Many domainers and investors are wondering how long the LLLL.com “hype” would last. Yes, the ones who clearly are not understanding the “big picture” call it “hype” or “bubble”.

Well, there is certainly some hype over the LLLL.com but let`s analyse if this hype is fair or not.

I have been a financial advisor and have been trading stocks and stock options for many years over international markets from Italy to the Usa and I think I have a bit of experience to recognise “bubbles”, you`ll have just to forgive me if my written is not perfect because I`m not a native English speaker…..so if you see any grammatical error…sorry!

Back about “bubbles” : let`s take for example the one of the 1999-2000 with the .com burst started from the 6th March 2000 (the day the Nasdaq closed at its maximum if I remember well….I have not checked to be honest , I go with my memory since it was a memorable day).

Why those stocks (not all of them) collapsed and some disappeared totally? They simply were not worth what they were promising , no dividends , not increasing revenue and sometimes no revenue at all. So why those stocks were created and offered to the public by IPO ? I tell you in simply words : to get rich quick….not you but the stocks main shareholders and the banks taking care of their IPO.

When the poor general public finally realised that in the share market it`s not that easy, the damage was done and it was too late, only few traders learn the lesson. This was , in very few simple words, the bubble in the stock market 8 years ago.

Now, back to the domain industry and more specifically to the LLLL.com:

Q: Can they make more of them ? A: NO

Q: Are they useless ? A : NO , many companies use 4 letters acronyms as their company name.

Q: Is there any sort of revenue or dividend each year? A: Yes, if you get internet traffic, you may get money out of them.

Q: is this like a MLM of any sort? A: that`s an interesting question. In theory I could say yes, because obviously who started can make more money….like who buy stocks first (Google shares were $84 during its debut, but lately arrived to $700 and still people tell you it`s a good buy) but for some reasons I won`t compare this to a Multi Level Marketing since it is possible that some people who joined the market just 1 month ago can make more money with a good sale that a bad seller did flipping its domains for few dollars 3 months ago. And….do not forget: the increasing demand is genuine and there are still Billions of new potential internet users and thousands and thousands of new endusers that will join us soon. (just this week I read that Chinese are overtaking the Usa as number 1 country with the biggest internet population/internet users and their internet penetration is still extremely low)

Already with the above mentioned points, you can see how the story looks a bit different, despite , in both cases I always would recommend to invest only the money that are willing to lose TOTALLY, any investment has a risk, the bigger the returns usually the bigger are the risks. (do not believe to the fantasy stories some bank clerk tells you to sell you Bonds, they do have some risks too, generally much less then shares but if you ask to the people who bought Argentina Bonds few years ago…you may learn something).

Ok, we have established that LLLL.com are not useless. Let`s talk about numbers now. How can we give them a right price?

I have been actively promoting a sort of price guide since last September on NamePros.com and with fast increasing prices is very hard to keep the guide updated but I`d personally reccoment the good work done by Reece Berg on its site: 4letternoob.com

My personal point of view is that finally the LLLL.com are catching up on the value of LLL.com .

Math teaches us that since there are 26×26x26 = 17,576 LLL.com and there are 26×26x26×26 = 456,976 LLLL.com

Now, considering that even the worst LLL.com is selling for $6,000 , you can easily do the math and come up with about $230 for the worst LLLL.com……BUT….there is another thing to consider that we did not consider so far and it`s called:

LEVERAGE

As I earlier stated , I`m not a native English speaker so, if you don`t know what I`m talking about, you may find its meaning here:

http://en.wikipedia.org/wiki/Leverage_(finance)

Now that you read that page (especially about derivatives leverage, you could easily understand what happens when the worst LLL.com gain 100 % like they did every year in the last years.

Let`s do some math again:

Example:

XVZ.com $6,000 in January 2008 becomes $12,000 in January 2009 : ROI = 100 %

$12,000 / 26 = $460

XVZQ.com $230 in January 2009 (thoric value since they are still not there but they are catching up quickly) becomes $460 in January 2009 : ROI = 100 %

So, as you can see, the ROI would be the same ONCE the LLLL.com catch up totally in line with 1/26 of their similar quality LLL.com

People that are lucky enough to buy them at cheaper prices will get even greater ROI.

We always look at minimum values and so at worst quality, while I think we should analyse the whole picture, especially the AVERAGE sales, so let`s have a look at the last month of reported LLL.com sales (reported on NameBio.com) :

puu.com $9,100 24-01-2008

zmy.com $6,101 24-01-2008

uoo.com $12,845 24-01-2008

ojj.com $8,600 24-01-2008

uul.com $9,100 24-01-2008

lyq.com $7,482 21-01-2008

sxp.com $8,100 16-01-2008

qzq.com $19,110 14-01-2008

eth.com $19,800 09-01-2008

As you can see, the average prices are not $6,000 so automatically the value of average LLLL.com should not be just $230.

In the last 2 weeks of this month, we`re are assisting on a furious hunt for premium LLLL.com with most of them reaching already $300 - $500 , while it`s already proving to be extremely hard to find any LLLL.com under $50. If the trend continues like this first 3 months after the buyout ,it`s reasonable to expect an average price of $1,000 at the end of this year for Premium LLLL.com and $200-$250 for the worst ones, with all the rest being in the middle. On purpose, I excluded on my research the best ones as pronunciable LLLL.com are starting to be seen as best investment in the domain market and deserves an article on their own (just few days ago , TEES.com has been sold on SEDO for $252,500 !!!).

I`ll be compiling my price guide possibly within a week so stay tuned as this market is booming and keeping update is a must to be able to find the best deals around the web!