It’s worth taking a moment to stop and appreciate these daily massive rises on the FOOTIE (the slightly murky marker of how much money is in the Football Index total).
I hardly mention them anymore because it is so routine. But a +394 rise is huge in historic terms and most times in the last year I’d have been highlighting it and trying to explain why. But it’s so routine now!
It reflects the soaring confidence that has sustained since January, and must be a result of all the (really quite excellent) marketing FI are doing. Having had a good time and mostly seen profits, it’s no great leap to assume that many new traders stuck around and will be putting in more money as they grow in confidence.
There will come a day though that it stops and it is wise to be both mentally prepared for this and have your portfolio prepared for it. It is all fun and games chasing the hype players but trends can change quickly and if the music stops you do not want to be left with players that don’t have much to support the value.
We did see some quite heavy drops in some players yesterday. I think in large part this is probably due to people wanting to free up cash to chase into rapidly rising hype players. And tiring of last weeks hype players.
The thing about this sort of trader is that they have a very short attention span. So whilst some are true believers in the hype player, many are just going along for the ride and don’t really know why they own the player apart from the fact they were rising at the time.
Every so often I look at my portfolio and make sure I remember why I bought the player in the first place. Then I check if that reason is still true. I’d recommend this as a good method for making sure your portfolio is built to withstand the market having a natural dip as it will at some point. If you are going to hold strong when things get tougher, you need reasons to be confident in your holds.
Risers
Ousmane Dembele
A quicker than expected injury recovery has led to a 96p rise. This is getting a bit silly.
There is a fundamental logical flaw in these hype trades that the market will eventually have to punish.
Dembele is good. And I think he will get better. Lately, he has had more pitch time and he is looking solid.
That leads people into buying. But the reality is that at £8 he was already at a very high price. The on pitch improvement was needed to even justify getting close to £8. But some traders take it as a buy signal that his improvement means he is now worth £10+.
Like Vinicius, he is playing himself into contention to be “the wonderkid that makes it”. It’s great. But you are still buying a player that is a long way from being an elite dividend returner (and still with a high chance of failure) for really not far off the price of an established elite dividend returner.
Even if Dembele comes good, that success is assumed and already factored into the price. And if he fails… ouch.
As a silver lining though, I will reinforce that he is at least looking good on the pitch so it is not a total waste. But I don’t think it’s a particularly good value trade either.
Luka Jovic
He hasn’t really done anything in particular to get a rise today.
Rather, he seems to belong to a group of players that just have sky high market confidence because of the near certainty of a big move in the Summer. You could include other site favourites like Kai Havertz, Joao Felix and Nicolas Pepe in that group too.
They are all very strong and probably represent some of the best youth prospects on the Index by far. But, at some point you do have to question the value of continuing to plow in at these prices. At least they do have some substance behind the hype, unlike many.
Now, on the pitch there is something interesting happening as members will know already from my scouting because he is currently being played in an AMC role rather than as a striker. It’s too early to draw conclusions but if this continues it will be interesting to see if he can pull this off. If so, it could improve his performance prospects.
Fallers
Mohamed Salah
Salah has taken a dive, probably because people want to free up some cash to chase risers, and also because some doubts are starting to set in about Liverpool’s prospects after a shaky couple of games.
On the pitch, it doesn’t change much. Salah is a solid but not brilliant performance player and that looks set to stay that way.
It’s media we look to really (aside from the big European nights where relatively low performance scores may clinch it). I think Salah’s success is therefore pegged to Liverpool’s ability to challenge strongly for both the EPL and Champion’s League.
It’s possible that nerves get the better of them. But really, if they just do what they do, they should recover soon with 3 juicy home games coming up in the EPL. The Champions League vs Bayern is going to be rough as it will have a major impact on the price.
Starting at home in the first leg, if Liverpool can put themselves in a dominant position Salah’s price will soar. But if they don’t…
Hot Gossip
Lorenzo Insigne
Liverpool are kicking off their Summer business early with an apparent major bid for Insigne. This is credible and has been rumoured for a long time.
He’s a high baseline high threat forward and his underlying stats are immense. The only thing missing is actually finding the net. He went on a 5 match streak without a goal recently, but ended that in the last match vs Sampdoria. Earlier in the season, he was unlucky that his goals came in matches Napoli drew, or he did not get the match winner.
I think he will find form this season and he has a winnable Europa league tie up next. And if the Liverpool move happens his price will fly.
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FIT
