Collapse, Meltdown, what’s next?

Morning Folks!!


Starting early last year I started writing about what I saw coming. I had
already started to prepare. I started seeing the unraveling in the spring of
2007. I said nothing at that point. I quietly started to prepare. I am a numbers
guy. I saw numbers that were impossible to work. I also enjoy real estate as a
hobby. The first tip was when I saw prices rise from $300/sq. ft to $1200/sq. ft
and as high as $2000. In some cities that is the going rate. Not in South
Florida. The first BIG clue was when the numbers went from $300 to $1200 without
stopping at $500, $700, $900, $1100. That showed me that this was unsustainable.
Something had to give. A collapse was in the making.

Then add to that I was seeing people making $75k/year buying homes for
$350k-$500k. It's mathematically impossible. Everyone would have to be pretty
damn optimistic to swallow that one. I am a numbers guy. To me it was just a
matter of time. The outcome had already been determined. Now we were just filling in the chapters.

What I did not know at that point was the entire system was corrupt and
broken. I knew the ending without even the most important pierces to come. But
it was August 2007 that I began to prepare. I never shared my concerns until
last summer. Even then folks I knew were skeptical that it could get this bad
and it will undoubtedly get worse.

You say 'It's not that bad' and you are right. The storm has yet to hit.
The fallout has yet to hit. The result of 5 million jobs lost so far has yet to
hit. The rents that won't be coming in from Circuit City and Linen and Things
and dozens of others is yet to hit. So much of this is yet to hit. Much of the
pain could be avoided but good decisions must be made and I see no evidence of
that. The confidence level is lower than at any point in my lifetime. There is
no confidence whatsoever and the stock market is about numbers and the numbers
never lie, people do. You should have seen the look at some of the faces when
the market was at 14000 and my out of pocket line was '14000 on the way to
7500.' They never liked when I would say that. But that was what I saw based on
the numbers and I still underestimated what was to come.

So as I saw this years out I began to prepare and am still preparing. It
won't be easy to stay ahead of this monster. You will have to be agile and you
will have to be quick and you will have to do a lot of things you may not
normally do. That really brings me to the subject of this post. I am embracing
this meltdown because I have been preparing and I have a strategy to come out of
it in a stronger way than when I came into it. I am a recession fan!! I LOVE
recessions! I love meltdowns! I love what we are going through. What I hate is
the interference that is going to make it much worse and much longer.

One thing will determine whether I succeed or fail. It comes to that every
time......TIMING! So I feel pretty good about how to ride this wave out. But I
will respect that the energy of this collapse and meltdown is bigger and
stronger than any of us. Never has so much been lost so quickly. Never ever. On
the other hand, coming out of this....never will so much been made so quickly.
Point is there is opportunity coming at every corner and if you know how to spot
opportunity, if you know how to seize opportunity, if you know how to recognize
opportunity, if you know how to time and play opportunity, then great times are
ahead. .
Patience will be key. The next few weeks until tax time may be brutal.
Then I believe we will see a big pop followed by the worst part of this storm.

The damage being done every day can not be minimized. It is long term and
may get completely out of control. If it gets out of control then it is time for
'Plan B.' What is 'Plan B?' It's the plan just before 'Plan C.'
Cash and income producing domains are the two safest things I can think of having. Then gold, but gold has too many risks for me....what a great time to be in the domain business. What a great time to fortify your portfolio. It may be the last chance.

Have a GREAT day!

Rick Schwartz




12 thoughts on “Collapse, Meltdown, what’s next?

  1. Scott Alliy

    Rick,
    I am not totally up on the Toys.com auction or acquisition details. Was the timing of this event the result of a planned asset liquidation or was it a proactive effort on the part of Toys-R-us to acquire the domain name?
    I guess my real question is what is it going to take for businesses that need and can benefit from good domain names to come to the realization that owning and leveraging one or more keyword or key phrase domain names relating to their business is a good business investment?
    I understand that individuals and business owners are scared but at the same time once you survive a catastrophe and once you realize that you are still alive you then need to assess the situation and then develop a plan for sustenance.
    I find it hard to believe that a sustenance plan for any business won’t involve increasing their Internet property holdings or at the very least their involvement in and dependence on the Internet as a source of business income.

    Reply
  2. Kevin

    Everyone should buy as many domains as they can afford this year.
    There are many top domainers that have been putting every dollar into continuous acquisitions over the past 10 years that now want to also build a little cash cushion and are willing to part with one or two of their gem properties for a very reasonable amount.
    So this is the best time ever to grab gem properties from the collections of the biggest players that usually never sell. Most of the big owners don’t market these gems publicly so contact the brokers who represent them and find out about the killer domains that are available.

    Reply
  3. EM @ KING.NET

    @Rick
    That is very true, cash and income producing domains are the safest things to have at this time of crisis.
    And if you don’t have income producing domains (just like Rick, Frank, etc), develop your domain NOW to prepare your plan B not C. This is your backup, make it happen. Only you can do something about it and not parking companies.
    IMHO
    EM @ KING.NET

    Reply
  4. Anunt

    If you knew bad things were heading this way in 2007, then you could have made millions by shorting stocks…and if you still think we are going down from where we are today…then go ahead and short stocks and make your millions!
    On the other hand, if you think things are going to get better from here…start buying stocks and make your millions.
    If you know which way the market is headed…make a move…dont just sit there…make your millions!!!
    Me on the other hand…not going to do a damn thing…just going to ride the wave up or down…doesnt matter to me one bit!!!

    Reply
  5. bob

    Thanks for your article. It was well written as usual with a lot of good advice.
    As domaining is an avocation for me, and since I’m not able to spend a lot of time studying it, I may be missing something, but I sense that in the end user market a perception that domainers are wildcatters, and don’t deserve to make real money,”as all they do is register names…”, and that this jealousy prevents them from acquiring some great domains that would likely dramatically increase their company’s revenue. Or maybe they’re afraid the boss will say”why come up with this?” Do others in this field feel the same? Curious. Bob

    Reply
  6. David J Castello

    We signed more advertising deals for the CCIN network in Feb 2009 than we did in Feb 2008. Domain names are definitely the new bullion and no better place to be in this powershift.

    Reply
  7. fb

    @anunt
    I saw the carnage coming in the summer of 2007 and expired on puts on stocks like fannie mae and cryptologic…worthless..then look what happened. the”plunge protection team” behind the scenes kept a lot of garbage stocks afloat for too long..including lehman.
    Then I made my money back shorting leveraged reits in October…but it has been difficult with all the bailouts manipulating some stocks higher,”no shorting rule” for a while…wtf? rigged game…so it has been tricky..
    So I am another person who saw a crash coming who couldn’t just short so easily without risk…I mean sheesh..the pumperz on cnbc kept this con game going for so long..was dangerous to short…what if you started shorting in 2006? you’d be right and bankrupt

    Reply
  8. David

    Rick, I also knew it was coming when I saw many folks literally camped-out overnight in front of the new home sales office for the chance to buy at the builders inflated prices and 300 folks on a waiting list to buy, all in 2005.
    Plus, many homes selling for more than asking price with multiple offers within a few days on the MLS.
    Now home prices in my geo location are now down a staggering 50% (or even more) vs their 05/06 market tops.
    David
    http://davidgreen.com/

    Reply
  9. Muska

    I saw the carnage coming in the summer of 2007 and expired on puts on stocks like fannie mae and cryptologic.

    Reply

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