Wealthy Investors Flee to Tangibles Like Art: Are Domain Names Next?
Picasso's Angel Fernandez de Soto (courtesy of Reuters)
In a recent Wall Street Journal describing how the ultra premium art market is benefiting from the recent downturn in the economy, Godfrey Barker points out how there seems to be a “flight to tangibles” like art by many wealthy investors. Are ultra premium domain names next?
It wouldn’t be too far of a stretch to say that many wealthy investors could flood the premium domain name market looking for a safe haven that has many of the same characteristics as a premium piece of art.
What do you think?
Will traditional investors become more web savvy and invest in premium domain names as another alternative investment class?
Is premium art a sound comparison to a premium domain name? What are the similarities? What are the differences?
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Good article, but 2 points:
1. Investors are fleeing to TANGIBLES not, intangibles.
Tangibles are objects that are capable of being touched, and have a real existence like real estate, art or a piano.
2. Domains might not seem as tangible to these investors. They can’t actually touch a domain and hold it (in their opinions).
However, the similarities between rarity of art and domains are there… and art is fairly illiquid — it takes the right buyer at the right time to get your money back
(as opposed to stocks which are highly liquid — just sell on the open market and the cash is on the way).
Again, good article… good find…
It would be nice if investors jumped into our arena…
I think it’s a matter of time.
We could ALSO be proactive on this — make an effort ourselves to reach them.
Aron
Very true on the difference between tangibles and intangibles even though domains would still fall into the alternative investment class right along with art. Also, I would agree with you on the education issue – any ideas that you have for educating investors on the potential in domain name investing?
(Also, check out an article I wrote about domain name investing basics for a popular personal finance blog a while back as there are some interesting comments and feedback: http://www.financialsamurai.com/2009/12/02/domain-name-investing-101-online-real-estate-as-an-asset-class/ )
I am very surprised there has not been more investment liquidity for domains with the most vanity value – common-first-name.com, words that bring very strong emotions like hell.com, pretty much anything that if you tell people you own it, they would think it is amazingly cool.
In Silicon Valley it has got to be cooler to have your first-name.com on your business cards than $ half-a-million ferrari that is basically impractical toy that will lose 3/4 of value in several years. First-name.com is certainly a lot more rare and harder to buy.
Great point – there is a lot of talk about personal branding all over the various financial magazines and mainstream newspapers (heightened by the recent rise in unemployment and the need for one to differentiate themselves in the crowded market place) and having a business card that lists your web address as Johnny.com and email as Johnny@Johnny.com or even JohnnySmith.com/Johnny@JohnnySmith.com would be tremendous from a personal branding standpoint.
It’s funny, I was thinking about the similarities a few weeks ago before I wrote my article on investing in domain names.
But in light of the WSJ article it is a great question.
http://webvalueinvestor.com/value-investing/is-premium-art-a-sound-comparison-to-premium-domain-names/
Interesting point that you made in your article about how the current DNS system could potentially even cease to exist 25 years from now while theoretically (well preserved) art will be around forever. Something interesting to think about. One addition thing to think about that would be a plus in the favor of domains rather than a negative is that if you set aside non standard TLD’s then there is much more of an inherent limit on the number of domain names that there can possibly be (because of the inherent limits of the number of characters in a language) while there is no such inherent limit for art (and thus the propensity for art to more closely mimic extreme bubbles like the tulip bubble and others – would you agree?)