State of the Market

The market is still gunning ahead and there is particularly strong optimism right now. Even usually sober and sensible social media commentators are breaking out the rocket emojis and talking of lift off.

It’s not unreasonable to do that and broadly I am of that view. It is fair to say that FI has not yet hit the mainstream and has lots of room to grow if you believe in the product. 

I always think it’s worth a quick moment to keep our feet on the ground in times like this though.

Traders can be most vulnerable and complacent when it feels like it is impossible to lose. So it’s important to keep your portfolio sharp and focused and not start hopping onto bandwagons etc. 

On the bigger picture, I keep close tabs on the financials of FI as a company (through credit reports you can pay for on public companies) and generally speaking like the direction the management team take it. 

All in all I expect continued growth through 2019 and 2020, and the frankly insane 200%+ gains per season that are possible may still be there when using a great strategy and getting your selections right. Even average or poor traders might be pulling 30-75% although their mistakes will be punished along the way and that will only get worse as the market toughens up. 

My long term theory is that perhaps in 2-3 years a good trader might be very happy with 30-40% but we still seem to be in that young market stage where you can make the big bucks.

But it’s also true that anything can happen and as a risk manager by trade the usual advice about not getting carried away and keeping your investment at sensible levels for you applies. 

Whilst I like to have a good chunk of cash behind strong opportunities like this, it’s much better to have FI as one of a few things you invest in rather than betting your entire mortgage on it. 


The Flying Fullbacks

Elsewhere on the market, the quality from Scouting keeps coming through with Insigne and Hakimi winning last night. This can keep pushing prices further so as I said in Key Strategy all we have to do is monitor these elites and make sure they are likely to remain successful. (I say “all” it’s hard work and takes me 20+ hours of scouting a week but it’s worth it!) 

Flying fullbacks is the hot topic of the week as the success of TAA following his incredible improvement over October and early November switches people on to the potential value of full backs who can score or assist.

This shouldn’t be news as this has been part of Key Strategy since August but you do have to be very careful in the selections.

It’s a category where the very top players matching this description can win consistently but outside of the elites it will be a struggle.

If for example you take the now £6.88 Trent Alexander-Arnold and then find a player with 50% of his relevant stats, you can’t say that player is worth £3.50 or even £2.50. And yet many will do exactly that on social media.

But without that extra edge that player is not going to deliver the peak scores required and a higher than average baseline is no good to us at all without those peaks.

That’s why I’ve said in Key Strategy that for defenders the focus has to be on the statistical outliers – the ones with exceptionally high stats.

With a trend like this, once the top targets are bought up, people will start looking further down the pecking order and hold up examples of average quality players and compare the price to the top end. 

Whilst we may be able to ride this behaviour to a short term profit (and there is often good profit in doing so if you have the time/inclination) we must do so in the real knowledge of who has genuine value and who doesn’t. Otherwise, we don’t know who to sell and who to hang onto.

When a short term and very specific trend like this hits the market it tends to burn itself out fairly quickly. There are only a limited number of targets to hit and once they are gone they are gone.

So, if you haven’t profited massively from this mini-trend it’s not a problem at all and the worst thing to do is chase it after the fact. For a fantastic ROI over the course of a season, you do not need to be on every temporary trend going.

It’s far more important for your overall returns to stick to your overall plan than be sidetracked by the dreaded Fear of Missing Out which leads to following the market rather than leading it.

This morning I had a look for some examples of players who can hold a candle to TAA’s currently insane stats. The real answer is nobody right now honestly, in the last 4-6 weeks they have been special. But there are some who are getting close.

Hakimi, as covered in Scouting on Monday, looks very strong although it’s no secret now following last night. Interestingly, he was at RB this time which is good news as it helps the reclassification risk a little bit. But his actual position was extremely advanced and his threat was immense. Rotation problems are there too but there is no doubt he is quality. There is more on him in Scouting from Monday.  

Angelino at City is giving Mendy serious competition and if he does there are reasons to believe he will be a class act on FI. Actually, in the last 2 games both vs Southampton he attempetd an astonishing 30 crosses which is TAA level (though he did not make as many long passes in these games). His record at PSV is impressive (12 assists last season and very strong throughout for crossing etc) 

In FI terms he looks vastly superior to Mendy who is over twice the price but for that to count we will have to see whether Pep agrees in reality.

There will be rotation here as he battles Mendy so patience will be essential but he’s got strong potential ( 4 out of 5 stars ? But I need to see more games before I add him to ratings) and at just 81p there is a lot to like.

Kimmich is the obvious one you reach for when thinking of great full backs and he’s flown on the market for that reason but reviewing the stats recently makes me stop short of recommending him at the new price. Bayern’s inability to keep a clean sheet hurts and patches of poor form have held him back. He’s produced decent averages but not many peaks and his best game came, typically, in midfield. I think overall he’s probably been a bit unlucky over the season and will pop up with a big score before too long. 

But unless we see an improvement under the new coach I’m not totally convinced on recent evidence.

A more defensive minded coach could improve the clean sheet problem but possibly keep him on a tighter attacking leash so this is a tough one to call right now.  

Reguilon at Sevilla is doing better than his recent scores suggest. Was getting way overhyped after an opening match day goal and big score which I said at the time was probably something we will not see regularly. That has been true. But if you now evaluate his whole season and particularly the last 5 games there is a lot to like and he is probably due an assist or goal and could post a decent score. So for £1 given how much the market has moved since August, I think he looks decent now.

The cheap short term punt pick also at Sevilla, is Jesus Navas. His recent 273 vs Levante was not an accident. He’s showing lots of forward movement with strong assist potential across the last 4 with lots of crosses/long passes (actually the closest competitor to TAA across the big 5 leagues in this regard though not many will know that). Particularly vs soft opposition he has a reasonable chance of doing this again so for 69p as a short term punt it’s got substance behind it. 

Robertson was not far behind TAA around a month ago but where TAA has improved dramatically, Robertson has stayed the same. He did however get a bit unlucky in early season missing out on posting big scores by a whisker (you wouldn’t know it just by looking at the scores alone) and despite not hitting a dividend win so far, he’s got the ability to do so. 

Kolarov can never be discounted and has been a Scouting favourite from early season at an astonishing 44p even in August. £1.10 now it’s an incredible profit and it’s shows the power of being unfashionable (until you aren’t). Some ropey stats in October actually but with penalties he should have his big days. 

These are some examples rather than an exhaustive list but as per Key Strategy on defenders the golden rule is this – good FI defenders have to be real statistical freaks. 

High baselines and high goal threat or assist potential are essential because without that, stringing enough wins together to gain momentum on the market is extremely difficult. 

For that reason I stick to the elites and avoid the middling nearly men who are good but not great. 

I will have a punt on a potential player like Reguilon or Angelino but they need high potential and a cheap price to account for the patience you’ll likely need to show with them. 


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