The pre-season preview continues! If you haven’t already I’d start with Part 1 which sets out my thinking on strategy for pre-season.
For everyone else, let’s get straight into some players!
Today let’s look at the real big hitters of FI.
It’s a tricky category and primarily I am talking about the top 10 most expensive players.
The sheer popularity of such players usually makes real value very difficult to find. And it’s also a total circus on social media with people pushing (or trashing!) whichever premium is having their moment in the sun that week.
My guiding philosophy on premiums is that the biggest profits are available only before the period of hype and if you missed it you will never be able to turn back time by charging in late to them on the upswing.
If you want them, you get them before everyone knows about them (i.e Bruno early season) or you pick them up when they are out of fashion and on a bit of a dip.
The key thing is to avoid being that awkward “fan” of the player who always feels like they have to defend them no matter the price or circumstance. And just as bad is having it in for a player and never considering them even if something has changed. In trading it’s not about being a fan of the player or not – it’s about timing.
And Sancho would be a great example of that this season. If we go back through the Scouting archive in a nutshell my positions have been: Early season 19/20 – Sancho bad. January 2021: Sancho good. April onwards: Sancho bad.
Which largely correlates with avoiding the stagnation and locking in the bulk of the profit. I’ve never been a fan or an enemy of Sancho – it’s about not getting attached and picking our moments.
Overall premiums can be a distraction because the chances of them delivering the best profits once they have already hit premium status is almost nil. Yet too much time is spent worrying about them.
Outside of any periods of hype I only hold a small number of premiums who are clearly worth their money. And that usually means reliable performance and media dividends. There are not many of those. It’s like premium shopping – if you are paying top dollar you want a Gucci brand not a knock off that looks a bit like one.
One common mistake in portfolios is making premiums too great a percentage of the portfolio value. They have a way of eating up a lot of cash particularly if people use the common approach of having the same number of shares in each player.
This naturally concentrates funds in the most expensive and popular picks. This is bad if you are good at selecting value players.
For very large portfolio holders in the 150k+ range they tend to hold a lot of them leading to large dividend screenshots and some impressive looking gains but in percentage terms they have likely underperformed versus the market certainly outside of any periods of hype for that player.
So it’s just important we don’t get over fixated on them. In Key Strategy I recommend 1-3 premiums at around 10% total portfolio value, and I’d certainly never go beyond 20%.
However, all this said, they do particularly benefit from a dividend increase (in some cases, not all actually have credible chances of dividends!) so it is worth re-evaluating them now.
We might as well start top to bottom with the top 10. Which probably means the article will start glum but get a bit more upbeat later on!
As above, I didn’t want to hold Sancho as the transfer window actually approached because when hype reaches that level and he is already £13+ you have a major problem.
It’s the probability of success. Which gets lower the more and more things you need to happen and then lower still the higher the price gets.
Let’s think of what needs to happen for Sancho to be a genuine success from £13:
– A whopping dividend increase that gives him any kind of hope of justifying the price. We did get one, but only at the second time of asking and it was far from a sure thing. Good luck for holders.
– A move to Manchester United. Sad trombone. Bad luck for holders.
– Settle well at Manchester United and establish in the first team. Pretty likely if he went. But any player can flop it happens all the time.
– Improve for performance scoring considerably whilst moving to a generally worse performance team than Dortmund (Manchester United) in a tougher league. Highly questionable.
– Continue being a media darling beyond the transfer and when the new and exciting shine has worn off. Possible. But lots of leading England players don’t set the world alight for media like Rashford, Kane, Sterling. There is no particular reason why Sancho would differ once the transfer/settling at United story has run it’s course.
As a bald comparison. Hakan Calhanoglu by mid-July post confirmation of the Coach staying and after his good performances could still be picked up for £1.75~ or even cheaper on the bid most likely. And what do I need him to do to justify £1.75?
– Continue playing as he does for his existing club.
That’s it. It’s not a guarantee. But it’s not a lot to ask. And if he doesn’t pick up where he left off, I’ll probably be amongst the first to notice in Scouting.
The probability of success is so much higher here purely because I need fewer positive events to go my way and I’m starting at a much lower price.
Where as a player like Sancho by April has this huge check list of things we need to happen and chances are one of those things will go wrong. And if they do – it will go wrong very publicly with lots of people lining up ready to say “I told you so.” which will draw attention to the misfortune and crash the price faster.
As it happens – it was the transfer (or so it seems at the moment).
When you start talking about highly theoretical £30+ valuations with the certainty we see on social media it just makes me sad that adults can really believe this. It’s not that it can’t happen. It’s just that a lot has to go right to make it happen and I would mistrust anyone who tries to make it out as a sure thing. It is not.
So there is the cautionary tale on why piling into expensive players late is a bad idea especially when they have a lot of uncertainty ahead. Of course, the transfer could have happened but then we’d still be onto danger period two which is he has to actually start justifying that price at United. That’s a daunting task and one I’d be unlikely to throw my lot in with.
In a way, the transfer falling over might just be the best thing holders could have wished for. He can live on another season of speculation and won’t have to prove he can cut it at Manchester United for now.
So. Assuming he doesn’t move and assuming the price keeps creeping down from the £15 high to the £13.57 bid today you might again pick a moment a few weeks or a month from now where you could rationally say:
“Ok. We’ve now had our big dividend increase. The price has dipped. Lots of people who were going to panic sell probably did already. He won’t have to go to Manchester United and prove anything until later. He’ll almost definitely get more transfer speculation later and that could drag out. Something about England and the Euros.”
At a lower price, and with lots of those “things we need to happen” kicked into the long grass – we may be able to go back to Sancho.
But I wouldn’t say it’s a priority for right now. There is just so much better value available.
This is one of the player’s who was the most desperate for a huge dividend increase. He really, really needed it if he was ever to justify anything like this price.
I actually think that even after the increase £10+ for any defender is a huge stretch. Which shows how far beyond a rational value he was under the old structure.
Bear in mind I do rate him at the only defender who gets that elite ranking in my player ratings. But is there any possible reason why he is worth that much more than other good defenders who can be picked up around £1.50 to £3? No.
If he wasn’t young and English there is no way it would happen. That’s not logical because the media angle here is overstated. He should pick up occasional stories but we all know in our heart that the media almost always discuss goalscorers and that’s pretty much it. Not defenders or other unsung heroes.
In terms of potential outcomes he can either continue his level from last season or get a bit better in which case a holder might make a modest yet unspectacular profit.
Or he might go off the boil and that huge price tag will start to come under severe pressure and scrutiny.
I just can’t think of a single possible reason I’d ever make that bet now given there are so many other players available with huge upsides and small downsides.
Ok finally something to be positive about in the premium bracket.
And this one is real simple.
There is very little of the “will he / won’t he” speculation stuff required here. He can do everything he needs to do at PSG playing his usual level.
He may transfer but realistically he’ll only be going to a top club where he can continue doing his thing. I’d consider that a positive for the accompanying media. But staying at PSG is fine so it’s not something to over worry about.
As per the Ligue 1 preview – I think a lot of people aren’t quite aware of how strong his usual level for performance is given Ligue 1 has been absent and he has been injured a lot too. But the more games we see the more people are likely to realise.
But assuming he stays fit, which is really the only worry, he should more than justify this £10.34 Blue Button price especially under the new dividend structure.
I would comfortably be willing to pay this price if I wanted to add him as a premium. Shaving a bit off for age I would think it not unreasonable for him to carry £12+ whilst returning hefty dividends.
Amazing player. But the harsh reality is he just isn’t as good for FI as many people want him to be.
My concern is that he will never get an easier stage than Ligue 1 so whilst he will inevitably improve he will also face tougher opposition if he gets a long awaited big move to La Liga or the EPL.
I think the price bump he got over Apr > July based on fruitless transfer speculation is just a bit much for him to really carry. Even after the dividend increase.
The psychological problem we have in play here is that people have priced him on the assumption that he is one of the best players for FI because he is one of the best young prospects in reality. But they are different things.
So, even if holders end up on the winning side and Mbappé does become one of FI’s best players… they’ve only paid a reasonable price for a good player.
If however nothing changes and he continues to be good in reality but average on FI… they’ve overpaid.
So the outcomes are either mildly good, mediocre or terrible. And when you are making the choice between that and some of the other prospects that have huge upsides and soft downsides I wonder why you would.
Still. He’s Mbappé and belief in such players is die hard for many so I don’t expect him to do terribly anytime soon.
A similar trade to Neymar, I think these two are the most reliable options in the top 10 bracket by a long way which is a consistent position I’ve had for a while now.
Unlike many of them who need a lot of events to go just right, Bruno just has to turn up and pick up where he left off so it’s a much more reasonable thing to ask for.
That makes it fairly straightforward. Holders will want to watch him carefully through Scouting etc for any signs of decline. No more than anyone else – but big price tags do come with pressure and as these trades are in the spotlight any bad news will be quickly reacted to.
Where as for example with a Serie A player we have a higher chance of noticing before many others do that something is going wrong if we pay attention.
But if he justified this price (or near enough) under the old dividend structure, he certainly does now.
Being that bit younger than Neymar I think he can push higher and for a 25 and under media/performance powerhouse £16 would be a rational upper limit with £12 really good value.
There is certainly a lot of wiggle room between there and the current £9.18 bid so I’d be very happy to add him as a premium option at that price.
I gave my views on this in the Live Blog but they have moved on a bit.
He was £6.72 then and I said it wasn’t the trade for me but if anything a short term trade would be the play to take advantage of the hype.
The best time to hold something like this is that initial period where it’s unlikely anything really gets resolved. At the Live Blog last week we were probably still in that period.
But now we are in a danger zone where we could get breaking news that he’s staying at Barcelona and that is going to be devastating at this point.
Of course you can also get breaking news he is moving to City. Which is a jackpot.
But it’s just a gamble and the only reason to use FI rather than the bookie is that you can stack the odds in your favour.
I would say by now with the price rise to £7.50+ and the timeline a bit further on the decision is easier.
For me it would just be a straight up cash out if holding to dodge that potential risk.
And really, if the news is 100% confirmed he is going to City where he will effectively just print money certainly for media I would say it is worth just hitting that Blue Button at anything under £9.
So I’d rather wait for that and miss any potential rise than risk it going wrong and being stuck in a 33 year old £7.50+ player under the Matching Engine. That is a scary thought.
And it’s not like we have a shortage of other targets to go at so piling up these kinds of risks just seems… not smart.
A hype kid but not a no hoper. His numbers do look pretty good. Better actually than his soft FI scoring record might have you believe.
He is likely to continue being rotated though and that makes it very difficult for him to really live up to the price. Though he is doing much better than anyone could have hoped at just 18 to get this many minutes.
I was 50/50 on him at £5-6 but his good performances in July really sent this into a place that is hard to rationalise at £9.90+.
The dividend increase bails that out a bit. But for a developing player who is unlikely to bringing home hatfuls of dividends in the here and now I think it just gives him too much to do.
Because he has genuine FI suitability potentially it’s far from the worst hype pick you can go for. But I think the price is just too high and there are just so many better targets available.
It’s a no from me but I can see why some would go for it.
Unlike Greenwood above, Haaland’s potential FI suitability for performance scoring is very limited.
He’s a strong goal scorer but without a drastic change in style of play he will only ever trouble the FI scoring on quiet match days or on days he gets a hatrick. And there is no reason why a coach would change his style – it works fine in reality!
Early on he thrived on “He scored again! Buy buy buy!” but that won’t be news anymore. He’ll need real dividend wins. Something that is very, very difficult to achieve with his kind of numbers.
When paying £7+ it’s like backing the outside 30/1 horse but you only get a 3/1 payout as if you are backing a favourite.
If you think he will transfer to the EPL next season there might be something in that for the media. But that’s something I’d not expect until next Summer at the very earliest and might consider going in closer to the time for the build up for that.
Outside of that you are relying on people buying a £7+ player just for IPD goals. Or landing on an unlikely performance win. And if he keeps playing and delivering consistent poor scores people might tire of it and move onto a more exciting youngster.
Does the match day dividend increase help? Well. Not really. Brutally, winning double doesn’t mean that much when you still aren’t likely to win. And an increase drags attention away from players who live on hype and towards those who do win dividends.
It really is the sort of player I’d just avoid like the plague at this price. You either get a player like this early or you don’t in my opinion.
Foden is one of the most promising youngsters on FI and has a near perfect trend profile. I’ve liked him for a long long time. But the price at the time of the last review (£6.78) felt like a lot to pay.
With the dividend increase though it gets a lot better.
You would expect him to get more minutes next season. There is an awkwardness in that holders want him in the middle rather than on the wing. But at this stage of career I’d say any minutes are good minutes and he has clear FI suitability.
I don’t think he is the best value around. He’s far too popular for that to ever be true.
But if you are looking for a genuinely FI suitable talent with a great trend profile who has a real shot of being a deserved top 10 FI player for years to come… there really aren’t many better.
£6.96 on the bid or near enough is good value with a long term view in mind.
Rashford has definitely improved this season in FI terms.
I’d have been borderline on this before the dividend increase but now we have it things improve markedly.
A bit like Sterling I mentioned the other day – he’s a solid player still just 22 with his best years ahead. Has that fabled “young and English” vibe that is alledgedly so important. The oddest thing is if he was 18 and just breaking through he’d probably be 30-40% more expensive! FI logic in action.
He might not be the shinest thing in the shop window right now but it’s difficult to believe he won’t come back into fashion again.
So, if you want a well known player like this in your portfolio as a solid premium hold, you have to make sure you are getting them on a downswing.
With his occasional performance wins and steady media I think he’s a solid pick and is comfortable value for a premium at this £6.19 bid or anything close.