So investors are considering numeric domains, what now?

Markets are crumbling, investors are fleeing. A bunch of individual investors begin investigating other asset classes. And a few read about numeric domaining (yeah!).

So how do we convert them? How do we convince Joe Investor who just closed out his mutual fund portfolio on Wednesday and has $350,000 in cash coming to him soon that numeric domains are a safe investment that can bring a good ROI, or return on investment?

Even though sophisticated investors (of all types) likely acknowledge that domaining is a 'long-term play,' the problem is that the numeric domain market is illiquid. There's not an adequate marketplace of buyers for most numeric domain types, and so that presents lots of concerns. (NN.com's and NNN.com's are probably the only exceptions.) If there was a more liquid marketplace, then outside investors could (1) better appraise our numeric domain holdings for purposes of making an offer, (2) see that there are some serious profits being made already and (3) know that they won't be stuck in 1, 2 or 10 years holding an asset they can't get rid of.

Until Bear Stearns kicked the bucket and the stock market started tanking, investing in stocks made sense on all three accounts: the market price of just about any stock was well-defined, there was a history of long-term profitable returns for most diversified stock portfolio types, and shares have been usually very liquid (you can sell most stocks in seconds or minutes, and the spreads were small).

NOW, all that's changed. Stocks are plummeting because no one knows companies' exposures to real-estate derivatives products that aren't liquid, the profit-potential of stock-market investing is in serious question, and people are worried that if a company goes under their shares will be worthless.

Numeric domainers may, in the end, have to solve liquidity problems themselves before attracting investors. And increasing trading may be the answer. If numeric domainers increase the volume of transactions then that might attract outsiders if enough trading brings sufficient liquidity, more clearly defined domain values and a track record of steady profitmaking.