A lot of people make the mistake of thinking that as a domainer or let’s say as an investor in general, all you have to do is “be right” or in other words, figure out what will happen. Unfortunately for them, they forgot to take one very important thing into consideration: timing.
Believe it or not, most investors are actually right but they end up losing money because their timing is off.
For example, maybe you bought a future trend domain because you’re convinced the industry will take off but didn’t have the patience/liquidity it takes to wait it out. As a result, you ended up selling the domain at a loss and a few years down the road, guess what? The industry in question might have very well taken off but you no longer own the domain.
In other words, you were right (the industry in question ended up doing well) but lost money because your timing was off.
The same principle is valid when it comes to stocks, real estate and so on.
John Maynard Keynes said that “the market can stay irrational longer than you can stay solvent” and he was right in this specific case, regardless of whether or not you agree with his general philosophy as an economist.
That’s precisely why a lot of people lose money.
They’re “right” because what they think will happen ends up ultimately happening but due to timing-related reasons (they buy too soon, sell too early or both), they lose money.
This principle applies to absolutely everything you can invest in.
Domains, stocks, real estate and so on.
Never make the mistake of thinking that “being right” is all it takes, you couldn’t be more wrong. Pun intended… kind of 🙂
October 27th, 2013 at 2:26 pm
Agree, timing in domaining is very important too.
October 27th, 2013 at 3:13 pm
Great post, and 100% on the money. I can attest to this principle applying to me in areas ranging from Real Estate, to Options, to Domains.
But as a former options (floor) trader I can say that the best thing about domain names is that they’re a (relatively) inexpensive LEAP option, particularly if you’re a future-tech domain investor, like I am. And that’s why, as other have said, quality domain names are really the best long-term investment you can make: The keys, though are “quality” and “long-term” — because if you do run out of capital it’s far more painful when something ‘hits’ than if you’d never made the investment in the first place.
So do a ton of research before you invest, and be prepared for the long haul. Many of the future-tech names I’ve invested in are in areas that are only now starting to gain real traction. But it’s very satifying to see some of these predictions come true.
October 27th, 2013 at 5:24 pm
Not only is timing important, but as my buddy ShoeMoney says, ‘positioning is everything’