Smart Money, Dumb Money, New gTLDs, Worthless Domain Names

In Wall Street parlance there's the "smart money" and the "dumb money." Dumb money falls for all the investing fads, sells at the wrong time, or is forced to liquidate at a loss. Adding insult to injury, the dumb money usually pays ridiculous fees to boot. Smart money doesn't do any of that.

How does this play out in domain name investing?

Dumb money: Follows the domaining blogs that tout every new gTLD launch, buying into the new gTLDs that come on the market, often at premium prices, with no long-term plan for development or sale.

Smart money: Follows domain name sales reports and trends (including broader trends in technology and the world), reads and does his/her own research and due diligence, selectively accruing a portfolio of domain names [e.g., short .COM domain names] that can be developed into profitable businesses or held for resale, for a profit, to another end-user.

Here's an excerpt from what a reputable, experienced domain name broker recently wrote: "... new gtlds are like the "raw land" of the domain industry: while there are properties that can appreciate in value in a very short time... the vast majority of them will remain worthless. Why is that? Well this is simply because there are not enough end users looking to brand under under a new gtld, and there are even less looking to pay a significant premium for it... " (emphasis added)

Caveat Emptor!

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