Just wow. I’m struggling to remember a week of such big moments. Kompany’s screamer. Alexander-Arnold’s corner. Moura’s last gasp winner.
Any of those could be the season highlight and it all happened in just THREE days.
How amazing sport can be aside for a second, it’s interesting to think about just how much this feel good factor (or feel bad factor!) can move the market.
And that for all of the traders like me who work on match stats, prices and market trends, trading for fun or in excitement is still a thing. And why shouldn’t it have a place?
It is a lot of fun to see the players you have invested in early coming good in a big game and flying on the market. Which is just as well, FI can’t survive long term just on the promise of profits which will get harder to make over the coming years, it is a recreational product and traders have to enjoy doing it too.
I also get sent a lot of portfolios to look over. I’d say in more than half even in some very solid portfolios I will ask why they hold a certain obscure player and the answer comes back “Yeah, I know I shouldn’t hold him but I’m an <insert club> fan!”.
There are two things that come to mind with this. Firstly, for those of us who consider ourselves rational traders we need to be aware that not everybody trades like us.
Of course it is ridiculous that prices moved as much as they did this week over things that, when broken down to dividend terms, are actually fairly trivial.
But that doesn’t mean people don’t do it in times of emotion when their blood is up with excitement. And the opposite is true, when a team is knocked out people can get too down on them, too (unless they were overpriced to start with!).
This all creates opportunities to buy and sell at premiums or discounts as appropriate.
We can stay rational but we have to work within an irrational world and not just get too focused on what people “should” be doing. Which is why paying attention to trends without slavishly following the individual players who are being pumped is crucial.
Recreational trading gets made a lot of fun of. It is losing trading and there is no doubt about it. Trade for fun alone and you’ll get sent home crying.
But, with the joy of football in mind this week, if you are just setting aside a small part of your bank to hold players you enjoy following, and you are well aware of the difference between this and your more sensible portfolio, who is to judge?
Finally, a quick thank you to all readers over the last year! Yesterday Twitter reminded me that it was a year to the day that I started the blog. Thanks for the encouragement!
Risers
Lucas Moura
He almost deserves to be bought after that, right?
The reality is much trickier.
With Tottenham’s injury problems he gets consistent minutes. If playing regularly, he’s a reasonably good performance player. Goal threat is strong.
His all round game to build baselines with is not brilliant, though. He can often go missing in games and make only around 20 passes which is poor.
In others, when deployed on the wing his involvement will go up but he is played in different positions often and this hurts his consistency.
He also doesn’t have the best passing accuracy so making a large number of passes doesn’t always help, if you make a lot of passes and a fair few go astray it can cancel each other out.
So, what we are really looking at is a player who is going to need at least 2 goals and the match winner to challenge in normal circumstances.
He can do this, but holding him for the 3-4 times a year this may happen is patient work.
In his favour, the price before the match was reasonable and I highlighted him in my members CL preview article along with Llorente as the man most likely to make an impact. He was a great punt then.
Now, not so much. He might feel attractive until the CL final but then if that doesn’t go well or someone else is the star, the reasons to hold him fade fast.
Trent Alexander-Arnold
TAA is a solid player with good trend factors in his favour. But everything is about price and buying at peak hype is almost always a terrible decision.
For a very long term patient holder he should bring in some dividends. But for the money, those dividends are going to be a pretty soft reward compared to what else you could be doing with your funds.
And, once a player reaches this price, whilst they can increase a bit more, they are just as likely, if not more likely, to tank back down again and we have seen this many times recently. Even with players that if you read social media you might think are “immune.”
I wouldn’t pay much attention to this. Some of it may be well meant but it is almost always holders trying to prop up the price.
There is a reason why defenders don’t compete for forwards with price. Aside from goals IPDs, it’s that defenders only very rarely win media or have the prospect of getting it.
With a forward, people always believe there is a chance they become a big EPL or world class striker one day and have media prospects.
TAA is a great trend fit going forward but markets are about information. If everyone already knows he is good, his price will match it (and in many cases exceed his actual return prospects).
By this point in a trade, you are taking on all of the risk for a chance at taking the scraps other traders leave you from their table.
In this situation, if I hold then I’ll sell. And if I don’t hold, no matter how much I like the player, I leave it and find something else.
Fallers
David Neres
It’s in the fallers where it is often best to shop and Neres has been really impressive in the last half of this season. I’ve liked him more and more as a performance player as the season wore on.
He took quite the kicking last night. And, given the massive rise he got in the last few months, you can easily make a case that he is still over valued.
It’s probably the big spread locking a lot of people in now.
However, he does still have some good EPL transfer links and if you believe those, some people may still fancy a bet. Liverpool are the latest to be linked.
I think traders would be pretty optimistic if that happened, at least for a short term media blitz. Longer term it gets more difficult as rotation could be an issue for Neres at Liverpool. And Liverpool are not the best performance team.
I like him as a player though. I think actually, I’d be more interested if the price tanked and he moved somewhere like Dortmund (also rumoured) where his performance suitability might shine through more.