Diamonds and Domains, You Need to Know One to Understand the Other. Size Does Matter!

Morning Folks!!

I don't like to hurt people's feelings but I must say I am seeing things that just sadden me.

To understand INVESTMENT QUALITY DOMAINS you need to draw a parallel with diamonds.

A 1 ct. Diamond today of average quality is $5000

A 1 ct. Diamond that is 'D' and 'Flawless' can easily run $40,000 and higher

So a pretty big spread and you ain't seen nothin yet. Please follow as I go to the next parallel.

Now we are looking fr a 10 ct. 'D' and 'Flawless'. Is it 10x the price of the 1 ct. of the same quality? Making it $400,000? No it is not. Is it $800,000? Nope. Is it $1.5MM? Well now we are in the ballpark. So we could be talking not 10X the price but 40X the price. The value.

Now we can work the other way too. Like the majority of domainers. 1/2 carat, 1/4 carat, 1/10 carat. But that is small ball and that is even if you are dealing in diamonds to begin with. Odds are you have quartz. Or worse yet, old broken coke bottles.

Maybe just another Gem. That can be but the chances keeping getting further away.

You can make money focusing on any sized diamond. But the rewards just might not add up and the amount of work will. For every 100 domains you own with no value, you will be paying $800/year or more and increasing. Over 10 years that is $8000. So if you have 1000 domains that is $80,000 over 10 years and if you have 10,000 domains you have a bill of $800,000 over 10 years.

Dump the garbage and go after the diamonds. Size does matter. People need funds and they are looking for creative ways to make that happen. There are bargains out there. Those that get rewarded in 5 years are the ones taking a risk today. Is there any real risk in buying a category defining name? The game is not to invest in liabilities but to invest in appreciating assets. Sorry, but out of the thousands, only hundreds are getting it and it is rare to see anyone come in the industry and at least pick meaningful domain names.

8000 crappy domains is a pile of crap at the end with a big bill attached. I have crappy names and this year I have combed through my list and deleted the first round. Next year I will do it again. More information means new decisions and new areas to allocate funds.

1/10 carat diamonds are not meaningful. But ones as small as 1 Carat can be. Smaller than 1/10? Maybe dust in the wind. Your time, your effort, your money.

Have a GREAT Day!

Rick Schwartz

13 thoughts on “Diamonds and Domains, You Need to Know One to Understand the Other. Size Does Matter!

  1. Diamond Dealer

    Great post, Rick. Maybe you should also warn your readers who are considering gtlds that such extensions will be considered the worthless cubic zirconia of the world. Fake leak machines which will be worthless and offer no resale value whatsoever.

  2. TaxElitism

    The rarer 10 carat diamond is exponentially more valuable than a one-carat . . . What does that mean? Maybe single-word, meaningful dot coms have parallel exponential value because of rarity . . .
    Domains are a girl’s best friend . . .

  3. Anunt

    All category killer domains are gone and are not for sale.
    So what should I do now…i and many others have the funds, but no great investment opportunities left in domains.
    The domain game is over…only nickels and dimes opportunities left…and if u have funds, u are not going to be interested in making pocket change.

  4. Puckerhuddle

    Diamonds are a good analogy. Al lot can be learned from De Beers when it comes to dealing with rare and valuable items. it is well known that De Beers stores a huge quantity of diamonds and does so to regulate the market and maintain liquidity and value. Just as with domain names there is a cost associated with safely storing diamonds and I am quite sure that they only hold diamonds that are of investment grade and not industrial grade. There is a market for the industrial grade diamonds and many people are employed in the business but if you are holding and paying storage for an item make sure that it has the proper value to justify the carrying costs.

  5. Jay

    For diamonds, price goes up with size (comparing same quality). For domains, price goes down with size/length… Who wants very small diamonds? Who want very long domain names?

  6. Jay

    Many are for sale, but not for lowballers. So if your budget is not big enough, you might be right – end of game for you…

  7. Faux Fred

    I agree with Diamond Dealer (#1) and see absolutely no value WHATSOEVER in anything that does not end in .COM
    This is getting more and more obvious as time progresses.
    To me, the new gtlds would all be classified as faux jewlery. May look like the real deal and may even work like the real deal, but definitely not worthy of sustaining a potentially valuable business. Part of this is due to the huge leak factor, but also, the fact that they are longer than .com, have no international recognition, have no customer credibility and will actually cost more(!) to register and renew annually. Just don’t see the business plan there.

  8. Duane Higgins

    Nice post Rick. Those panning for gold (domains) can still hit it big. The gold rush is still there and the most industrious and imaginative (with some luck) can still find the gems.


    Very true Rick. A few things come to mind:
    -Not everyone understands Diamond quality and it takes an expert to recognize real quality and the same goes for domains. Nothing sadder in either industry seeing a dealer with junk and thinking it is good quality.
    -Size does matter but remember, it isn’t just the wand, it is also the magician.
    – Any good gem or diamond dealer or domainer knows the value of buying in parcels or portfolios. The price for the whole lot is usually less than the sum of the price of the individual parts and you get a better deal buying in bulk.
    – When you buy a parcel of gems or portfolio of domains, the same rules apply. Divide them into three groups.
    Group One is the top cream, put them away and forget you own them until the right”special” buyer arrives on the scene. Group Two is the OK names or gemstones. Mark them up and make your operating profit on this group. The Third Group is the junk or the dogs (sorry Freddie). A good gem dealer and a good domainer will dump this group for cost or even take a loss because the cost of carry isn’t worth it.
    – When you have a great diamond or great gemstone it is like a great domain. It is in a class by itself and hold out for your price because there isn’t another one like it and they aren’t making anymore.
    – Not for sale except for at my price:, and and the World’s Largest Peridot. 310.40 Carats.
    Chris Hartnett

  10. Show us the money....

    Agree with this sentiment. I think anybody holding domains should really only be holding .com’s (generally) and should have a insight into how they could add value without requiring a sale, E.g. Development.
    Good domains are hard to come by now at a decent price. I used to think a decent 5 letter com word for under 10k was value for money, but try finding them now. Generally it would be 50k.
    Development though brings its own issues. Esp if you need to hold stock and need somewhere to store it. Personally I think all those entrepreneurially enough to understand domains are most likely to have what it takes to succeed in ecommerce.

  11. TommyT

    Rick bought smartglasses for around 3k. No names left huh.
    So what to you have to say about that. I mean you can finance that for 5 years for 60 bucks a month. Dahhhhhhhhhhhhhhhhh


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