Last week, I gave some examples of how I would actually use the new Key Strategy it to find a suitable player that met the Cornerstone 2 selection criteria.
The main goal of Cornerstone 2 is to position ourselves with very strong and desirable performance players ready for the new season.
That’s really important but during May it can also feel a bit far away. It won’t be until late June and into July that I expect big gains to come for these sorts of players.
That’s why Cornerstone 3 exists because there is still a long Summer of media ahead that pays five places. And for those who want to do some transfer trading, we can take advantage of that.
So, for this In Practice article I’ll share some thoughts about some media players I might consider for the optional Cornerstone 3 as five places of media approaches.
At the end of the article I have also included some discussion of when to sell players as per Cornerstone 1 of the strategy. I’ve had quite a few questions on this.
If used correctly, many drops in old strategy media/transfer related trades have already been successfully dodged (Felix, Fernandes, Jovic etc).
The strategy offloaded those players at the right time with them close to their high. But it’s not always easy to tell who is overpriced and who has further to run. I’ll discuss this tricky topic more at the end.
Cornerstone 3 Recap
Let’s turn to Cornerstone 3 and think about the sorts of players I might pick up (and avoid) as June approaches.
OPTIONAL/ADVANCED - From mid-May onwards, we may want to acquire some strong media players who have near "nailed on" reasons to be in the news during June, in time for 5 places of Media. Look to sell in early/mid June.
As per the portfolio balance diagram in the strategy, I was aiming to have about 50% of my portfolio still in my best media/transfer related players by mid May and I am on target with that. The rest is now loaded up with my first “most obvious” performance picks as discussed in the last In Practice article.
By early to mid June I want media/transfer related players to be more like 20% of my portfolio and close to 0% by July.
Whilst we can go for some good transfer trades, we shouldn’t feel like we need to be trading all the time in the Summer to keep up with the fast moving market.
We all get that urge to “do more” and trade even though there is no relationship that I have ever seen that more trading = more profits. In fact, I think it is often the opposite.
For example, the New Trader Challenge article at last update on April 12 was 138% up from the season start from just 33 trades. 3.6 trades per month.
(If anyone is wondering about the next NTC update, I am intentionally dragging my heels on this as I don’t want to give away too much members strategy in public too soon. But I will get to it, it is worth showing because it will be far higher than 138% by now.)
Cornerstone 3 In Practice
With Cornerstone 3 transfer trades, we can loosen up a bit on our Cornerstone 2 selection criteria. The more of those traits they have the better because that will give them more value if the hoped for transfer link does fall over.
But, when trading on media hype like this, we need to work with the current market trends and social media chatter much more than worrying about being too rationale and clever. It’s a different sort of thinking from Cornerstone 1 and 2.
This part really is about buying what other people will buy just because of that. Which is why it can be trickier to navigate and requires confidence to do smartly. Otherwise, we will do no better than the mugs clicking buy on anything in the risers column.
The targets will be obvious as we get towards June (we are after all trying to pick players who will be topping media!) so the player selection doesn’t have to be too clever. But the timing of entrance and exit is key.
Get who you want to buy straight in your head now and either buy them early if you think there is value hoping they hit the right link nearer to June or buy them as soon as they start to look near guaranteed for a spree of media in late May/early June.
Example Players
So let’s look at some specific examples of Cornerstone 3 players I might go for (or not) as we approach five places of media.
The Blockbuster
These are absolutely massive transfers where if the story breaks and looks credible in late May or even into June there will be huge trader interest.
Dream scenarios just for the example: Bale to Manchester United. Dybala to Manchester United. Sancho to Manchester United. Mbappé to… anywhere in the EPL or even Real Madrid. Neymar to Real Madrid.
You get the idea. If something huge like this really started looking credible and like it had a good few weeks to run it’s feasible to jump on it relatively late without too much worry about the price provided you aren’t days late and it is has got totally out of control.
They will be stories that dominate the Summer and are as close to a guaranteed media spree and quick price increase as you are likely to see.
The golden rule on this type of trade is this: do not be too greedy and hang in too late for those dividends if you do not want to hold long term at the price.
Sell as people are still buying, ideally to market to avoid the big spreads on these players. That will be worth far more than an extra 4-5 days of dividends and the risk of a drop as the story reaches an end.
Where a player is particularly performance and media suitable and you think the price is still fair, you have the option of holding into the new season here because traders have reason to believe their long term dividend prospects just increased.
The Negative Blockbuster
These are players of the same calibre as above. But, the crucial difference is that traders will expect their prospects for long term dividends to get worse after the initial media spike.
Usually, this is because they are leaving the EPL.
Pogba is the best example of this. Eden Hazard to an extent too.
I would be very wary of being involved in this type of trade at this stage because whilst it will be amazing for initial media, lots of traders are going to want out of this very quickly.
Pogba for example is hugely reliant on penalties for the majority of his performance returns. What if he went to Real and Ramos didn’t give up penalties? And outside of the EPL, most traders are going to assume media dividends will reduce too.
It’s possible these trades could still be used for a profit provided we are very confident the story is going to drag on and on. But, I’d always be wary because traders just do not like moves out of the EPL whether their real prospects improve or not.
Incoming EPL Moves
This is somewhere we want to be using our Cornerstone 2 criteria as well.
So, if we have a really good performance suitable player coming to a big EPL club (Brandt? Bergwijn? Ziyech?) these are players that are well worth having and we have options with them.
We’ve got both short term (and possibly long term) media opportunities and long term performance optimism supporting the price and don’t need to be quite as quick to flip them if we don’t want to.
They can be sold as normal like a normal transfer speculation player after they get a big value spike if the transfer link really heats up.
Or, if the price isn’t insane and optimism for them for next season is high and they fit our Cornerstone 2 criteria nicely, we can hold them into the new season.
The Value Transfer
I like these trades because they tend to be quite low risk with a big upside. They are just quite hard to find.
As examples from the Transfer Centre:
Flavian Tait. A performance suitable player good for IPD and a long shot dividend win even at Angers, still at just 44p with strong links to Lyon. When first added to the TC he was just 35p. At Lyon it is easy to imagine him coming up to 80p or more by the new season.
Matthias Ginter. A solid Centre Back with fashionable ball playing defender traits and breaking into the Germany side. On the radar of Liverpool. Even though he isn’t the “exceptional” sort of high goal threat defender I go for, the price is right given a) he is a decent hold even if he stays at Gladbach, and b) the Liverpool link could see him move closer to 80p fairly easily from his current 50p price.
There are a lot more of these usually in Cat C in the Transfer Centre. Just make sure the price hasn’t got silly since time of publication.
Unlike the other trades, they will not be expected to generate huge media dividends and so it is more about making the most of the price surge at any point in the Summer if they do get the desired move.
I’ll also be adding more in the coming weeks.
The Failed Transfer
This is not so much transfer trading but it is related and very profitable.
It’s about keeping some of your balance free to hoover up good quality players that fit our Cornerstone 2 criteria who get a big price fall because the hoped for transfer doesn’t happen.
There will be a lot of these and it is great way to profit.
As long as they fit our Cornerstone 2 criteria, the more negative the market gets on them the better to drive the price down.
When that hype dies, either because the transfer doesn’t happen, or even if the wanted transfer DOES happen, traders who are chasing the short term media will exit.
That is when we step in to hoover up strong Cornerstone 2 talent at a discount.
This is another reason why we don’t have to be too worried about “missing out” on transfer hype. At this stage of the strategy, we do not have to be “all in” and having some bank free opens up a lot of opportunities.
Final Note on Cornerstone 3
Cornerstone 3 can be quite time consuming and require some skill. But it’s a great way to net some extra profit and keep ourselves occupied in what could otherwise be a quiet May and early June.
Hopefully this gives members more of an idea of how I use it in practice, and as always, if you have any questions feel free to ask via the Contact FIT button below!
I have had a few questions on “when to sell” players for Cornerstone 1 of the strategy, so I’ve included further discussion of that below as optional further reading!
Cornerstone 1 So Far and When to Sell
In early May, as per Cornerstone 1, the new strategy seeks to offload all of over priced old strategy media/transfer hype players that have had a really sharp value spike and rely too strongly on a very specific event like a transfer to hold that value.
Hopefully members have already seen the advantages of this because if used, many price drops for this sort of player have been dodged already (Felix, Fernandes, Jovic etc).
Holding onto your gains is so important and these exits were made at the right time under the strategy.
Let’s also look at “when to sell” in more detail because it’s a tricky topic.
It is not always easy to tell who is over priced. Site Guide Prices are a good indicator. And I am always wary of players that are all the rage and “must have” on social media, they are most vulnerable after a large value spike and the more people trying to convince you of their essential status the more sceptical you should be.
The better the fit with the Cornerstone 2 selection criteria, the more comfortable we can be hanging onto them. But generally, I will err on the side of cashing in a highly priced player who has sharply increased.
This manages the risk and I have already side stepped many drops this way as discussed. The downside however is that we may miss some of the transfer trades that come good and fly and we have to accept this.
This is mentally tough. We have to get over the difficult “but what if he does go to Manchester United and I miss out?” feeling. That feeling is responsible for a lot of losses on FI and comparatively few gains.
Simple reasons:
- Far more hoped for transfers go bad than good. We have to always be stacking the odds in our favour, not betting on long shots.
- If we are confident in our new targets that we spend the profits from old strategy players on we do not need to fear missing out at all. More likely, we can make even more than on players who have already spiked in value.
- Chances are no matter what happens the player will drop during or after the transfer speculation ends with a move or not and we can look at them again then if we genuinely want to hold for the season. Many traders are only in it for the transfer hype and will likely cut loose when it ends.
Not all players are easy decisions though even for very experienced traders.
Felix and Fernandes are examples I’ve already discussed and they were no brainer sales for me once they had really rocketed in price. Sancho could be another example of a high risk player if he does stay at Dortmund which is looking more likely. This is because the United link fueled a lot of the Sancho buying and if this disappears it’s going to hurt.
Players like Pepe are more borderline because they are likely to slot straight into a good team and are so high quality that they could generate plenty of excitement at their existing prices.
So, they are more of a 50/50 call right now. Personally I would probably sell knowing I have other options but as long as you are confident in the long term success of a player and can stomach a short term price fall, I think it is fine to hold too. And you never know, he might get a bonus EPL link and fly even higher.
Some tough decisions for members here but personally if a player is giving me a headache and is starting to feel like a 50/50 bet I’ll tend to take those profits and move them to a player I have much more confidence in.