Everyone wants to find the next breakout stars for next season.

There is so much hype around. 

Some decent players are rising in July for sure but I would say the majority of those being pumped are either poor value or poor quality. 

This isn’t surprising. Unless you have a really good idea of what to look for and the time to scout through every team you are going to struggle to find the real gems amongst a lot of fool’s gold.

Sure, you can buy every kid going if you want. But that spreads you very thin and the big profits on the few who make it are going to be dragged back by the majority who fail.

Perhaps we first need to think about whether we even have to care whether a player is good or not. It’s a hotly debated topic.

After all, all you need is other people to buy them, so the saying goes.

Traditionally this is known as “greater fool theory” trading. I can buy something rubbish as long as someone stupider than me will buy it for more.

Trouble is, everyone buying thinks they are the savvy one and nobody thinks they are the fool. 

How do you know?

Price is the primary indicator. 

If you are buying players that have a strong trend fit before they are over hyped and plastered all over social media, you’ve got the best chance of success.

If you are following pumpers, chasing rises, or suckered in by the people pushing the player on social media you are most at risk of being dumped on.

The particular challenge when holding untested but hyped players at very high prices is that a large proportion of the holders know they are involved in a pump. There is no real loyalty or belief that the player could possibly justify the price anytime in the next couple of seasons.

That makes the price very brittle because the second there is some “bad luck” (i.e a loan move, an injury, or a weak performance or two) many traders will want out quickly. They know it’s a race to get out first.

By contrast, players with more established/reliable dividend credentials are always going to have people willing to prop up the price (barring a really drastic change in circumstances) because those dividend returns underpin them. 

However, well established and reliable players do not deliver the best profits either. You pay a premium for that reliability. This category of player is best held by passive traders who want a relatively low risk and steady income.

Lots of energy is expended arguing between the Neymar/Pogba corner and the Greenwood/Brewster corner. Proven Quality vs Hype/Trend fit.

Personally, I think this is a completely false choice. Why not have quality players who fit the trend?

Given the large capital appreciation on offer, I am not content with passive steady dividends. Nor am I content to hold over valued, risky, and often weak players in the hope of greater fools buying them.

Instead, I want to be finding quality players with a great trend fit at value prices. Last season it was early aggressive buys of the likes of Kai Havertz, Bruno Fernandes, Joao Felix, Thorgan Hazard etc that powered my profits. 

Finding such players early is not easy. Most people are not equipped with the ability or time to do so. Which is why it is tempting to follow an easier path.

But I believe this is where the optimal trading is. Not only does it give you a route to both strong capital appreciation and dividend wins, it means you don’t get into the bad habit of holding onto overpriced risky players for too long.