Speculative Activities

   Before the Great Depression whacked America, there was a big boom in all speculative activities. People were betting on stocks, commodities, horses, and more. Read Reminiscences of a Stock Operator by Edwin Lefebvre for a taste of what was going on back in the Roaring 20s and 30s before it all ended in tears.

   More recently, there was a lot of speculation in real estate before the big crash in housing. You know what I'm seeing a lot of speculation in nowadays?

   Websites.

   With sites like Flippa, DigitalPoint, and Sitepoint providing marketplaces for domain names, web services, and entire websites, anyone can get into the game of flipping websites and speculating in them. While the activity isn't at an alarming level yet, I do foresee it ramping higher in the coming years as speculators try their hand at buying a site for $100 and then flipping it for $1000 after doing some cosmetic surgery and updates.

   The company I work for has been acquiring various websites over the past year and we've been forced to pay higher prices because of amateur bidders coming in with competing offers. How do we know they're amateurs? Because they ask basic questions like "Can I become like Ebay with this penny auction site?" and "What does PHP and MYSQL stand for?" The sellers love it because they're able to lead amateurs with grandiose visions of how much money they'll earn with Adsense when anyone who's been in the game knows it's not easy because there's a lot of competition out there. We're going to watch how prices go as the economy recovers but we think prices can only go up for well-designed sites with potential as amateurs and speculators start spending. There'll be a crest and then the inevitable crash. Watch for it.