Yesterday, though, that strategy was tested. I received an offer to buy a speculative domain that I’ve been holding for less than a year. The initial offer would have given me nearly a 100X profit (and would have paid the renewal fees on my portfolio for a long time).

I have to admit, it was a tough decision despite my commitment to the buy and hold strategy. I’ve set up my domaining business as a pure sideline - I pay for all of it with ‘extra’ money and don’t need it to generate any cash. But the temptation to realize a 100X profit was incredibly strong. Only a crazy person would walk away from that, right?

Wrong. I ultimately decided that only a crazy person would flip this domain at this time.

How did I make the decision? This was the hard part - I hadn’t received an offer like this before, so I had no frame of reference or rules to go by. I had no idea how to assign a value to the domain and, therefore, had no meaningful way to analyze the offer (other than “hey, that looks like a bunch of money”).

I thought about it for a bit, and ultimately scratched the following questions on a notepad:

(more…)