New Traders often ask me the same questions: can I still make a profit starting fresh without bonuses? Can I still find value when other people have been here so much longer? Can I do this if I don’t have a lot of time every day?
I think the answer is absolutely yes. But rather than talk about it, it’s probably more helpful to show how it can be done.
Starting from scratch with a £1,000 balance on day one of the new season, I am tracking my progress showing not just each trade but my thinking behind them.
The rules:
1) no direct use of bonus cash,
2) start with a blank portfolio,
3) long term and time efficient style, with no constant phone checking or watching every game.
Notes for New Readers
I’ll be trying to show not just the trades but my thought process and reasons behind decisions I make. The specific players I pick are less important.
You can check out the original post where I introduce my overall strategy and explain the opening selections.
As I obviously have an existing portfolio, I will not make these exact trades but they will be tracked realistically.
I will also own every player on this list for real so the selections will get my full attention. Generally, I select players I have talked about positively on the site.
I always say though, don’t blindly follow any picks you see from others including mine. Do your own research and if you see what I see, great, but you have to know why you have bought the player and be happy with it.
The £1k Challenge Portfolio
- Portfolio Value: £2380.10
- In the bank: £5.03
- Value Increase from £1k: 138.01%
- Value Change from Week 28: +17.71%
Portfolio Performance
Probably one of the best months so far with a 17.71% increase from March in the portfolio value.
That takes us to a whopping 138% increase on the day one season starting balance. All achieved across just 33 trades with no social media pump players and the big risks of drops they carry when they fall out of fashion (arguably Felix now fits that category but he did not when I bought him for the Challenge at 66p).
I followed the trends, but that is very different from piling into players being artificially pumped.
Many of those players took withering losses this month and if people hung in too long they took a battering. The pumpers were out in force saying “hold the line, it is idiots selling, they will bounce back!”.
Well, you know what’s even more fun than waiting for your overvalued player to become overvalued again? Not taking losses in the first place.
That’s why I always talk about this kind of risk management because none of us know when players may drop in value. And the over valued are always most at risk.
Interestingly it was not Felix who made the biggest profit this month but last months selection Bruno Fernandes. Although Felix rose more, my aggressive buy of 225 Fernandes shares really paid off.
As per the last update before the Share Split, my strategy of getting all the money out on the pitch and not waiting for the announcement proved sound.
With the next major announcement (media) on Monday, it’s a good time to highlight that, for me, these big announcements are generally about preparation rather than panic reaction after the fact.
The only way the wait and see approach will pay off in my view is if FI do something very unexpected. And, with the narrow focus on media, it’s hard to see much that could surprise us. I could be wrong but you have to place a bet on an outcome and that is mine.
Outside of Felix and Fernandes, there is a general sense that the market began catching up with my early move towards Summer/media centric players and away from performance as the season ends.
So, Chiesa, Ziyech, Dybala, Savic, Man all contributed well alongside the huge rises for Felix/Fernandes.
Aguero also got a rise as the Champions League and renewed focus on In Play Dividends gave that sort of player a bit of a bounce.
The only mild fallers were T Hazard and Thauvin, dropping 6p and 5p respectively. They are potential transfer speculation picks but, as discussed below, not all transfer picks are created equal.
Sells and Holds
Aguero is gone, the only other survivor from my original day one picks other than Savic. So, if one of the goals of the Challenge was to prove you do not need 10,000 Neymar’s purchased for 12p a share on a long term hold to profit on FI, I think that box is ticked.
In fact, the players I have held the longest are stagnant or in mild losses (Savic, Thauvin, Anton). Thauvin I have actually sold and rebought so I did actually get a profit on him overall.
Aguero is a solid player but for this portfolio I was waiting to use him as an example of a common play I make which is to offload players I do not want to hold in the Summer at a peak once we get towards a big CL match day.
I also got a bit lucky here as the renewed IPD focus brought a bit more attention to players who are actually playing and scoring goals. But, when you hold good players rather than bench warmers you tend to make your own luck.
Overall though, Aguero has not been a good trade. Whilst he is good quality he has been against the trend for most of the season and I was probably a bit stubborn in holding onto him. I tend to make this portfolio reflect the overall strategy so I kept him on as an example of a player you might hold for the CL.
But, if you make a small profit or just a small loss on your bad trades, you are doing fine and nobody gets them all right.
Ruiz is gone too. With no transfer speculation, he was getting off trend. He has also been a bit frustrating in his performances because whilst he has amazing possession, getting even towards Alcantara levels, he is just not putting away enough of his considerable number of shots. But, he will be one to look at again in pre-season.
And the final sale is Werner. Again, a good quality player who could be excellent at Bayern. Whilst he is relatively low baseline, he converted me with his tendency to be prolific and bag 2 in a game, which he was doing with alarming consistency until recently. But, with a drop off in form, and given that the move to Bayern is long awaited and not particularly news worthy, he is out.
The rest are basically fine. Most are recent purchases that reflect the coming trends.
Felix, after his value surge last night is very likely to be over valued now. Certainly he is when comparing to a realistic dividend return.
But, with the trends as they are, there is a case for holding further given the likelihood that the Manchester City/United links will continue. That’s what I will do for now.
There is a big difference however in finding a player like this at 60p as we did for the Challenge (much earlier in my real portfolio) and plowing into him at £3.
The first is fantastic and something to place a big bet on early. The second is a highly questionable move that is likely to get you burned. That’s why I can quickly go negative on a player that is running away in price. It’s often the price, not the player.
Buys
With the sales I had £389.03 to spend by the 2nd April.
I chose to double down on my summer/media strategy. I was here a long time ago but many are still coming round to the idea and I think there is mileage in it yet. The latecomers are feeding my profits nicely. I may switch up my strategy soon though. Once I feel that most people have caught me up I tend to move on.
I went for 200 of Leandro Trossard. The Genk man is performance suitable and has some credible transfer links to Arsenal. At the cut price, he could see a nice rise.
And, we welcome Memphis Depay again for 200 shares. He has been hot and cold all season but some of his stats, particularly recently, have been excellent. He is also sulking and pushing for a move, possibly to the EPL. His price remains kind for such a high profile player, and if links to Liverpool hardened up the price could really fly.
I was tempted to shop in the “blockbuster media transfer” end of the market, particularly with the announcement on Monday. In my real portfolio I do own that sort of player at times like this (although not generally during the middle of the season).
That could have been Bale but whilst I am convinced he will move, I cannot see which EPL club would take him at the moment. Or it could have been E Hazard, but my Challenge budget became available a bit late for that.
However, whilst there are difficulties with those trades, with the media announcement on Monday, they could really rocket.
But, for the Challenge with a limited budget I have being particularly aggressive and targeting the lower value player, so I decided to stick with that formula here.
What's next?
More of the same for now with a continued focus on the Summer trends in front of us.
The Monday announcement will make a big splash, and just like ahead of the Share Split, I have all my money committed and am definitely not going to “wait and see”.
Worth a note that the Challenge is a bit, by nature, backward looking.
For more real time and early strategic thoughts and player analysis you’ll want to check out my members area where all of this is discussed in advance rather than retrospectively. The link to that is below.
Finally, I am deciding whether to end the Challenge at the season close, or continue it throughout the Summer as actually, trading far from stops and analysing pre-season and setting up your portfolio for the next season is one of the most important times of the year.
The Challenge is a lot of effort to do but I am happy to continue if people find it useful, so, please give the post a like on Twitter if you would like it to continue! 🙂