The debate on the future of 4L .COMs continues

One of the hottest topics in the domain name world so far this year has been the decline in sales prices for 4L .COMs compared to the spike in Q4 2015. The average price of a 4L .COM (Chinese Premium) has declined from a high of just over $2,000 in December of 2015 down to around $1,300 now.

Chinese-Premium-Sales-History

(Source – LLLLSales.com)

Last week a bit of controversy around 4L .COMs broke out on Michael Gilmore’s blog. Michael then responded to the negative comment with a blog post which I think is great to see. It can be easy to try to hide criticism but facing it head-on and responding to it is, in my mind, a clear example of how to take the high road in the situation.

“I published an article about ChiP (Chinese Premium) domains yesterday and received a really interesting comment from a reader that I would like to unpack. For a start I would like to thank them for the effort they took in writing the comment as it’s clear they are really passionate about domains.” (Whizzbangsblog)

The comment Michael is referring to is from a blog reader who didn’t agree with Michael on where the market is going, i.e. hold onto your CHIPs vs. selling them.

“Your advice to sell is terrible advice. And then you offer to help CHIP owners liquidate. Four-letter .com prices are positioned to move up substantially in the coming years and you recommend getting out now. You obviously needed a better translator on your China trip. SELLING CHIPS NOW AT LIQUIDATION PRICES IS TERRIBLE ADVICE. PLEASE DON’T HEED.”

Michael shared his perspective on his blog and I think he shares some great insight into what’s going on with 4L .COMs and the Chinese market. Of course these are only opinions, none of us really know what is going to happen. For myself 4L .COMs represent less than 5% of my portfolio so I feel comfortable sticking with them for the long haul. If 25% of my portfolio was CHIPs, I might look at things differently.

I do agree with Michael that at the end of the day it’s all about your risk profile and what you can do to grow your money the most effectively. It’s no secret that the market dynamics are changing rapidly in China, the truth is none of us know where this is all going to land five years from now.

What do you think? Are you holding onto your 4L .COMs or is it time to liquidate and re-invest? Comment and let your voice be heard!

{ 4 comments… add one }

  • Joe May 14, 2016, 4:44 pm

    I in my opinion I think everything that arrived from China is pure truth, is very versatile country change for them is not a problem, but you never know when they decide to change, the new long called attention some are powers of own Chinese state that through third parties do the Topic Index, like buying domains 4l.com not change much that before without being as now a little more free.

    I know this for a businessman to live many years in Hong Kong and have study together in Spain I travel to Taiwan by issues wetsuits diving cheap copy from Japan, these last say Taiwan as Chinese before and after each with your subject knowing its history between the two countries.

    At a conference for years in Spain to hear an economist professor at Esade Business School if arriving in China freedom will be a danger in any market, and the truth we have now before us, today’s markets are on the rise and fast fall into a deep well and the changes will be noted but they themselves know is pure wealth market policy and party politics.

    Reply
  • R P May 14, 2016, 5:22 pm

    4L’s need probably 3L’s to move up before they can move higher. Just like silver needs gold to move higher

    There was a clear market top in the 4L market. Who knows how long the bear market will last. I don’t see how there can another bull market in 4L without 3L first leading the way.

    4Ls made a big move up to catch to the 3L scarcity value. Just as silver often does with gold. The gold/silver ratio is currently about 75-1, historically over the last 2,000 years it is around 16-1. It’s been as high as 100-1 and as low as 8-1.

    I think we’ll see a move up in 3L before 4L moves up materially, 4L has still made up a huge gap in “scarcity value” if you look prices from the context of 1-2 years.

    Only .com. Other tlds could go down regardless of what .com does. And given the renewal rates of true premium gTLDs, .com is most certainly the best long term investment.

    Reply
  • Aaron Strong May 14, 2016, 6:01 pm

    There remains a huge trade deficit with China that is unsustainable. The gap will be closed at some point. Devaluation of currency by China’s central bank will not be enough to save severe economic recession in China….Sell your ChiPs while there is still some meat on the bone…(Just an opinion, so don’t blow a gasket over it folks)

    Reply
  • Mark May 18, 2016, 11:06 am

    Could it be that just the “junk” (IMO) LLLL.com names have gone down in pricing, bringing the average down with it? I saw trash names (i.e. JQXP.com, PGQA.com, etc) going for too high of prices. No end user will want to buy a name like that, despite “good and bad” Chinese letters. But brandable, phonetic or otherwise meaningful LLLL.com type of names (i.e. foxy.com, tubo.com, etc) should retain value.

    It’s just like those idiots who are buying NNNNNNN.com names — come on! There has to be an end user appeal.

    Reply

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