This is being run Live Blog style, so start from the bottom and work upwards!
And that’s about all I have to say after a good but fairly straight forward announcement.
Final thought – Bundesliga players are still flying. This has been foreseeable since well before an hour ago and has been a mini trend for a while.
You were either there already, or you weren’t.
I would emphasise that as this point it’s not a good idea to chase it – look elsewhere to the other leagues where plenty of value is there to be found.
I’ve listed a lot recently – with a current focus on the youngsters. But we should not get too obsessed by youth! As I mentioned this morning, a lot of great value is in the Core Performance and 24-29 age range and you can look back to the still very recent Value Hunting articles for good examples of those.
Take care, and thanks for joining me for another Live Blog!
Outside of the market and announcements themselves, the most interesting thing was a promise of “very exciting developments in the pipeline .. in the coming weeks”.
This sounds like some of the technical/product improvements we’ve been expecting.
NASDAQ and Order Books which could be a way out of the spreads lockdown as traders will be able to fulfil a lot of that function by setting their own prices. This is complicated – I have a seperate Guide on this if you check the main home page.
The Media Review which is on-going. This could tinker with the key phrases that trigger a player earning media points. I don’t pay a great deal of attention to this but no doubt the system is currently crude and it can be better.
The main point about this though as I’ve said in Key Strategy is that if as expected foreign news outlets start generating media points this is straight up BAD for EPL players and GOOD for foreign league players.
Some of the premium we pay for EPL players will evaporate eventually and high profile players in foreign leagues will become more valuable.
More on this in Key Strategy – but it’s good to be on the right side of this and make sure our portfolios aren’t too EPL heavy.
We could also get performance scoring tweaks. I say tweaks not changes because I only expect a few, if any this time around. I’m assuming that FI don’t want to throw hand grenades into the market right now unless they really have to. And they don’t have to. The scoring system is ok.
And we may hear about a dividend review, and potential increase later on. But, times are tough, we don’t really need a dividend increase quite yet, and I’ll not be disappointed if this does not happen in the Summer as previously planned. It’s in my “nice to have” column. If it did happen it would supercharge the strong dividend returning players I favour.
As for next actions I think it’s a case of offloading to market any transfer trades that worry us.
For new investments I’d prioritise a solid core of performance players (Value Hunting article – Core Performance 1 + 2 for examples).
Once you have that, strong younger players with some genuine prospects and chances of first team action are a good bet (Real Wonderkids and Good Youngsters 1 + 2 for examples).
And I’d also be looking at the Elite Veteran end, bias towards 27-29 year olds. 30+ can be risked where this is value but just be aware that if football doesn’t come back for some time they might struggle.
I’m happy with an early boost for performance here which fits my strategy to stay with it and build those positions rather than get too side tracked by media in recent weeks.
It’s interesting how the social media narrative can shift so quickly, and this push towards performance could really gain momentum now provided we keep getting good news from the Bundesliga and other leagues.
It might also completely fall over if the Bundesliga start games but then have to stop for any reason. But again, part of Key Strategy was anticipating that and treating any early restart as a bonus. It’s only if football isn’t back by August or September that I foresee my approach running into major issues.
Not that I’ve abandoned media altogether, there is still a good chunk of premium players and transfer holds of high quality players and the 5 days of media is good for those too.
As I said this morning there are only so many buttons FI can push so if you cover them and make sure you own genuine quality players you won’t have to try too hard to predict the announcement specifics.
It’s also worth bearing in mind that whilst the FI market and social media narrative can go a bit crazy at times, particularly when there is no football on, events and FI announcements will always drag the attention back to the real win mechanics of the game at various points.
Dividends are like gravity.
This is why traders who own players who have genuine dividend prospects tend to be “lucky”.
This is a fairly ideal situation to be in after an announcement where you don’t have to do much but watch other people buy players you already have.
We won’t catch them all of course. It’s a bit like pre-season where lots of players rise based on speculation and it takes a good 5-10 games for people to figure out who is actually good again. So there are some weak players rising amongst the good, but mostly good I have to say.
And even when you know a player is good, you can’t own everyone, somewhere between 20-50 players does the job and for me 30-40 is the ideal range. So it’s also normal to look at the rises list and say “Dammnit. I almost bought him”.
This doesn’t matter as long as overall you are doing ok.
And, we shouldn’t judge success based on what is rising right now, either. This week it is Bundesliga but by next week we may have good news in another league and it could be Serie A or the EPL or anywhere.
So, I would certainly not feel the need to chase Bundesliga players. Instead, I’d look for the value in other leagues if our Bundesliga targets have already risen significantly. Chances are, if the Bundesliga set a good example then other leagues will be able to copy the formula.
In fact looking at the current rises there is already a huge bias towards Bundesliga players here. That’s going to be good for anyone who already has a decent selection of good performance players. Particularly if like me you have a Bayern Munich fetish (for purely statistical reasons ahem).
Ideally, for a Key Strategy user or someone doing something similar, I’d expect them to have this covered already and not feel like they had to chase this now.
Media players have had a good run but as discussed this morning I am getting more wary on that.
The more traders become confident that football will restart the quicker the penny will drop that a long potential run of Bronze and Silver match days will seriously eat into media and transfer related trades.
Practically – every Match Day means one less Media Day. And, football going on will distract from the usual Summer of transfer gossip.
That’s why I’ve been keen in Key Strategy to start moving on from this area and cashing in those profits.
Not all transfer trades, of course. But specifically where they have been driven to a high price based on one hoped for transfer, and they really struggle to justify that price in the longer term, that’s where I would be worried.
If I have a player with a transfer upside but I’m fine to hold him at his current club at the price i.e Fekir or Leon Bailey or Aouar we don’t need to sweat quite so much.
That was pretty much as expected. If you were hoping for immediate fireworks you might be disappointed but this is a solid announcement.
The extension of 5 places media was widely expected, that’s all good. The interesting one is the “Moving the Gold Posts” which is a smart move and covers something I mentioned this morning.
If we do see just a handful of games going ahead each day, Bronze days aren’t all that great so it may not be a powerful incentive. But now we only need 4 games rather than 5 for a Silver day, that’s a nice boost to performance players.
For traders who weren’t quite ready to dip into performance yet – this might offer some reassurance and we might see people going towards players where the leagues look like restarting soon, the Bundesliga in particular right now.
That’s all my thoughts this morning. I’m going to take a break for lunch now and keep a beady eye out for the announcement, which often come around 4pm recently.
As soon as that drops I’ll digest it and share my thoughts here as soon as I have something worth saying!
We may also find ourselves with some spare cash to invest today, if we want to take advantage of the bonus. Or tomorrow, when we get our bonus cash.
The decisions from Key Strategy are still there. I think it’s good to have a nice balance between performance, some transfers (generally where they have value beyond just the transfer, ideally if they move or not), a few premiums and some long term youth.
Whenever I talk to someone about this you almost always hear the same thing.
“I’ll just put this money into some youth players”.
This feels comfortable. Familiar. Easy. It goes with the seeming flow of social media and recent market movements.
To an extent we want to do this yes – I’ve made this a chunk of a Key Strategy portfolio and I havent’ spent the last week or two focusing on finding good youngsters for no reason.
We shouldn’t be fooled by this. Just because youth has done well in recent months and veterans have done badly does not mean it will be exactly the same in the coming months ahead. These things trade places often.
The incentives in play are about to get very, very different if we do see football returning which is starting to look more likely.
As I mentioned in Key Strategy this could be a completely unique situation that we will probably never see again where we have such a long period of uninterrupted football ahead of us as one season flows straight into the next.
If this happens, it follows that the better performance players will benefit heavily and players in that 26-31 age range will become significantly more desirable either when that trend takes hold generally or certainly when they start posting big scores.
We want to make sure when building portfolios that we have not ignored this and are not too heavy on youth.
Many traders, I think, are setting themselves up to fall into the exact same trap they fell into multiple times last year. We go through these periods, particularly in the absence of football, where youth is pumped and pumped and pumped on social media.
This feeds into the market until older players have fallen heavily and youngsters are saturated.
Good quality older players are made fun of on social media by those who want to drive people towards youth pumps.
Until they aren’t.
Most of the best returners are older, which is obvious as they are established and at the peak of their careers.
At a moment like this, when many are available so cheaply, and there is the prospect of so much football ahead for them that elite veteran nobody wants to buy at the moment offers the best value around right now and the best potential profits if you believe football is on the way back.
The risk is that football does not come back. To get confident investing in quality older players what traders want to see is a long football calendar ahead (which is why we saw quality older players boom in August to November but then decline as end of season sell off fear approached).
We have recent experience of this. The most profitable players in early season were the veterans and it wasn’t even close. And it was in a similar situation back then where all 90% of social media or chat groups were interested in was teenagers and were adverse to older players.
Spotting this logic gap and ignoring the chatter is why I made so much money in that period and the majority had to race to catch up with me when those 25-31 year old elite players became the next hot property.
And those traders who took social media too seriously generally had to Instant Sell the youth pumps to do it, causing a bonfire of younger players at that time.
Most social media accounts or chat groups will you what happened last week not what is coming. In October there would be plenty who had done nothing but pump youth for months suddenly declare “performance was now the best strategy” approximately 7 light years too late.
It was exactly the same with the Share Split in early 2019 – all most wanted was 10,000 Neymar’s on Share Split day but again this was wrong. We must not let social media consensus trap us because if we follow the pack we will inevitably end up with bang average results.
This doesn’t mean I don’t buy youth heavily, I do and it’s in Key Strategy for a reason. 25% or even 35% of the portfolio in high potential youth isn’t too much provided they are have real potential.
But the main takeaway here is that we do not want to skimp on core performance players and Elite Veterans as a major part of our portfolio.
I mentioned in Key Strategy that I had a 5% balance I was planning on dropping into Elite Veterans as soon as I get really confident football is back. I’m seriously tempted but staying patient. They aren’t rising yet in the main so there is no need to rush. (Bear in mind, I’ll still be holding plenty of 24-30 year old players as they suit either Core Performance or Elite Veteran categories of my total portfolio, this 5% is additional).
Having a bit of flexibility is no bad thing, who knows, FI may do something unexpected later and it might come in handy.
If you want to go for Elite Veterans I think it is fine to do so now but I would feel much more comfortable in the 27-29 age range at this stage. Maybe someone like Eriksen.
There are some incredible value players at 30+ right now but it might be asking for trouble since they will struggle if the football calendar falls apart again.
There is an important point on an extension of 5 Places of Media that we need to be bear in mind though.
The obvious thing to do would be to charge into more media players if that’s the case. I’m sure many will. But that’s a trap.
Back in the real world of football things are looking, currently, very optimistic for the return of football particularly in the Bundesliga. They’ve got some really detailed plans in place that look credible, they’ve got the support of Government, and they may be back in early May.
That’s pretty incredible and sooner than anyone would have thought a short time ago.
If we just have 1 league trundling along for a while what does this do to payouts? Those currently relentless 5 places of media will be constantly interrupted by single and double match days most likely.
Depending on how the Bundesliga cut it, this could feasibly be every day if they run 3-4 matches a day or every couple of days.
If we see an odd schedule over May to July with a handful of games every day or couple of days this will massacre media payouts.
Once people realise that it could be very bad news for media premiums and ropey transfer trades.
If FI do something clever it might be managing this – keeping 3 places of media going throughout single match days or something like that. That’s what I’d do. It’s better than 5 places of media that may end up being a white elephant because there might not be that many media days all Summer.
This has big implications for transfer trading, since only the really big stories will actually get any consistent media dividends.
This is why in Key Strategy I have encouraged cashing in on some transfer holds where they reach high prices AND crucically why I think it is critical that the majority of our transfer holds have real, long term dividend potential at a variety of different clubs. I am strongly avoiding players who are all about the short term transfer with little long term justification for their price.
This risk is also why being too heavily into media holds that are overly dependant on short term hype is a bad idea.
Normally, we could probably get away with “ah, I’ll just dip into media here for the next couple of weeks and then go back to performance”. But these aren’t normal times.
Combined with the heavy spreads and Instant Sell lockdown you cannot change direction once you are committed.
The only hope you have with these one trick pony transfer trades is to be selling them when others are still willing to buy.
These can feel great when they are cruising and pulling in regular media dividends BUT as soon as bad news hits, or the transfer actually happens, many could want out and you are stuck with a heavy bag.
It might not drop straight away because nobody can sell but you will be stuck there and unable to react to any new events or trends.
If there is a renewed push towards media or transfers later today I will be taking the opportunity to market sell any remaining players that are too reliant on a specific transfer and I’ll already have them in the sell queue so I can take profit on them.
So, with Key Strategy currently having a nice balance between performance, premium media and transfer media we’re pretty well covered for whatever FI can realistically do with any announcement without having to do anything special.
We’ve just had a bonus so I don’t expect another but if there is one the type of players who have been doing well recently, which as covered in last State of the Market tends to be 20-24 year olds with better prospects of first team action than some of the younger players.
This is an interesting development to be aware of as the assumption is often that younger is better. Not in reality though because teenagers can take a long time to breakthrough. And traders seem to be aware of this on some level and going for more solid picks in uncertain times.
They aren’t always getting it right. A lot of those 20-24 year olds rising and in and around the first team are still garbage. But the intent is there and if we can find the good ones (lots of examples in the recent articles) we can take advantage of this trend AND buy real quality which will be important later when they start racking up big scores and the bad ones don’t.
If there is any kind of general cash bonus I’d expect this type of player to keep doing well, and for the short term as well the regular media winners of recent weeks.
When it comes to announcements, FI only really have 4 buttons to push. There are established win mechanics to the game and this is one reason why I say sticking close to them is generally a good idea.
It usually makes us “lucky” when FI do something.
3 of the buttons are dividend related. They have are performance dividends, media dividends, or in play dividends. That’s it. Whatever FI do with these incentives will benefit players who actually win dividends or at least score performance or media points which is just one reason why owning players of genuine FI quality is better than not.
There are always periods when the market goes silly and lots of social media likely lads will be saying “dividends don’t matter”. But eventually, something will happen that drags people back to the real win mechanics of the game. This has happened time and time again in recent years whether that’s a dividend increase, 5 places of media or even performance scoring changes.
There is a 4th button FI can push. This is a general cash bonus to stimulate spending. This generally has the effect of supercharging whatever the current trends in the market are. And the buying tends to start with the most obvious, big ticket players and then work it’s way down to the mid price and lower price brackets in the hours and day’s afterwards.
Another factor here is that whilst everything still looks very optimistic, we are still in the middle of the greatest crisis football has faced in decades. The situation remains very changable.
Let’s say the Bundesliga starts up again in May but has some kind of disaster – that could be curtains for the season across Europe as it will be a test case.
As per Key Strategy – we don’t want a knee jerk portfolio that is overly influenced by bonuses and short term events right now. We want a solid, well balanced portfolio that should perform well in a wide range of scenarios.
So, we don’t want to do anything outrageous just to prepare for this one announcement. The steps taken in Key Strategy are all the preparation we need and I’ll explain why.
Good morning all and welcome to the latest Live Blog. I’ll be keeping this open today as we wait to hear FI’s next announcement.
The general expectation as most probably know is that the 5 places of media is continued. After all, in the original announcement of that they said they would take a decision on that in “week commencing 24th April” which is probably a mistype unless Adam Cole operates on a different calendar to the rest of us.
But it does mean this week.
This is very likely but we may also get some rabbits from the hat. Maybe not though, I think one thing we traders are guilty of is having too high expectations for these things. It can be a bit FI’s fault for hyping it sometimes of course.
But they haven’t overdone it this time. Which could mean it’s a low key event or they have learned from mistakes and are now sensibly under promising and over delivering.
I haven’t spent too much time trying to guess exactly what it is because in this case, it’s not easily predictable like the last media announcement was a month ago.
In the last Live Blog before 5 places of media, I predicted a media heavy announcement because in truth that was the only route open to FI. It was sensible to make bets on that in advance rather than waiting because there was realistically only one thing they could do.
Not so now. We may be expecting media but things are currently looking optimistic for a return to football in the coming months. That gives them the opportunity to promise something on performance too. So whilst I expect it to be media centric, there are other options on the table this time.