In my opinion, this topic isn’t receiving the attention it deserves despite the fact that a lot of domainers frequently make the mistake of exuberantly and recklessly bidding on trophy domains.
What are trophy domains?
As the name suggests, they are amazing domains which make you feel proud and which make fellow domainers feel jealous whenever you mention them.
Something along the lines of:
You: “Guess what, I just bought Domain.com!”
Fellow domainer: “Wow, I wish I had such a domain in my portfolio”
… I’m sure you get the point.
There’s just one problem, how much did you pay for it?
You see, the main issue with “trophy domains” is that a lot of investors would love to own them and as a result, they often end up selling for very high amounts on the domainer to domainer market.
The amounts are sometimes so high that realistically speaking, after you cool down and the initial excitement disappears, it becomes clear that the upside is just not there. Sure, you own an amazing domain and everyone will be impressed but if you didn’t buy it at a price that’s low enough to leave some decent upside potential on the table, it wasn’t a good acquisition from an investment standpoint.
It just wasn’t.
In my opinion, being able to resist the temptation of making ego-fueled purchases is of the utmost importance. If you’re a professional domain investor, you have to act like one.
If in a certain situation you just can’t resist, then at least be honest with yourself and admit that you made an ego-driven purchase. In other words, that you made a purchase rather than an investment, kind of like a child who buys a toy
We’ve all been tempted to do this at one point or another but in my opinion, professional domain investors should resist the temptation, especially if they don’t have a lot of liquidity because after the excitement disappears, you might end up realizing that one purchase can and will ruin your entire business model if you’re not careful.