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Will the US Election Outcome Affect Domain Values?

Posted on 03 November 2016 by Andrei

First and foremost, I don’t want this to be a political post, I’m writing it as an economist who’s analyzing an asset class (domain names). Also, I want to make it clear that I don’t live in the US, so even if I wanted to, I can’t vote.

But let’s be honest, the outcome of the US election doesn’t just affect the United States, it can and will affect the entire world. Therefore, it’s easy to understand why pretty much everyone is concerned about the outcome.

For what it’s worth, as much as I dislike Hillary Clinton as a candidate, I’d still vote for her because the alternative is… well, Trump. So if I were to choose between a corrupt politician (Clinton) and a raging lunatic (Trump), I’d choose the corrupt politician. Just like if I had to choose between a punch in the stomach and a bullet in the head, I’d choose the punch in the stomach. Furthermore, if I were to look at the recent polls and see that Trump has an actual chance at winning, then even if I were a person who doesn’t usually vote, I’d make an exception and vote this time just so that Trump doesn’t win.

Alright, let’s move on to the actual economics.

Will the US election outcome affect domain values?

Well, it depends on who will win.

As mentioned on more than one occasion on DomainingTips, domains are “risk on” assets. Just like stocks, for example. This means that if the market is optimistic and people aren’t worried, they’re more likely to take risks… so they tend to be more open to investing in “risk on” assets. If people become worried, they become risk averse and far more prudent, so they tend to invest in “risk off” assets like “safe” (as in low yield) bonds.

So, what happens to domains after the elections?

Well, if Hillary Clinton wins… probably nothing spectacular. She’s the candidate the market expects to win, so her win is “priced in” and therefore, the market reaction after a Clinton win would be “tame”… maybe it would go a bit up because the market is relieved Trump didn’t win or maybe it would go down a bit in a “buy the rumor, sell the fact” fashion. But again, I’m 99.99999% sure the reaction wouldn’t be spectacular.

If Trump wins on the other hand, I for one expect the market to fall… significantly. A LOT of people will become worried, not just in the US but internationally as well. And when people are worried, they don’t want to risk their money. They stay away from stocks and, you’ve guessed it, they’ll be considerably less thrilled about domains as well.

Furthermore, you need to understand that not all risk assets are created equal. So for example, broadly speaking, domain names and stocks are “risk assets” or in other words, both assets fit in this broad category. But domain names are riskier assets than stocks and as such, should we enter a period of uncertainty, domain values would drop MORE than stock values.

I mean just look at what happened after the previous global financial crisis. Domain values plummeted (as did domain liquidity) and it took longer for them to go back up than with stock prices.

Frankly, in the event of a “risk off” scenario, domain names would be among the first assets to take a hit in my opinion. So as someone who invests in domain names, a potential Trump win should worry you… a lot.

9 Comments For This Post

  1. Ram Says:

    Do a one min economic video on this. You might help persuade voters.

  2. Movecon Says:

    A wise man said: “There’s nothing wrong with having nothing to say… as long as you don’t insist on saying that.”
    You, obviously, have not listened.

    BTW, if the Hillbeast win, you – all small-time lefties will be nuked away from the face of Earth.

  3. Andrei Says:

    @Ram: I’ve published a video about each presidential debate, here’s a link to a playlist which contains all 3 – https://www.youtube.com/playlist?list=PLhICud5IUwVhXNg60DlXIdpEwOHFHWjQG

    @Movecon: umm… wtf are you smoking? I’m not a leftie and I’m not a rightie either. I have my own accomplishments and my own identity; as such, I don’t need to blindly accept an ideology just so I feel that I exist. I vote (or not) on a case by case basis.

    If Party A has a better candidate this election cycle, I vote for that person. If Party B has a better candidate next election cycle, I’ll vote for Party B’s candidate instead.

    Whatever.

  4. Daniel Says:

    @Movecon….. WTF!!! are you series! Sounds like the MoveCON is pushing the ‘DON CON’….

    @Andrei…. thanks again for your great insight!!! Keeping our ‘toes crossed here in the States to Remain Sane!

  5. some facts Says:

    Furthermore the primary against Bernie was totally RIGGED in Hillary’s favor by Debbie Wasserman Schulz as proved by DNC email leaks which forced 4 democrat party leaders to resign during Democrat convention.

    Also even the current DNC chief Donna Brazile was scamming by giving debate questions ahead of debates to Hillary while a CNN contributor.
    CNN kicked her out just recently.

    Hillary C.linton is the most corrupt and dangerous presidential candidate in US history.
    Jill Stein should be the mold of democrats instead of war-hawk Hillary.

    There will be world war three if she is elected because she has absolutely horrible judgement in everything she does and her own staff has complained all the time about her bad judgement in the leaked emails.

  6. some facts Says:

    Are you seriously thinking Clinton is the better one after all of these revelations:

    1.
    The same day 2nd of March 2015 New York Times published news that Clinton had a secret un-authorized email server her campaign manager John Podesta emailed another person in the Clinton inner circle that “We Are Going To Have To Dump All Those Emails” meaning deleting them.

    2. That same month March 2015 Clintons best friend Virginia Governor McAuliffe recruited Washington DC FBI field office chief’s wife to run for a political office and gave her 500k for the campaign from his own SuperPAC and additional 200k in Virgia democrat party funds for mailers.
    The DC FBI field office led by the now corrupted boss McCabe was responsible for choosing the personnel and resources which would be dedicated to investigating Clintons emails.
    Not surprisingly after getting a 500k bribe the original FBI investigation was botched by not getting statements under oath, not seizing any servers or computers but just asking Clinton nicely to pick those emails (that evidence) which she felt comfortable giving to the FBI, immunities for statements were granted like candy and Clintons people were let to destroy their personal laptops instead of searching them.

    3. Hillary Clinton deleted and “bleached” with re-write software bleachbit 33,000 emails after getting a subpoena to turn over all emails to congress.
    Hillary claimed this was just wedding planning emails for chelsea and yoga schedules so they were personal.

    4. Obama buddy Creamer who had visited White House 400+times and Obama himself 40+ times was exposed to be behind planned violence at Trump rallies including the mass violence against trump supporters and police in Chicago which forced Trump to cancel his Chicago rally.
    They had operatives planted at most Trump rallies to provoke hundreds of people per rally until they found one who would punch them when provoked and then other operatives would film it and spread the idea that all trump supporters are violent.
    google democracy partners and project veritas action if you are clueless.

    5.The Weiner computer’s Clinton emails were known to FBI in early October but since McCabe was bought and he had been promoted to 2nd in command at FBI meanwhile he chose to keep this information from FBI director Comey until thursday 27th of October and Comey immediately informed Congress on the 28th of October when he was told.

    6. The weiner emails have already been confirmed to contain new emails and not duplicates of the emails Clinton turned over and these emails are work-related and include government secrets so FBI agents searching them have to have special clearance.
    This means Hillary Clinton lied and Broke the law and she and several of her underlings should be going to jail.
    Comey’s public disclosure to congress forced justice department to give permission to search through these email during last weekend.

    7.US justice department is currently like a soviet justice department if somebody would have tried to investigate communist party in that Bill Clinton tried to secretly meet Lynch a few days before Comey made his initial decision not to refer to prosecution.
    Secret meetings on airport tarmac do not belong into a democracy.
    DOJ has also been stonewalling the emails investigation as well as the foundation investigation and telling furious FBI agents with evidence of Clinton corruption that your evidence means nothing and “stand down” and stop investigating Clinton and you will not be given permission from DOJ to investigate anything.
    Totally corrupt soviet style behavior at DOJ.

    8.
    Clinton Foundation is a mountain of corruption starting with the billions Clintons got to help Haiti and then pilfered and gave haitians nothing but sky-high telephone bills because a Clinton crony was chosen to run Haiti’s cellular network after Clinton told haitian government that this company must get the deal.

    9.
    Clintons have been bought throuh their foundation by Saudi Arabia and Qatar which spread extremist-islam and fund and arm ISIS by giving Clintons about 50 million dollars through foundation and speaking fees to Bill in the millions and birthday checks for 1 million a pop.

    10.
    The Free Syrian Army scandal where USA armed FSA and the arms ended up with ISIS was run when Clinton was secretary of State and those guns Clinton in essence provided have been used to slaughter christians, yasidis and other minorities by sunni-based ISIS

    11. Clinton foundation has been ROBBING AIDS victims by fundraising using fight against AIDS as their achievement but then NOT giving the money to AIDS victims which are being helped by CHAI.
    CHAI actually complained about Clintons actions to them in one leaked email.

    12. Hillary Clinton met mostly Clinton foundation donors while secretary of State (when all meetings she was forced to attend because of being secretary of state have been taken out).

    13. Clinton surrogates attacking Trump are all just awful people themselves.
    Father Khan wants sharia law as shown by his earlier writings and was earning his living helping rich Saudis move to USA through EB-5 investor program where one can buy US green card with 500k investment so of course his business was in danger if Trump became president.
    Also demands for Sharia law can only be made when the amount of muslims is high enough so muslims want USA to import many more muslims so they can demand sharia and get it just like happened in Great Britain where muslims follow their own sharia courts.
    The miss universe Alicia Machado is a baby-mama to mexican drug kingpin and was convicted of driving a getaway car in a murder and threatening to kil a judge in her home country.

    14.
    Green party presidential candidate Jill Stein has stated that Hillary Clinton would be MORE dangerous than Trump.

    15. Hillary clinton is a neocon war-hawk who wanted Iraq war, wanted her own war in Libya and laughed at Gaddafi being killed and now Libya is an ISIS infested basket case with three competing authorities and pushing hundreds of thousands of “refugees” to europe.

    16.
    Hillary Clinton has advocated using nuclear weapons if some country in Middle East (meaning Saudi Arabia or Qatar which have corrupted her) is attacked.
    This would mean Hillary would be prepared to start third world war if Saudi Arabia decided to attack Iran which saudis hate because they hate all shia-muslims and got their asses kicked then Hillary would nuclear bomb Iran causing third world war.

    15. Currently Saudi Arabia is slaughtering yemeni-shias in their attacks on Yemen to prop up a sunni ruler in yemen and these human rights violations which should have led to complete trade ban and sanctions towards Saudi Arabia have not even been talked about in mainstream media.
    Saudis attack using US arms so shias are getting slaughtered in Yemen using US weapns sold to Saudi Arabia.

    etc.

    Please do NOT continue to be completely clueless if you want to retain your authority on economic issues.

    Read some wikileaks and some zerohedge before spouting off complete nonsense.

  7. Andrei Says:

    @some facts: first of all, thanks for taking the time to write such a long and articulate comment.

    I read it once thoroughly and then a few more times selectively.

    The thing is, I tend to agree with everything you’ve said. You’re 100% correct that Clinton is a very, very, very corrupt candidate.

    Awful candidate, no question about that.

    And I also understand that lots of Americans DESPERATELY want real change.

    But Trump… seriously?

    I firmly believe this election cycle represents a HUGE lost opportunity. One of the two parties could have and should have come with a serious non-mainstream nominee. But they didn’t.

    Unfortunately, history sometimes plays bad jokes on us and this is one of them.

    I really feel sorry that those of you from the US have to make such a tough choice.

    You basically have to choose between a non-mainstream candidate who is genuinely batshit crazy (Trump) and between a mainstream candidate who is corrupt to the core (Clinton).

    Awful situation to be in.

    And again, in my opinion, you basically have to choose between a punch in the stomach (Clinton) and a bullet in the head (Trump). There’s no ideal choice here but at least the punch in the stomach won’t kill you.

    And for what it’s worth, I’m an economist who doesn’t blindly pick sides and who doesn’t live in a bubble.

    I read Krugman’s NYT blog, I follow Stiglitz and lots of mainstream economists but at the same time, read non-mainstream websites such as ZeroHedge and Martin Armstrong’s blog as well.

    I really do my best to be unbiased.

    I mean look at my YouTube.com/OneMinuteEconomics channel, pretty much everyone agrees my videos are fair and balanced.

    But the thought of Trump getting elected just gives me goosebumps… I really hate writing posts like this and really dislike Clinton but Trump would be a disastrous choice for the US and the world 🙁

    Do I think the US desperately needs a credible non-mainstream political voice? Yes.

    Should it be Trump? No, no, no, no… for the love of God, no!

  8. Aaron Strong Says:

    What makes you think Trump is a “raging lunatic” and how is a corrupt politician better than that?

  9. Andrei Says:

    @Aaron: good questions.

    To address your first one, here’s what makes me personally think Trump is batshit crazy, a few reasons:

    1) the behavior patterns he’s exhibited well before dabbling in politics

    2) his hatred-filled message

    3) the fact that he dishes it out but can’t take it; in other words, he aggressively attacks others but is very thin skinned when others attack him… not exactly democratic, nor a trait that makes for a balanced leader

    4) he’s a pathological liar but then again, so is Clinton…

    5) he’s a raging lunatic because a lot of his public appearances are a display of… well, rage

    6) he’s completely unpredictable in the worst possible way, I imagine he makes the life of a campaign manager a complete nightmare and his staff celebrates every public appearance of his in which he doesn’t lose control

    … and so on.

    Now as far as your other question is concerned: why a corrupt politician is better than a raging lunatic.

    Well, for one simple reason: at least a corrupt politician is somewhat predictable.

    Look, America is going to get a very bad deal after this election. Both candidates suck.

    BUT

    Out of two candidates that suck, I’d rather take the corrupt politician that displays a more predictable behavior because I will at least be able to prepare for the bs that’s ahead of me.

    With Trump, preparing is multiple orders of magnitude harder.

    Wish I had a more optimistic answer 🙁

 
 
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