Traders holding the most expensive footballers are losing a lot of money in the last weeks.

Not everyone knows what to make of it. Some say it is stupid people selling in a panic. Some say this is an opportunity and to “buy the dip!”. Some seem to believe that you can just ignore it because prices will just keep rising forever. 

In these last weeks, I have not lost any money at all. In fact, it is the opposite. It’s been a very good month for me.

Not losing money is as important to your annual ROI as making it. In fact, it is more important because losing money causes emotional stress (tilt, in poker terms) and can lead you into bad decisions.

The best thing you can do to avoid losing money is not to hang onto over valued players too long. And, don’t buy into the myths peddled on social media by pumpers and charlatans.

Every player will not rise forever. And you do not need to follow others into high price players to “match the trend”. 

There is better money available by being ahead of the market rather than following the crowds.

Overvalued players are always a ticking time bomb in your portfolio. They might keep rising as long as there is a reason to believe the hype will continue, but without a strong immediate reason to hold, many people get bored and move on. And that can cause a big drop as we have seen. 

Throughout the last year, any worries could be soothed with “ah but share split and dividend increase.”

Now though, that is gone, and realistically, talk of another dividend increase is unlikely to even begin until late 2019, and I suspect more like early 2020.

Therefore, unlike the last year, there is no longer a reason for people to hold players so far beyond their rationale value. Right now, traders really want a strong reason to hold the players in the Summer and nobody is immune from that.

So, are these price drops an opportunity? Can we now pick up players at value? Yes and no.

The buy the dip cliché is so often misused. The intended wisdom here  is to buy when an asset becomes undervalued. It is not meant to encourage you to buy something that has fallen but is still overpriced.

I can’t say for certain whether the drops at the top end will continue or not. Some even have a small bounce back at time of writing. Maybe Monday brings a favourable announcement that pumps them up again. Maybe one of them gets a huge transfer rumour and rockets.

But I do know that there is no need to take that risk at all. Even if those players do increase in value again, they are simply not the most profitable trades anymore.

You generally don’t find the best returns once a player is already in the risers column. And you don’t find them once they are all over your social media timeline either.

The best profits, at less risk, are much further down the price list away from the hype and the social media bluster. 

It just takes good research and a sense of where the market is going to find them.

Risers

David Neres

Another goal for Neres and the more I see of him the more I like him. 

A fantastic finish last night from a difficult chance especially given the pressure of the occasion. Well worth a watch for anyone who missed it.

He is also showing more and more performance suitability. In his last 3 games he has had consistently good involvement in the game, with a decent passing accuracy and decent defensive contributions too. 

All of this makes him more than just a goalscorer, which he clearly is. 

He could not be hitting form at a better time to attract top club interest. Liverpool are the big rumour, but so are PSG, Dortmund and even the less favourable Everton.

Liverpool are the headline option although unless any of their existing front 3 move on, it’s hard to see him as something other than a back up player at least early next season.

It would still see significant market attention if it happened though.

I wonder whether, for the season as a whole, we might be better off seeing him starting at Dortmund.

But, as long as he goes to any suitable club, he looks a real performance talent.

Scott McTominay

McTominay got plenty of plaudits for a good display last night. A good performance in reality, but was it good for FI purposes?

The answer has to be “not really” unfortunately. Whilst his involvement is good, as a deeper player, he does not have the goal threat to be a consistent performance challenger.

At this rate, we might expect him to get 1 goal in 10 or similar. It’s just not quite enough and it will be hard to predict when that goal might come.

For the price though, it’s not a terrible trade and a patient holder might be pleased to see him pop up one day with a big score. 

However, you have to hope that the 1 goal in 10 also comes on a day where United win and it happens to be the match winner. Those odds are too long for my taste.

Fallers

Phil Foden

Foden has taken a bit of a beating in the last couple of days. 

When young talents are rising, you get “the next” effect. People look around and think “ok, player X is rising, who is similar I can buy?”. So, as the Sancho’s rise, so do other promising England talents like Foden.

Unfortunately, the opposite is also true. When players of the same ilk are dropping, traders also look at dropping players and think “yikes, who is next?”.

So in many ways player prices of similar players are tied together. Sancho and a few others who have dipped lately are actually having a little bounce back up at time of writing so maybe others will too.

But Foden himself has really not done much wrong. His on the pitch displays have been excellent in both reality and FI terms pretty much whenever he is given the chance.

Is there a space for him for a more regular start next season? It still looks tough. But we have to remember he is just 18 and this is entirely normal.

Hot Gossip

Gareth Bale

We are always on blockbuster Summer transfer watch at this time of year. Bale is near the top of that list and the latest reporting is that Real have told Bale’s agent it is time to move on.

I don’t put a lot of store in the day to day gossip. But this all fits. Bale’s struggles with Zidane. The way the crowd at Real treat Bale. His really poor recent performances. The fact he has just never fitted into the dressing room. And the contract with 3 years to run is not totally unbreakable.

So, if I have to bet, I would be content to put money down on a move being pushed for. 

The difficulty is – where would he go?

He’s still a top class talent and has a lot of potential to do well on FI in the right circumstances. And in the EPL, his price should rocket as he will be a media magnet too.

Manchester United would be the dream move but it’s not easy, his wages are huge. For that reason a Spurs return also looks difficult. 

If he moved outside of the EPL, that dents the value a fair bit as the media potential drops off. 

Tricky to call at the moment but it does look good for some gossip/speculation in the short term at the very least, and has a chance of blowing up into a big and on-going story.

 

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