State of the Market
Last week things felt a little glum on the market in general, with some decent players being sold along with the bad as factors like the international break and the comedown after the October high kicked in.
But I wasn’t down about it, as I said last week I expected things to to pick up again as the domestic football gets closer and we are starting to see that.
Not quite to October levels! We can’t expect that surge every month. But it’s getting better. There were also a few bright spots where good international performances delivered some wins – this is important for more than just the quick profit and I’ll explain why below.
There will be various times of year where we need to be a little patient and just stick to refining our portfolios rather than expecting money to roll in all the time. It won’t! And it doesn’t have to either to end the season with a huge total return which we are well on course for if using site key strategy.
Rather than getting frustrated in a quiet week and chasing rises, the focus for the next two months, as per the Winter Strategy, is to hit late January with a portfolio of strong dividend returners who all have a reason to hold them in the last half of the season.
That can be a big transfer, it can be Euro 2020. Golden rule here – the player must have a reason people will want to keep them towards the back end of the season.
The higher the price being paid, the more demanding we need to be from our players. Approaching the site Guide Prices or above, we need the “full season fit” i.e the prospect of wins domestically, wins in the CL/Europa and Euro 2020 optimism (or a big transfer). The lower the price, the more forgiving we can be on some of these requirements and they can be missing one or two factors.
More on all this is in the Winter Key Strategy and the recent Guide Prices article so I won’t go into that again here.
Buying and Selling
Last week, I said it felt like a better time to buy rather than sell and that has been the case.
Now though, things are improving and over the next week, it can be a decent time to get any players you want to move on into the sell queue. What sorts of players would I be moving on?
Anyone whose performance ability I have lost faith in. (as identified through analysis in Scouting). Whilst I am not one to panic over a few bad games, if there is a fundamental change or reason why a previously strong player is unlikely to deliver in future, I’ll move them on. This could be losing their first team place, or a decline in stats over the last 4-5 games.
Loss of a “full season fit” criterion – Perhaps the player is decent for the club but has lost their international place. We have to be a bit careful here as many big international teams, particularly when already qualified, are rotating heavily and team sheets are experimental.
If however they have lost that place but remain a decent player otherwise – I might sell them if they are at a very high price, or I might keep them for now but look to move them on in late December. Basically – the higher the price – the more I’ll be demanding and if the reasons for that high price disappears it may be time to sell.
Shaving some profit off the big hitters – As per the example I gave in Key Strategy of Gnabry – if my big hitters have hit such a large price that they have become a very large percentage of my portfolio – I’ll tend to trim some shares off the top to return it down to my rough target of 2.5% to 5% of my portfolio value in each player.
That can be reallocated to other big hitters I want more shares in, or to the Cornerstone 2 players from Key Strategy.
This is good risk management – what if that one player, however good, suffers some misfortune? It can happen to anyone (and it will!). This will blunt the impact when it does.
On buying – this is still a good time to buy as it was last week. In recent weeks plenty of decent players, particularly at the youth end, have dropped and returned towards value range. As per last weeks entry – just make sure you are picking up the real quality at value, not buying no hopers who are still over priced even after a drop.
A reminder – because of the Winter Break – Bundesliga/Ligue 1 players should be bought with caution and you should be quicker to offload them now if you are losing faith.
By contrast, EPL players will be particularly desirable in the coming month. It’s not a reason to buy alone, but it can tip you towards a buy you were considering anyway.
For the other leagues, I basically treat it as neutral as the break is short.
Tomorrow I’ll spend the day scouting through all of the recent qualifiers and adding the analysis to the site.
That is it for the qualifiers (apart from the limited play offs later on). A few things to think about here.
Does it mean for the next two months we should consider Euro 2020 less important? Easy answer – absolutely not.
Whilst the qualifiers super charged interest in Euro 2020 players and were the reason I prepared us for it so early in the August Key Strategy – we were never really holding them just for the extra few games.
The true importance of Euro 2020 is in ensuring players hold confidence and value longer into the season.
That means we can hold strong players longer, catching more domestic wins, and the lucractive big hitting later stage European nights where we have high chances to win Gold Days.
At the same time (Feb – March?), middle ranking players without that fit will be being sold – and where does much of that money go? To the full season fit players.
If, shall we say, less “strategically minded” folk think selling Euro 2020 players is a good idea now because the qualifiers are over – superb. That is a discount I’ll happily take should I want to increase holdings in some players.
The second thing is the importance of big scores and dividend wins in the qualifiers we have seen. Traders who put too much emphasis on historic scores and dividend wins will use this when deciding who to buy for Euro 2020.
So, we can reasonably expect traders to buy more of players who have shown strong performance in the qualifiers.
However, it is the analysis based on real match data in the site Euro Scouting which will tell us who is actually the best. This is because a big score or dividend win across a small sample of qualifying games can have a lot of luck involved, where as real match stats tell the real story.
We can use this going forward. Hold players longer who have big qualifying scores, even if we aren’t that sure about them really. And, target the players who have weak scores but have actually been unlucky to miss out. This is the sort of player we may hold during the tournament itself.