You can always tell when many traders in the market don’t have a clear feeling about what to do.
If people want to bet money but they aren’t sure where to put it, the lack of confidence can lead to the “follow the crowd” instinct. It’s comforting to buy players that have risen recently. Reassuring if social media accounts are loudly telling each other that their player is good (often with very mixed evidence – it’s easy to sell a few headline stats and ignore some fatal flaws). You can feel in good company that way.
For a week or two it can seem to work. You might have been losing before and you might be on a more even keel now, or even rising.
But it always leads to the same place. A portfolio full of over priced, under performing players that are more likely than not to be the next ones to get dumped.
A key mistake that I see a lot of particularly recently is a tendency to believe that if you do not follow the players that are rising you are ignoring the trend. Surely you want to be following others because that is where the money is going? This is a popular theory. It’s also utter nonsense mainly pushed by people who want others to buy their players.
Trends and players are not the same thing. You can make the youth trend or whatever trend work for you perfectly without following the player that has been rising fast for days or weeks. If you are piling into high priced players too late, the only people that is working for is the people who got their first.
You might make some money following in. But it will rarely be as much as you could have made. And just as likely, when you are following in late, you are the one who gets dumped on once people take profits.
Yes you should follow the trends. No, that does not mean you have to follow the crowd.
Through good research and a bit of consideration about what the trends are, you make them work best for you by getting well out ahead of the pack and positioning where other people are likely to want to be in a few weeks or months time.
It can be uncomfortable and takes a bit of bravery. Only a handful of people will be there yet and you won’t get immediate reassurance from the market. And that is the whole point.
But if you get your selections right, you will be there holding the door open waiting for the crowd to follow in, rather than at the back of the queue trying to pick up the scraps.
You need to be very confident in your analysis to do this, mind. If you don’t have good information on players and trends you may have no choice but to follow the market rather than get out in front of it.
Rice has had a crazy rise this month and whilst he has plenty of the hype factors in his favour, he’s very thin on substance for the money.
Now confirmed for England, the first call up is a matter of time and there is an International Break on the horizon this month. And he will have no shortage of big name suitors in the Summer.
But what happens when he gets there? He doesn’t have the goal threat for more than 1 goal in 8/10 matches on average. His baselines should be solid. So we are looking at 2-3 wins per season realistically. That might be decent value at £2-3.
And as a relatively defensive player, he is never going to be a consistent media buzz player.
If you were really interested in performance friendly attacking England midfield talent you’d be going for Barkley or Alli.
So, clearly the majority of holders are there for the short term hype factors. It’s a race to mug each other off.
The question for holders is how long you try to ride this train for before it inevitably crashes.
A rough season for Isco who has been mainly watching from the sidelines.
But make no mistake, he is a quality player and if he did come to the EPL as is looking more likely (Manchester City, Manchester United and Liverpool all linked) interest would be very, very high. He pushes towards £8-9 with ease in my view.
He has the potential to be a very effective FI player but we need him used in a central advanced role to get the best from him. I would also want to avoid Manchester City because the midfield is a selection headache. Liverpool could be similar unless any of their main front 3 move on. Manchester United look the best option to me.
Still, I think any EPL transfer will see excitement based on reputation alone.
At £5 he is fairly expensive but if you look at the rumours and believe them, it’s a decent bet for a reasonable profit.
The reason for the drop is obvious but I have included this more to consider the point about transfer rumours than Brooks himself.
We have a lot of players at the moment whose value is based not primarily on their current ability but on their potential once moving to a bigger club. That potential, at least for the next year or two, can be swept away at the stroke of a pen.
We should know who those players are in our portfolio and be prepared to take action if we need to. If the reasons you have bought the player no longer exist, it may be time to get out of there.
As for Brooks. Lots of talent and I have been very impressed with him. At the price, he won’t be giving big returns for the rest of the season and he really needed to enter the Summer with a transfer rumour to hold value. But, he is showing quality off and on the Index and I like him for the future.
As everyone will know I think this price is pure lunancy. However, his performances have been good recently and despite low scores, he has probably been unlucky not to score higher due to game winning goals not falling his way.
He is also getting the hoped for big transfer links for the Summer, so holders can at least breath a sigh of relief that the hype factors supporting this price are progressing well and not fading.
Some people really enjoy holding this sort of player and that’s all well and good. But for me, I’ll never be tying up such huge amounts of cash in a player for so long when the % rewards elsewhere are so much higher.
Surely this is Bale’s time to go. The rumours are too strong and all of the personal circumstances and club circumstances seem to fit an exit.
An EPL move would be huge for media alone, and possibly performance. He is much better than he has been able to show at Real this season.
The stumbling block may be his Galactico wages. Will he drop them? A move to another foreign league would not have quite the same impact.