Domaining and Warren Buffet

Legendary investor and business mogul Warren Buffet has a famous quote, which I’ve always thought applies directly to the Domaining world.

Never invest in a business you can’t understand.” (Warren Buffet)

Of course this applies across so many businesses but since my blog is focused on domain investing, I thought I’d share how I think it is applicable to this space.

Too often investors buy domains in categories that they know nothing about, and even markets they’ve never sold in before. This applies to both buying and selling domains. I’m not saying don’t experiment, but I am saying that investing in things you know and understand will just about always produce better results.

Buying a meaningful one-word .COM is a pretty safe bet since you should understand very well that meaningful one-word .COMs are very valuable. However, buying a one-word domain in a TLD you don’t know very well or can’t find much sales history in is a risk. Take risks, but constantly learn and make sure you focus your time and energy on investments and markets that you understand.

Want to break into a new market? Great, learn about it first, talk to other investors who are successful doing what you want to do, learn everything you can. Then, once you understand it and are confident it’s a good investment, make it happen.

I think the #1 question I’ve had over the years from new Domainers is, “What do I buy when I’m just starting out?” Buy what you know and understand. If you’re a lawyer, build a legal info site or blog around your expertise. If you are an auto mechanic, build an awesome site about fixing your car or some great names in the space that you know other businesses will want to buy. Start there, learn, and grow your business over time.

Wise words from Warren Buffet and hopefully there’s a nugget or two in here for new domain investors still figuring-out how to get started in the space.

{ 1 comment… add one }

  • DH December 18, 2012, 4:24 pm

    Apparently Buffett is not as shrewd in the domain land as other business areas. If he were, he’d snatch up

    BuffettRule (dot com)

    which my company owns. He has given the president permission to use this term and he doesnt own the name which is his namesake.

    Reply

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