few years back.

Yeah, but there's far less 4L to be bought than 5L

 

[Lionel Cohen]

Yes, and same thing between 3L and 4L i guess everything i relative to how much the market can absorb...is 3.2M a lot or not at all...

 

[deez007]

I think your prediction is very very likely.... maybe the prices would end up being even a little higher too.

 

[Recons.Com]

PV is based on regular cash flow, and in my experience the cash flow from domaining is not regular.

So to me the problem here is that present value analysis does not apply to domaining particularly well.

No, not true.

PV can be analysed on ANY cash flow, not just regular.

And even if it were, renewal fees ARE regular cash flow and they are negative cash flow that can be valuated.

It is Finance 101. Annuity divided by required (or risk free for almost guaranteed returns) rate of return equals Present Value.

That is how, for example, people can analyze if they should buy the office building or rent it.

 

[hollywood]

No, not true.

PV can be analysed on ANY cash flow, not just regular.

And even if it were, renewal fees ARE regular cash flow and they are negative cash flow that can be valuated.

It is Finance 101. Annuity divided by required (or risk free for almost guaranteed returns) rate of return equals Present Value.

That is how, for example, people can analyze if they should buy the office building or rent it.

I can appreciate the PV calculation, it is very useful as you say. Thanks for bringing it up. But I would respectfully say that just because one can, does not mean one should.

I'm just saying, and the analogy that comes to mind is, that some measuring jobs require a yardstick, and some require a measuring tape. Who had the current chinese LLLL boom foreseen in their "yield" models (and the derived PV calcs) five years ago?

But even if some did nail it with their assumptions, then that begs the question of whose PV model was right? With PV someone always loses, don't they? It's not like game theory, for example, which I happen to think is much more applicable to analyzing domaining payoffs at lower scale e.g. less than say 200 names.

 

[artstar]

ok whos got a headache after reading only 3 pages of posts??

 

[Recons.Com]

I can appreciate the PV calculation, it is very useful as you say. Thanks for bringing it up. But I would respectfully say that just because one can, does not mean one should.

I'm just saying, and the analogy that comes to mind is, that some measuring jobs require a yardstick, and some require a measuring tape. Who had the current chinese LLLL boom foreseen in their "yield" models (and the derived PV calcs) five years ago?

But even if some did nail it with their assumptions, then that begs the question of whose PV model was right? With PV someone always loses, don't they? It's not like game theory, for example, which I happen to think is much more applicable to analyzing domaining payoffs at lower scale e.g. less than say 200 names.

I have an mba in finance from a top US school and I am sorry, but have no clue what you said above.

I am not discussing price fluctuations, sales etc.

This is about comparables and inserting a fixed cost associated with renewing 20 names vs renewing 1 name into consideration. Has nothing to do with the sales. Perhaps, if people would have clue about quantifying those costs, market pricing would have been different.

 

[hollywood]

I have an mba in finance from a top US school and I am sorry, but have no clue what you said above.

I am not discussing price fluctuations, sales etc.

This is about comparables and inserting a fixed cost associated with renewing 20 names vs renewing 1 name into consideration. Has nothing to do with the sales. Perhaps, if people would have clue about quantifying those costs, market pricing would have been different.

What I was trying to say was that you MBA-MS-Excel warriors over-analyze the sh!t out of stuff :D as nicely as I could...but hey I'm just a trash-talking CFA fail who wound up as a buy side fund trader.

But I might be missing valuable context here. Are you investing in 5L like the 4L in your sig, meaning, in quantity? If so then I guess I can understand that domain reg fees are a big line item in your expense sheet and worthy of PV analysis. Or maybe you are keen about different gTLDs and the deep differential in reg fees?

 

[Recons.Com]

Yeah, I am thinking of doing CFA too ) Too busy for now.

I don't do 5L, because the fundamentals are missing per my analysis in this thread. I don't do Chinese prem 4L either, as I'd rather buy 4 or 5 3x3 (at least 3 west prem, at least 3 chinese prem) 4L.coms for that price, which I do. I have now around 170 4L.coms

What people here are doing is taking 4L.com chinese prem and dividing it by 20 to get to value of 5L.com. They assume they should be $100 each ($2000/20=100$), so they rush to buyout.

By bringing in the renewal factor from those 20 names, I am demonstrating that it is wrong method just to divide without adjusting. Adjustment is not important between 2L and 3L, 3L and 4L, because - $200 PV is not a big deal there.

While, -$200 is huge for 5L to ignore. People think they are buying for $2-7 range 5L.com domains, while they are in reality buying options with one year term at that price. If the price is above reg fee in a year, they will sell/extend option, if it is below they will drop. And, typical for options, it is very risky play.

 

[mitok]

You cant calculate any price based on just fundamentals as that don't works that way. You must calculate future expectations and many other factors (potential end users as one of them) in the price. Thats why your price calculation is completely incorrect, sorry.

 

[Lionel Cohen]

Thanks God noone in the start up industry is looking at PV....for obvions reasons!

 

[dbustin]

i think before you see any significant growth in 5L all of the mixed 4L need to be bought out. Especially since a lot of chinese websites are developed on mixed 4Ls compared to 5Ls patterns may be nice with investors but it seems to me atleast, chinese end user potential lies in 4Ls.

 

[Recons.Com]

You cant calculate any price based on just fundamentals as that don't works that way. You must calculate future expectations and many other factors (potential end users as one of them) in the price. Thats why your price calculation is completely incorrect, sorry.

Nothing to be sorry about.

I already mentioned before that future expectations are always reflected in current prices. And if there are still 400K or so of those names available, it means there is no future expectation of $50/name.

But buyout will probably happen. Now that required about $10-12MM to do, as it was mostly done on $1.3 to $7 range promotions. Spread across e.g. 5,000 people, not hard to do, $2000/person average. To bring the market to $50/name level, the secondary market has to shell out about $80MM, assuming 1.6MM (50%) of names will be up for resale. Who is paying for that? These 5,000 or so are not interested, they need about 20 000 idiots shelling out $4000 each on average to hold 80 trashy LLLLL.coms with no end user sales, paying $800 in renewals every year and hoping that next year their trash goes up in value by more than $800 of renewals + $800 of minimum return they'd hope to get.

Now, I am not saying there are not 20,000 idiots that might do it, but it is a hard task to sell especially given that general public does not understand is not interested in domain investments and those interested will soon figure out what is happening.

So, no, 5L.com is not 1/20 of 4L.com by any measure. Unless you have really rosy future expectations. Then, yes, go ahead and indulge yourself.

 

[djum]

For 5L.com price to go to $0 from minus $90, 4L.com chip price has to go to

($0+$200)*20 - $200 = $3800.

For 5L.com price to go to $50, 4L.com chip price has to go to:

($50+$200)*20 - 200 = $4800.

So, if you are engaged in 5L.com buyout you:

- either are expecting that 4L.com price will hit $4800 within few months
- or are knowingly or unknowingly engaged in pump-and-dump scheme. If it works, you'll exit quick with some money made, if it doesn't, you are left holding trash in your portfolio.

There is no third option here.

Yes, there is.

Called non-linear growth, market fluctuation where price is decided by demand, supply and manipulation of both.
That's why LLLL.net price is not 1/20 or 1/10 price of LLLL.com, but 1/8 - 1/7.

I can bet you any money, that after 5L.com buyout complete 4L.com price growth won't be same as 5L.com price growth.
What will it be? Market decide and tell us. Before that all calculations are entertaining, but rather useless.

Regarding 20000 idiots, China has too many people to count and can produce idiots faster than we can count them. Buyout is led by serious people who pump millions into this and they have plans to make money from it. Time will tell who ends up being an idiot here. I'll be surprised if Western domainers hold more than 3% of 5L.com market or 100K names.

 

[Recons.Com]

Don't underestimate Western buyers fooled by "Chinese banks lend $40 per 5L name", "Chinese investor who has 100K names says they will cost $150 by september" etc. There lots of people who don't post here, but read and act. I have seen names in other categories that have been demandless forever scooped up as soon as list of availables was posted on NP...

 

[djum]

Still amount of names owned by non-Chinese will be insignificant, nothing close to LLLL.com and LLLL.net proportions, because most people here have no use for 5L.com initials except for reselling them to Chinese.

If 4 letters you can find or make up some acronyms, 5Ls is sell or bust. That's why a lot of people didn't touch them.

 

[Flipsbay]

I see heavy activity on godaddy after market on 5l in last 3 days.

Thanks.

 

[mitok]

I see heavy activity on godaddy after market on 5l in last 3 days.

Thanks.

Could you please be more detailed? I do watch GoDaddy auctions, and other markets so it is very hard to be focused on everything

 

[imadoer]

My personal opinion on 5l and lot of people are going to dislike this but idc

There's a nice pump and dump coming
They are going to buy out 5L so they can boost the price of the premium junk that they bought earlier and they will sell that junk and a bunch of people will be stuck with a big pile of junk.

 

[21x20]

@Recons.Com ... It can be about sales. Here's something I posted in another thread about something I had posted in another thread. So I think this is the 3rd time I'm sharing it - first in January, then in February, so now too in March. But true enough, it belongs in each of the threads that discuss 5L and "why".


https://www.namepros.com/threads/5l-com-and-7n-com-reg-stats.908770/page-15#post-5332915
"And on the notion of 5L's, here's something from another thread I had posted:

Well look ... From a registration perspective, it's a numbers game.
If you go at it from just a CHIPs view, there's 3.2 million 5L.

If you smartly purchase 5L (ie, buy the right ones) and you pre-plan $100 in renewals... Then selling 1 in 10 of what you buy over an eleven year period (with avg yearly renewal @ $9...) for $1,000... Then you've covered your cost on them all.

That side of the coin also suggests that not all 3.2 million have to be worth something. 1 in 10 says it's a numbers game and only 320,000 need to be worth an average of $1k aftermarket to break even. There's still plenty of upside from those bigger sales (ala $1,450 for 1). It still leaves room in the aftermarket for resellers to post-buy the best of them.

IMHO, crazier things have happened. We can debate back and forth if this is really the best place to put money or not -- but again, to each their own. I surely don't solely own 5L, nor would I suggest anyone do that -- putting all eggs in one basket is a means to failure. But surely there's success to be found in a diversified and logically devised portfolio.

https://www.namepros.com/threads/who-hate-to-invest-on-5l-chips.908600/page-2#post-5231678
​

That being said, I think @dntoolz has a decent concept here for 5L and the market place he's working on. As 4L get to be larger $$ and harder to purchase, 5L.com's will surely start to look much better to smaller companies that don't want some random extension OR a really long drawn out name.

I think from a numbers perspective, N names are far more about "currency" simply because of the more limited quantities and simple divide by 10 kind of math. They just set themselves up for that far better. But L names have a far more universal development appeal. And if the math holds up... If you can break even selling 1 in 10 5L's over an 11 year period... There would seem to be a lot of room for upside."