State of the Market
The weekly State of the Market is now going to be a full members article in it’s own right.
Previously, it was on the Dashboard as a clickable, but after one member recently told me they had been here for months and only just noticed it (!), it got me thinking that it deserves a more prominent place on the site. It’s important content as I discuss how best to navigate the weeks ahead.
If the Key Strategy is the big picture of where I think it is best to be headed over the coming months, the State of the Market is where I flesh out the week to week details to avoid the speed bumps and make the most of opportunities ahead.
The post will always start with my Green/Amber/Red assessment of Optimistic, Cautious, or Alert. Fortunately, in the last year I have never had cause for a red flag yet! Amber (Cautious) has been used a few times and this is when I am generally on my guard as the market is overheating. The details of why I set the various ratings will always be explained here.
In last week’s update, I discussed the importance of the Dividend Review and tried to cut through the wild theories that were being thrown around about very specific groups of players benefiting from it.
Truth is, we don’t really know the details of exactly what will happen and we won’t until we do.
But, my overall point was that it is only players who actually return dividends that can benefit (at the expense of those who don’t). And so far, this has proved true with what we have seen on the market. People are waking up to that fact and performance players in particularly are doing well.
Hyped players who do not return dividends aren’t.
And, although I thought big ticket media players may do well too since they also return dividends, that is not proving true so far.
There is a (justified) nervousness about investing too heavily in them, particularly because of the huge spreads they have. What if no media increase is given at all? What if it is just a token effort?
As I said recently, FI’s growth has been built on performance, not media, and I think FI know that. They may throw a bone to media holders to soothe their recent anger, but overall, I don’t think this is the area of the product they are looking to push.
Overall, I expect what we have seen recently to continue with perceived strong performance players continuing to power ahead, particularly now domestic football is returning and with the 5% bonus ending on Friday. People will want their balances committed for that.
And it will almost certainly go towards the perceived performance strength. So, for those following site Key Strategy, there aren’t many changes to make here. You’ll generally already be in the best possible position.
One point to note however is that in general, the market is worse at knowing the real strength of players than members of this site will be. The hundreds of hours of Scouting over the season to date and consistently each week is responsible for that.
So, you can see players rising who have maybe had good scores recently but aren’t that great or lack the “full season” trend fit I am currently looking for in key strategy.
You may also see high quality players not moving if they haven’t won or scored highly recently.
I would not worry too much about this and instead just stick to signing the real quality, with the full season trend fit and at the best value possible.
There will be an element of luck here. A player that goes on a hot streak at this time is likely to gain a lot of traction whether that level of performance is consistent or not.
Use your superior knowledge of who the real quality is to trade accordingly, perhaps by selling an average player reaching a high price because of a hot streak. Or, holding a quality player who isn’t getting attention in the knowledge that they will probably put up a big score before too long (Much as Barkley has done, quality will come through eventually).
Overall, worry less about what the market is doing and just keep stacking the odds in your favour by holding quality players at value prices.
We should continue to be rewarded for holding dividend returning players in the next two weeks as build up to a dividend review gathers pace.
Be wary of holding too much overpriced youth and speculation because they will likely continue to be the fall guys. That’s not to say sell all of them, what I mean is, make sure the ones you hold have real FI quality and aren’t at crazy prices.
If in the next two weeks we see some dividend returning players reaching crazy prices, it may be a moment to cash in on them if that price far outstrips any kind of real value.
However, the players who have that “full season fit” through domestic league, Europa/CL and into Euro 2020 I will be much more inclined to hold even at high prices.
Reason being, as the season wears on, traders will almost inevitably be funnelled into that sort of player.
Making Euro 2020 part of Key Strategy from the very start of the season has really paid off and from feedback I know plenty of members are enjoying the results. I hope the majority are, and if not, do let me know via the Contact button.
A new Key Strategy is due in the coming weeks but I would not feel like you have to make a major shift anytime soon, Key Strategy users will be in a nice place and whilst we can make some useful tweaks, it won’t be until 2020 that things can get more dramatic.