1. Counter-party risk: The SOPA legislation is actually not all that different from what happened at MF Global. SOPA adds counter-party risk. A registrar can now seize a domain and be exonerated for doing so if that action is cloaked under the banner of SOPA compliance. There is a lot of room for interpretation. It is one thing to seize a domain that a client failed to renew despite multiple notifications. It is quite another to put an operating business out of business because of policy compliance. All of a sudden who your registrar is matters a whole lot more.

2. Liquidity: The liquidity topic that Owen raises is an important one. It is frankly unsolved. As domain investors, most owners are “arbitraging time”, i.e. they have to have the means to sustain the carrying costs until a logical end-client comes along to take the domain to the next level. This was easy to do in the heady days of parking but became harder to do in recent years when some level of development was often needed for turning a domain into a cashflowing property.

At the end of the day, the economics of buy-and-hold for development-grade domains remains pretty attractive. I would not suggest to anyone to go all-in on domains but for sure it is mighty attractive as a % of any balanced portfolio.

I like your house rental reference. I know somebody who has lots of foreclosure rental domain names

BTW

To be fair about the home owner chances you did leave out the parts about the renters stiffing him and the potential 6% tax being considered on home sales.

For my money good domains still have most upside with limited downside and to paraphrase the line from CaddyShack if the buyer doesn’t have the money they aren’t getting the name.

As a domain name investor you are spared the eviction process BS

SA

The time-proven trusted 10% dividend that drove acquisitions and gave investors confidence that dividends on a million dollar portfolio would fund their retirement, are getting just 3% and their portfolio is now probably 70K.

That’s an expectation of 100K a year and a reality of $20K.

They need a solution but the3dscanner.com for 50K isn’t going to make it.

I think that language you highlighted above could just as well apply to parked domains. You have no control, no transparency or stability.

And that’s the roadblock to pitching domains as investment grade. Example: a guy bought a house down the street on a short sale for 99K. The owners foreclosed owing over 400K. The guy can put up a sign and rent the house within days because so many foreclosed people are seeking rentals. He is guaranteed a 10% net annual return. You can’t promise that from a domain. In a perfect world you could by dishwashers.net for $20K and there would be an agency that would offer it to GE and others for rental like real property investing. I always believed it would be an ideal product expansion and new revenue stream for Google, After all they have reps calling on companies and selling million dollar ad words placements. Imagine they had an inventory of domains to offer as well. It would be a slam dunk.

The other barrier to investment domains is inability to liquidate if you need to. You end up selling for pennies on your dollar. Investors in this space must be financially secure and able to hold the asset until the market matures and demand is created.

Let’s say an elderly couple decide to go into assisted living. They sell their condo for $600K which is a $400K taxable gain unless they reinvest it in another home. If domains qualified as real property and buy investing in the domain they could avoid the tax and not have to buy a home they don’t need an worry about renting it- then you could argue that a $400K domain investment has already made them $200K in tax savings. There also could be trust strategies where they could pass the domain to children and spare them an inheritance tax. Those are the kinds of elevator pitches that would connect with investors who would never comprehend what a domain was and be terrified of the costs and liabilities of running it as a business.

http://www.businessinsider.com/home-depot-snow-blower-customer-service-2011-12

Classic. Senior Management may be all about the bottom line, but it looks like a staff member still had a high Give-a-shit Factor.

As always another very insightful post. I can vouch for one thing and that is EPIK do everything possible for the customer. Quick to respond and quick to resolve issue.

Happy Holidays to everyone at EPIK.

** RWM ** Thanks Vishal. Happy Holidays to you and yours in the UK.

I haven’t done any business with Epik, I hope 2012 will be a blessing for something useful and profitable for all of us. I did identify you much earlier as a true genius in the domain/business world. I look forward to some endeavors, or suggestions. A happy holidays to everyone at Epik, 2011!!

** RWM ** Thanks for the kind words. It is said that there is a fine line between “genius” and “maniac”. History judges one’s work to be “genius” when it worked. So, stay tuned. As for doing business with Epik, if you create an account at epik.com, send an email to trial@epik.com, and we’ll put $7.84 in your account so you can do a transfer-in to try Epik.

Happy Holidays to everyone at Epik. Looking forward to the next year!

** RWM ** Thanks Roma. Same to you. 2012 will be a breakout year!

** RWM ** Thanks Jal.