The theme of July has been pre-season run outs for kids with their prices running ahead even further.
There will be a very small number of diamonds in that rough but being realistic this is almost certainly an over reaction to young players starting early friendlies which is just routine.
As we get to the business end of pre-season and the early matches those young players will back on the bench (at best) and possibly out of the squad altogether for loans or another season in the youth team.
I fully expect the majority of traders to realise this (I think most know it already) and at some point in the next couple of weeks we will see a swing back towards players who are actually going to be on the pitch.
I think this swing is already starting, actually.
If a trader made a bet on this pre-season hype surge happening and you caught these rises you are obviously very happy. But to chase these rises thinking this is what the market is doing and is going to keep doing is a rookie move.
Even the most hardened advocates know the vast majority of these young players do not and cannot return the dividends to support their price this season or even next.
The capital appreciation drops away and we shouldn’t believe for a second that we are dealing with holders who are content to sit and wait for their chosen youngster to blossom over the next 2-3 years.
As soon as it looks like dead money, people will be selling up and off chasing the next big thing.
In my latest Trading Guide on strategy, I discussed the importance of managing risk to ensure you are always making progress and never taking big losses. Holding young players at these prices is a textbook example of something a good risk manager would never do.
I’m not saying don’t buy players like this. But if you did want to get involved it should have been done a month ago before those inevitable run outs for young players in pre-season, not after the horse has bolted.
It feels a bit like the last two weeks or so before the Share Split when people were piling into premium players chanting “but Share Split!” over and over.
Such players did continue to rise a bit further but they tanked hard afterwards. Actually, the best profits were available not in following this hype but in using the distraction to buy up the players people would almost have to go to next. See my public review of the members site strategy from that time to see how that worked.
This feels like quite a similar situation although the targets are different. Whilst being patient can be a challenge, it so frequently pays off.
Arsenal appear to have bagged Ceballos on loan which is quite a coup.
He is likely to be returning to Real at the end of his loan. Which is not necessarily a bad thing for traders.
Ceballos is a big talent and he could do really well at Arsenal. He is very likely to be playing a good number of games and I’d expect him to claim a starting spot. That was probably a condition of the loan.
How good could he be?
That depends on whether he is used as a number 10 or in a deeper role. If at number 10, if he were to show greater goal threat than in the past, he could do very well indeed in performance scoring. He certainly has the underlying numbers to support big baselines. He just needs the goals.
And there is the worry because historically, he hasn’t scored too many. And often, has been played in deep midfield where he probably never would either.
There is a cause for some optimism in that lately he has scored a fair few especially for the Spain Under 21’s.
So he is well worth watching with an open mind but he isn’t an obvious fit for performance scoring on past performance.
These big rises are always interesting when they have no clear and obvious cause (that I can see, anyway!).
What do we know?
We know he has the ingredients of a great performance player. But he is hot and cold and can go missing for large parts of the season until he decides to turn up.
We know he should definitely stick to football not rap.
He still might transfer, but in the absence of big rumours looks more likely to stay at Lyon than he did.
So why would he rise this significantly?
My first thought when there is a big rise without warning is usually that a big fish or trading group has started pushing on them. That’s quite likely here.
At £1.60-£1.80 I’d say there was fair value here so it’s not crazy to do that.
It could be that with Fekir out of the way someone thinks Depay will profit from penalties. That is possible although Moussa Dembelé will want to challenge that.
Or maybe, we will see more of this kind of thing as very short term traders see the end of the July kids hype train and jump off in favour of players who are going to be competing for dividends in the new season.
What an apparent mess for Fekir.
He ended last season as one of the hottest prospects around with dream moves including into the EPL very much on the table.
But Real Betis?
No disrespect they are a good club and have been improving but that does not seem like the move of his dreams.
So why would no big clubs have come in for him? It’s possible that lingering doubts over his now famously failed Liverpool medical are hurting his chances.
This feels more like a temporary move of convenience.
Around this time last year the same happened to Lo Celso and he was tanking in price. I said back then that I would expect him to do well at Betis and that he was too good to stay there long. By targetting him after that drop I was able to carry him to a very solid profit. But until Lo Celso demonstrated his quality in the performance scoring, it was difficult to get many to come with me on that. Most saw the move as a failure.
With that experience fresh in the memory though, many traders who have been around that long will probably be expecting Fekir to “do a Lo Celso”.
That is possible for sure. He is a solid performance player and if given penalties and made the main man there he could do well and put himself in the shop window for next Summer too. The way the Betis contract is constructed certainly hints at a sell on.
So, it is not all doom and gloom despite the spectacular drop.
The issue is that his price was so high that even now he isn’t exactly a bargain and better players can be had for less money if you know where to look.
So it’s not quite the same situation as Lo Celso who represented excellent value back then.
Still, I think patient holders will end up happy unless there is truth to the medical rumours and he falls over at some point.