I’m trying a slightly different format this week after the survey feedback. Previously, the Summary would repeat the main text just slightly shorter. To avoid duplication, the Summary will now give the headlines and then I’ll discuss the main topics below it.
When it comes to analysing the drops, there is a real mix of causes.
Neymar saw the biggest drop in pence at -37p. Though by no means in % terms which is tiny compared to others. This is a combination of his Champions League first leg result, his sending off, and probably some jealous glances cast Fernandes’s way as whales switch horses. His lack of Euro 2020 will always count against him too.
But that said, when you hold a quality premium player like Neymar you’ve got to commit and short term factors like the above aren’t a big deal. If you want out, get out on his way up, not when he’s on the way down. The spread is savage and 2% commission counts for a lot at this price.
Longer term a player like Neymar is likely to be fine, his fundamental dividend prospects are strong and he’s a good premium hold if you want one.
And PSG are far from out of the CL with an away goal and playing at home next, that’s a chance to bounce back.
Then there is some bad luck with Eden Hazard. Happens, and the only thing we can do is deal with the problem sensibly as I discussed for him in Scouting.
Lots of examples of drops for young players. Olmo. Pellegrini. Aouchiche. Martinelli. Cherki. Adama. Bellingham. Curtis Jones. Reguilon. Tanganga.
Some of these were clearly coming and have been covered in scouting. Martinelli. Cherki. Adama. Bellingham. Tanganga.
Olmo and Pellegrini had a bit of promise at times but were looking a bit ropey as per latest Scouting.
Aouchiche, Curtis Jones and Reguilon I like and they have dropped too.
When a trend burns out the good will drop with the bad because plenty of people don’t know the difference.
We can’t control this but we can make good decisions and we’ll end up on the winning side if we do.
If the player is clearly overpriced like a Martinelli or Adama and they don’t have performance strength, they are unlikely to keep going. That big moment where they get a big score and breakout is unlikely.
For an Aouchiche or Jones they can win when they play and whilst like most youth players the prices are inflated, they aren’t crazy.
You can sell to avoid the drop as the trend burns out but you will also miss the rise if and when they play and put up a big score. If they do it will be too late to buy then.
Aouchiche looks a bit more vulnerable to rotation, but that’s the risk you take with young players it’s par for the course.
Jones, with Liverpool close to wrapping up the title, has a reason we can believe he might get more minutes in late season which helps him.
Elsewhere, some elite veterans continue to struggle particularly if they have held onto relatively high prices like Parejo and Gomez.
Overall, what the market is showing us here is why the full season fit PLUS performance strength matters and it’s why I’ve been banging on about it so much.
It’s not just Key Strategy theory like it was a few months ago. It’s been happening for months and will only get worse. If we haven’t already protected our portfolios against this yet we should.
We won’t avoid every drop and shouldn’t try. What we should do is make sure that the vast majority of players in our portfolio have that late season reason to hold them and performance strength, certainly if they are running Guide Price or above for their position.
Now it’s time to be more cheery. If it wasn’t for social media chatter I’d not be thinking about drops too much at all – it’s been a great week personally and lots of good players have been rising.
Fernandes is the obvious one but it is not limited to him.
Sure, I’ve taken a few hits too but nothing too severe (Eden Hazard!) and overall good progress has been made.
The main factors that are pushing players up right now are:
– Full season fit, mainly a reason to hold them in late season beyond just performance.
– Trend fit, no older than 27 and ideally younger, attacking midfield or further forward or “flying fullback” defender.
– Performance wins
– Positive CL/Europa expectations
With this whole package, a player can do very well and push well above the site Guide Price.
With just elements of it they can be more shaky.
Players like Lees-Melou, Rodri, Palacios, Nkunku, Zagadou have risen this week for good performances. And it’s important to note how even towards later season performance strength still really matters.
But they lack some key factors and their price rise may be shaky. When they lack a late season reason to hold, or aren’t quite as good as people think (i.e the big score looked a rare event as reported in Scouting) they can find themselves on the fallers list soon after.
Someone like Fernandes has that full package but he is also getting expensive and is under a lot of pressure as he attempts to establish as a real premium big hitter. He can but he’s got to deliver as covered in Scouting.
de beek, Trincao and Havertz have also risen and these I would say are likely to be sustainable. Because the rise is based on transfer rumours that are very likely to keep running up until Summer (and just happen in Trincao’s case) it’s unlikely the hype factor goes anywhere.
Also for de Beek and Trincao in ineligible leagues, there aren’t many opportunities for the shine to come off. They can’t go on a poor performance scoring run and get sold for poor scores. Sometimes being stuck out in an ineligible league where they can’t be found out can be the best thing for a hype player.
So given that these above factors are resulting in price increases it stands to reason that the more of them we can stack in our favour the more likely we are to profit.
Success isn’t always that complicated it just requires the confidence that good Scouting/Strategy gives us and the conviction to follow it through.
Not every player has to have all these factors of course, but if they don’t tick all the boxes they generally need a discount price that compensates for it.
Here are some general examples of sensible exceptions provided they can be picked up significantly below Guide Prices:
– A performance suitable youth player who isn’t in the first team yet as a long term hold.
– An elite veteran punt who lacks the trend fit but has performance strength and has come off a big price drop.
– A weak performance player who has hype factor for a Summer transfer.
– A Champions League/Europa League underdog who is expected to be knocked out and has fallen in price.
Huge matches in Europe this week and that will be the big event almost certainly.
Outcomes of games moved the market last week but wait until we start seeing decisive results for big teams. We didn’t really last week. Tottenham and Valencia are essentially assumed to be going out but nobody fancies them much anyway.
Bayern, Barcelona, Juventus are favourites and therefore ironically perhaps at biggest risk this week. If they get turned over and look like going out we could see beatings for their players. Best advice here is don’t take players into a knockout if the idea of a knockout devastates you.
Chelsea, Napoli and Lyon are probably not expected to win so I don’t think they will take too much damage if they go out. And can gain big if they pull off an upset. This can be a good opportunity as if the prices have been beat down due to fear of a knockout you can get them cheap. They can be good value anyway ideally, and you’ll get a boost if the upset happens.
Real Madrid vs Manchester City is a tight game and it’s probably a straight up win/lose for whichever team looks on top. I wouldn’t expect any resulting drops to be too severe though. But the winners might get a significant boost.
Anyone who looks on the way to the Gold Day quarter finals could get renewed confidence. This can apply to the existing big hitters but I also think the better value can be in elite veterans who have a beat down price but can steal a Gold Day.
And don’t underestimate the Europa League. Progression still matters to get to the later Gold Day’s and we’ll see decisive results in the second leg, and it’s a bigger dividend too this time than the Champions League.
Arguably, the big teams making it to the Europa quarter finals onwards have a higher chance of Gold Day dividends as they will likely face much more one sided games than Champions League teams will.
Aside from Europe, a particular focus should be on acquiring the best Summer transfer targets, and the recent transfers article was a good start with that. I’m planning to spin up the transfers section for the Summer window either this week or next to give members lots of options here.
Other than that, I don’t think it’s a particularly complicated week ahead and Key Strategy sees us through.
It’s a steady as she goes focus on making sure our portfolios are tight and focused and we’re adding quality/value to our portfolios as it appears.