In the last edition we discussed a mixed couple of days where we were seeing decent sized drops for some players.
Since then, the market has gunned ahead overall again. But if we had any fears about the smaller prices making the market stagnant, I think this week could be starting to kill off that idea.
There are big moves both up and down.
My sense is that people are just waiting for any excuse to spend money. That reflects the sky high overall confidence following the solid dividend increase announcement. Traders want to be in, and they want to be in big to get ready for the coming year.
However, we also have a really difficult time to navigate in the football calendar. It’s my favourite time, actually, because that uncertainty as we end one season and look towards the Summer and then pre-season creates a ton of trend shifts and therefore opportunities.
So, we are not seeing wall to wall risers and some players are taking a hit.
Many traders were in this place already, but many more are starting to realise they need to change tack and be moving towards the trends that are in play, chiefly I think, the preparation for Summer media buzz, especially with the Index announcing further media bonuses in just under two weeks.
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Risers
Callum Hudson-Odoi
A great game for Hudson-Odoi and a nice reward on the market for holders.
196 without a goal is an impressive tally. So is he that good?
Well, there is no doubt he is potentially performance suitable, that has been clear for a while. But it remains to be seen whether he is just good or great.
His headline stats are very good this season but we have to be aware that he is being let loose in almost every case vs very soft opposition where stats across the board for every Chelsea player are inflated.
The same was true last night where Chelsea had 68% possession. So, if playing a full season, these numbers would dip off because he will not have a flat track every game.
However, nobody can say it is not a positive step in the development of a talented young player when getting his first full EPL start. And, it’s not his fault the opposition was weak, he can only play what is in front of him.
With more pitch time and the transfer ban looming, it gets easier to persuade him to stay which is both good for long term next season prospects, but also pretty bad for media over the next 4-5 months and the bet on that transfer drama was the main reason many people have bought.
I am always wary of this sort of trade, and would absolutely never, ever, even consider buying a player like this for £4 or above.
There is simply no rationale justification for it. Even if the wildest dreams of success for England and Chelsea or any club come true, he is not going to return real value for years, if ever, for this sort of money.
This was a great trade to get on a few months ago (ok, hindsight). But to plow in now you are just lining other people’s pockets, and taking on a huge risk on an over valued player for the prospect of little further reward.
When I say things like that I know it is a red rag to a bull to pumpers or Hudson-Odoi fans in general and they are going to say mean things to me on Twitter for this. 🙂
Any views I have are just based on the stats and assessment of value though, I am not intending to pick on anyone in particular. It is the price that is the issue for me, not the player who has a lot of potential.
Ruben Loftus-Cheek
Loftus-Cheek shows he is not the only double barrelled Chelsea England international with pitch time struggles who deserves some attention.
Like most Chelsea players, he scored big with a nice 172. Had his goal been the match winner he would have been pushing over 200, which is good.
I’ve always liked him as a performance player. He starts deep but unlike most players in this position regularly gets forward and has decent quality chances on goal.
So, given a regular 90 minutes at a big club he could be excellent. That looks a long way off though right now. But, perhaps the transfer ban would help someone like Loftus-Cheek.
My worry with him has been that he might have to go to a lesser club to find regular pitch time. So, unless something changes at Chelsea, it might be a season or two until we really see what he is capable of.
He got a nice rise out of the performance too and it’s worth noting here the importance of percentage gains rather than looking at the gains in pennies.
The risers list is a bit of a lie and tends to draw people’s eyes to a small number of players (I am sure that is deliberate). I tend to think in percentage gains terms instead because it is more reflective of where the real profits are.
So someone on Loftus-Cheek last night would have made 4% more than a Hudson-Odoi owner because percentage wise he got a bigger rise. But to look at the risers list it looks like Loftus-Cheek did half as well.
It’s an example of how you can follow a trend without needing to follow the specific player that is being hyped or overbought.
Fallers
Paul Pogba and Neymar
So, these drops could be a bit confusing. If the trends are swinging towards media, then why would arguably the two best media players be dropping?
Partially, and it’s something I have been saying for a while, it is because they got a huge bonus in the build up to the share split, so it is natural that once that reason goes away, so do some holders.
However, with a big dividend increase ultimately delivered alongside, I think a lot of that was blunted.
They are still great long term holds for the many traders who like to collect low maintenance and steady dividends, now more than ever given the increase.
This caliber of player will always get a few stories for having a new hair cut or whatever.
However, even the best players do not get a free pass. They need a serious reason to be regularly in the news over the Summer.
There is some transfer links for Pogba and Neymar but I am not sure many really believe them right now so that will be hurting their prospects.
I think patient holders will be content to ride out any dip if there is no transfer. Of course, if something unexpected happens and a transfer does develop holders will do VERY well.
If not, you can be sure people will return to them at some point.
Therefore, it is not the price drop that is the real worry, it is more the money you could have made elsewhere that you are letting go.
Whether this bothers you heavily depends on your personal strategy.