We’ve actually seen a fairly buoyant market in recent days, all things considered. As expected anticipation of the long spell of media is dominating with premium players and transfer speculation players getting the rises. 

I shared my thoughts on some good targets here in the first two Value Hunting articles.

Not many players are dropping significantly. Bruno Fernandes is, which is not entirely unexpected. He has spiked heavily recently and the type of trader who is chasing the daily dividends will always jump ship to whoever is in fashion on that day. 

I’m not quite sure whether anyone is buying those shares at the moment – I hope for the sake of these traders they are not Instant Selling at these savage spreads without an extremely good reason!

It’s really not easy or sensible to be dipping in and out of players right now.  

No doubt, this relative market calm is due to the spreads lockdown more than widespread confidence. But it is encouraging how well FI is holding up to tough times so far, even if it requires heavy handed intervention from FI. 

Really, they can keep that lockdown in place as long as it is needed to ride out the uncertainty. Whilst that hurts some who need money now, for the rest of us, it’s likely very very helpful.


The First Real Crisis

This is the first real and sustained problem we’ve ever really had on FI. So it’s interesting to see how the market is reacting. 

I have always highlighted the importance of sticking close to performance strength and the real trends ahead, not just because it’s often more profitable, but because in a storm you can be more confident when holding quality assets.

Even if they drop, there are credible reasons why they can bounce back later on. 

I think that approach has proven worthwhile – I’m holding plenty of high quality performance players now and feel pretty relaxed about holding them even if they aren’t in demand right this minute. 

In fact, if we get a reboot of the fixture calendar they will be exactly the players people want and I’ll profit without having to do to much at all.

If I was holding too many players who relied only on a very specific hype factor like the right transfer I’d be much more nervous. If that very specific event breaks down I have no real way of dropping that player without taking a very large loss.

I think the lesson we should draw here is that we cannot rely on the spreads to bail us out of bad/wreckless decisions. Perhaps 6 months to a year ago many did and I think lots of traders are in that habit, particularly experienced ones. 

But the spreads have been getting wider for a while now anyway. In the event of a misfortune, be it a market wide crisis, a bad injury or a transfer link collapsing, we can’t expect to take just a 5-10% hit any more it will likely be much greater than the spread appears.

Once something bad happens, that spread will increase drastically to stop panic selling. Mistakes are just getting more and more expensive.

That’s why I never stray too far from the real win mechanics of FI. I still take plenty of calculated risks but generally, the player always has a fall back position i.e “I hope he hits his transfer to a big EPL club this Summer, but if not, he’s acceptable at his current club at this price”. 

This has a much better chance of consistent success than “He must hit his transfer to Manchester United this Summer or he is extremely overpriced at his current club.”

This is why my style of trading tends to result in consistent progress and very few significant losses. And that’s the secret to big overall returns.

Positional Changes

We had the positional changes making waves this week too. These are proving incredibly unpredictable in timing but not in substance. Players like Gnabry, Kimmich or Alphonso Davies we have been expecting to move for some time.

Kimmich in particular has been a ticking time bomb all season as highlighted in Scouting. Given the high likelihood of him being reclassified, it was just a straight up awful decision to be holding him if you weren’t prepared to hold him as a midfielder. For those who sold on the news of the actual move it’s incredible carelessness.

Likely, if the spreads lockdown was not in place that drop could have been much greater and we may see him bleed out more.

This is the sort of avoidable loss that we must stamp out of our trading game. My advice on this is never hold a player that is likely to get moved to midfield UNLESS you think they are worth their money in midfield anyway.

For others, it can be the opposite. Gnabry for example can cut it as a midfielder so the potential of being moved to forward was a positive risk that it was smart to be on the right side of. But only because he was good value anyway.

Davies also had a positive risk of moving to defence which is an easier category but the problem with that is the price – it is very likely the market is overestimating his ability. Not that I don’t think he’s good, I do, but does he deserve to be the second most expensive defender on FI? I would say not.

The theory that he will do better with Kimmich out of defence I think is vastly overstated. This is one marginal variable amongst dozens that will dictate whether Davies can win. 

Good performance players generally need to beat the whole field on most meaningful match days, not just their own team. It can benefit on single game days sure, but then the prize offered is tiny. The only time it truly benefits is in a Gold Day Champions League match or similar.


The Super Secret Bonus


Some traders were lucky enough to receive a “reset” of the existing £1,500 trading bonus via email.

This means that any net buys from 00:00:00 GMT on 25/03/20 to 23:59:59 BST on 23/04/20 will be eligible.

Basically, if you cashed out anything before the 25th March (probably quite a few of us were trimming portfolios as discussed here back then) you might not have got much use out of the bonus anyway. Now, if you have money sat in your balance or withdrawn, you have a 8.25% incentive to put that back in.

Lovely for those who got it. I did. I have no idea what the criteria are or how widespread it is and no doubt those who didn’t will be upset.

At the least though, everyone will benefit from an incentive for more people to inject cash into the market.

If you do have it, it has a long time line and it can be used anytime until 23rd April.

I don’t think it is a reason in itself to rush back into the market with any spare balance, but if we do see football on the horizon it will be one more reason to have confidence.

Corona Latest and My Three Tests

We haven’t had much concrete news on whether football will resume in May or not yet. There is some gossip of some clubs supporting cancelling this season and restarting fresh next time on “moral” grounds.

There is a case to be made that football just doesn’t matter and there are more important things in life right now. It ain’t wrong.

But. When it really comes down to it I think it is about practicalities.

I’ve boiled it down to “three tests” of what I’m looking for before I will be confident football looks back on track:

The Overall Situation 

We need to monitor Government statements and the public mood. If in a few weeks time things have levelled out and we aren’t seeing the situation get massively worse and health services getting overwhelmed, then Government’s will start getting options about what they can safely reopen.

There will be sympathy from Government about getting sport back on, it’s not frivolous or insignificant. Bored people under lockdown will eventually act up and break the rules. Entertain them and they’ll stay a bit happier and be more compliant. 

Right now I think people accept the lockdown by and large. Fast forward a few weeks and many may be going stir crazy.

But if in 2-3 weeks the situation is still getting worse and Government are worried about their ability to contain the virus – the chances of anything including sport opening up anytime soon will be slim.

And this may vary by country. We could have a situation where some leagues restart and others do not.

Is it safe for players?

We need to see a credible plan, ideally backed by the player’s representatives, for reducing the risk to players to acceptable levels. 

This probably involves compulsory testing in squads, with only players who are clear eligible to make the squad. 

Clubs probably have the money to pay for this, unless there are political problems. There has to be enough tests to go around – I doubt anyone can sustain handing out tests on mass to footballers when there still aren’t enough tests for Doctors and Nurses it would just be embarassing.

Is behind doors practical?

One of the strongest arguments against behind closed doors matches is that they eat up police and other emergency services time.

What procedures will be in place to make sure fans cannot turn up outside grounds?  How can they minimise the impact on police? And can football provide it’s own security? Or even play the matches at a secret location or something more innovative.

Whatever it is, we need to see a credible plan for this.

What's Next?

If we get good answers to all of the above, I think we can start getting confident on a season restart and that may be the time to recommit any funds in balances.

We don’t want to wait until football is 100% certain to go ahead. We want to stay ahead of the curve. But we want enough information to make an informed judgement. Timing that is tricky.

I’ll keep on top of that here and you will be the first to know when I think we have reached that point. Or not!

Right now, it’s still way too early. We definitely are in the “it’s getting worse” stage rather than anything else. This is going to be weeks not days.

It’s worth bearing in mind that losing this season is not a disaster. We can live with that. 

Having it back would be a great bonus, though.

It’s whether next season starts either on time or at least by September/October that is the main risk. 

Hopefully, by then some kind of system can be found so I don’t think we are in any immediate danger of that being called off, it’s likely that decision, if needed, would not be made for months anyway.

In the mean time, we can keep looking for good value in the market and I’ll keep the Value Hunting articles coming. Next week I’ll be covering strong performance players, wonderkids, IPD players and probably others too.

Stay healthy everyone and remember you can let me know if you are struggling financially this month – I will wave this months subscription for members of more than 1 month in financial difficulty with portfolios under £5k.

error: Right click is disabled to protect members content.
error: Alert: Copying is disabled to protect members content :)