What a day! Yesterday morning it felt like a big day was coming due to the buzz on social media and thankfully the market did not disappoint.
I imagine for the new traders seeing their first big game day, the questions will be around why some players seem to rise and not others, often regardless of who actually won.
It’s totally illogical, right? But markets do not always work on logic alone.
Particularly now, when there are lots of new traders, the transfer window is open, the hype is flying, and many players under 21 who can kick a ball seem to just keep going up and up.
People like to follow the trend in these cases. It’s comforting to buy a player who is rising and has been rising, the reassurance that other people are buying too is nice. But do not believe anyone who tells you something will just keep going up and up forever especially when, as is the case with many, there is no rationale basis for that value.
Some people say that if you “ignore” this trend you are deluded. You have to “follow” the market. No, you don’t. Trends should be accounted for, but it’s far better to take a position and then let the market come to you rather than chase others due to “fear of missing out”.
If you are prepared to look, there are bigger profits in percentage terms to be had outside of the obvious hype players.
The money I do not have in the latest £8+ hype player is not sat there doing nothing. I am not “missing out”. It is somewhere else in a player I judge likely to become one of the next hype players in the coming weeks and months.
A player like Joao Felix from my New Trader Challenge, for example, has nearly doubled my money by coming from £2 towards £4. A player at £7-8 would have to hit £15-16 to do the same, and that is much harder to achieve and carries a lot more risk.
And if I ever wanted to sell Felix, the spread and commission would be tiny compared to the eye watering losses from instant selling an expensive player.
My point is this: the trend should not be ignored, but that doesn’t mean you have to follow other people in to the exact player that is currently being widely bought.
A monster rise for Dembele today and this is fairly unusual.
“On the day” buying of players is common, but I can’t recall seeing it quite to this extent.
Generally speaking, you do not want to be buying a player on the day of a game. You aren’t placing a punt at the bookies, here.
If you want a player for a game, look ahead for next week and pick them out at least a week in advance.
Then, you can be profiting from the on the day rise and have a cushion to play with if you do want to hold the player to see how it turns out. Many however just sell before the game and take the easy profit before a ball is kicked.
As for Dembele himself, he is looking good and things seem to be going his way at the moment. He’s got a lot to do to justify the price but in a sea of high priced youngsters, I think he is one of the better ones.
Jack Clarke, Aaron Wan-Bissaka
These are both players I have featured this week in the rising column, highlighting the big risk of a substantial drop in their value.
You can also include Alphonso Davies here although his drop came yesterday.
Everyone is aware of the young player bubble. People don’t like to talk about it but I think most rationale people know it.
The cycle works like this. Some young players start rising, they transfer a bit of their star dust onto others as people seek the next big thing. But slowly, people will realise that not all of them are gold.
This trend will end when a few young players over the course of 2019 unsurprisingly reveal themselves as “not as good as Messi” and the price will decline. Traders at that point look around and wonder who else was over valued.
Young players will always retain something of a premium, because they deserve to. Not all of them will be Messi, but some of them have a chance to be and until proven otherwise, this is worth something.
Players like Rashford and Sancho have done nothing in dividend terms to justify the price, but at least they are playing eligible football for big teams and giving people reasons to believe. And a handful of the youngsters will indeed make it big.
But many of them won’t, and the B listers like Clarke and Davies who may not be playing eligible football for a long time are particularly vulnerable to these dips.
These rumours are starting to become a weekly occurrence, with Chelsea the latest to be linked. Klopp has apparently ruled out a return which makes sense to me – it sends a bad message the the squad in my view. “Sure, go and try Barcelona and if it doesn’t work we’ll have you back”. Not for me.
Chelsea or Manchester United isn’t out of the question though and it looks like more of a Summer thing.
As a holder I am content just to stick with this but buying now I’d say take a look around March before too many people hop on him for the summer transfer wagon.
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