Time for our weekly look at the market and then the new information on Offers.

Then we can resume our pacey run through the pre-season preview articles!

Market Analysis

I remember Blue Button price rises too

This is an event that used to be commonplace but we haven’t seen for a while.

Actual price rises that aren’t just spreads closing. Superb.

That massive dividend increase didn’t cause rockets straight away but as discussed in the Live Blog at the time this was perhaps expected.

What I thought we would see is those wide spreads being eaten up first and only then will people contemplate clicking that Blue Button to buy shares in the traditional way. We’re seeing that now.

Most people want to feel like they got a deal. So making a bid is always going to be preferable. 

But as I am sure you will all have noticed the same as I have this week – there is much more competition for players now and we are having to up our bids to get a match. I frequently look at some of my bids and realise someone has offered more than me and I have to adjust my bid up too. 

This is exactly how a healthy market is supposed to work. And because of that enormous dividend increase – we can still more than comfortably pay a bit more for quality players in almost all cases.

As discussed in the Live Blog – my belief is that £4-6 price tags for good performance players will become the norm and nothing particularly remarkable over the course of this season, particularly in the top 100 players.

And for those really strong performance media hybrids of which Bruno is currently the best example we could stretch to £16 eventually although we won’t want to pay more than £12 to get really great value.

So that gives us some indicator of how far prices have to rise. The dividends are there to support these prices and so it follows that prices will eventually move to match.

My best advice for Pre-season success

In recent months we’ve had so much obvious slam dunk value on the table it was borderline embarassing. Bid prices so low on high quality players you had to wonder what that seller was thinking. Nothing sensible, most like.

Lots of high quality players have enjoyed very nice rises in recent weeks. And some of that value is starting to get eaten up as people up their bids.

Yet, there is still fantastic value in many players, particularly if it is not widely known they are a strong player or if they are considered unpopular. 

Particularly in the last few days though we have also seen some of the more speculative “popular” and often weak players rise. This isn’t too surprising – this is prime time for bad players who thrive on hype. 

There isn’t any football to prove that hype wrong after all, and the good players don’t have any opportunities to steal attention without games to win.

It is fine to trade in poor quality, expensive and popular players if you want to. But you really have to pick your moments and be aware that you are playing a particular game. 

These players are likely to do well in anticipation but fail when they actually have to prove their worth in games

Not just because they are unlikely to win, although a small number of them will nick a (probably fortunate) win. But because the better players will win more often and start stealing the attention – dragging focus back to not just the winners but all players of real quality.

And, popular players tend to come with big price tags. That can be ok if they warrant it. But if they don’t have the ability to back up the price then the end result is almost certainly going to be disappointment and a price fall.

A crucial thing to remember is last pre-season. Now, I’m a big believer in not repeating formulas year after year circumstances are often different. But in this case, you can see almost all of the same factors falling into place. 

Here is what happened as a result of my last pre-season analysis where I was Positive/Neutral/Cautious on a player:

The full analysis of those pre-season to December results can be found here

In the full article you can see the list of players that make up those blocks. The shocking thing for many will be that those 56 players I was “Cautious” on were not unfamiliar niche players. They are all household names with the possible exception of Sylla and Poulsen.

These are the players who were “popular” and being pumped in pre-season last year. And they were a catastrophe. De Ligt. Vinicius Junior. Jovic. Gibbs-White. Brewster. Pogba. Moise Kean. Ousmane Dembele. Daniel James. Hudson-Odoi. Kluivert. 

On the Positive list were many unpopular players that were considered too old or unexciting including Kroos, Immobile, Alberto, Gnabry, Pavard, Lewandowski, Di Maria, Insigne, Werner, Coman, Hakan, Demirbay. These players destroyed the “popular” players when it came to actual returns.


Because my analysis exploited the mismatch between genuine quality and the baseless hype that is routinely pushed on social media and in chat groups.

If you have a popular player who is being pumped like Hudson-Odoi at £3.89 in advance of last season he just has far, far too much to do to be a success from there. He was ropey for performance as it was back then making his odds of real success low. And the weight of that price tag means expectations are very high. It’s very easy to lose that bet.

Kroos by contrast at £1.56 is one of the best performance players around and has a budget price tag. So he has a high chance of winning and expectations are low. It’s very easy to win that bet.

Now obviously the names have changed. Now people are down on Hudson-Odoi I think he’s a decent bet. Kroos is a solid choice too but we aren’t going to be seeing a 219% gain out of him again most likely.

But this principle is almost certainly going to hold true.

In my opinion, we should not hold a weak, highly priced player much beyond a couple of weeks into the season no matter how popular they may seem.

Fashion changes very quickly and what is very different from last year is the Matching Engine.

Instead of that slow bleed out for a “popular” player who gets exposed as weak over September > December that price can crash overnight. People are fickle and just 1-3 bad performances could see those bid prices tumble.

Traders who want a great start to the season absolutely must avoid this.

You can trade in hype but it must be done early and you must exit before the masses get opportunities to realise that player is not as good as they have been led to believe

(In one of the Pre-Season Preview articles this week I’ll be highlighting a host of players who are likely to struggle to live up to the hype and crumble under the weight of their price tags).

Instead, targetting value players who have higher chances of winning at this stage is much more likely to be the better play.

At the moment, we are in a lucky position where if we want to load up on “Core” players we can still find many high quality and popular players who are still value. We don’t always have to dip into that “unfashionable” end like veterans. 

The recent Core players pre-season article has many examples of popular well known strong performers at value. Popular is fine as long as the ability backs it up and the price remains value.

But we should not ignore “unfashionable” players. They are very likely to be the ones who deliver the biggest % profit and I suspect it won’t be even close.

Players like Gnabry and Depay were “unpopular” ahead of last season too. Performances changed that and now they are amongst the most in demand around.

As were Kroos and Immobile because they were considered “too old” but they ended up being pretty much the biggest profit you could possibly make over that period outside of delving into the 50p and under bargain bucket market.

On FI we generally find that players aren’t too old afterall – if they are winning.

So my pre-season golden rule is this: Never, ever get swept along with the tide on who is popular or not. Make up your own mind

Because the only way to outperform the average is to do things that very few other people are doing

We don’t want to go where everyone is going now. 

We want to position ourselves where we think many people will want to be after they sell their overhyped poor quality player and wonder where they should have put their money.

Offers Announcement

Offers, and the Matching Engine in general are a “good thing”. Probably.

Whenever you put more power in the hands of traders it gives us more opportunities to profit. But also more opportunities to make a hash of it too.

So there is an argument that this is all very complicated and some people are going to really struggle with it. I would agree with that.

The way FI used to work with that slow ratcheting up and down of prices was fairly simple to understand. It did however facilitate a pretty low IQ form of trading which for many wasn’t much better than “Oh he scored and got a big score BUY BUY BUY”. “Oh he had an awful couple of games and missed that penalty SELL”.

Not everyone of course, but the general standard of trading and analysis of players is poor. If you were good at these things you could do a lot better. But the fact is, even a low effort bad trader has likely made good money out of FI. You simply haven’t needed to be very good to convince yourself you are a profitable trader.

And many operate under that self delusion. It’s really dangerous.

I’ve long thought that FI would mature and get harder and harder, in much the same way as any early markets like crypto rocket but then struggle. 

Or how online poker was a free money party for everyone early on. But then got much more competitive and ate up all the bad players who believed they were poker Gods when they were actually average or worse.

The Matching Engine puts turbo boosters under that process of growing up. For those who cope with it well it’s a great opportunity. But for people who are stuck in the old bad habits they are going to find FI much less forgiving in future.

It’s still going to take probably a season or two to really mature into a genuinely competitive market because the dividends on offer so clearly outstrip the prices it’s still a very friendly environment. 

But the big mistakes next season are going to be much more heavily punished. And those hard lessons will cause people to either learn to be better or quit. 

Last season you could make a mistake by following popular players like De Ligt, Pogba or Moise Kean but have plenty of time to get out of it as the price slowly crumbles. And only lose 10-20% worst case (it’s worse because you’ve actually lost the chance to gain 80%+ too but that’s by the by). 

When a player collapses now they can really collapse. And it can happen overnight not over the course of weeks or months. It’s never been more important to tighten up on what we hold and never stray too far from rational value.

I am personally very optimistic about the Matching Engine though. It will undoubtedly cause some to leave in frustration. But I think it will also bring in bigger, smarter money to the market as more high net worth investors see a new appeal in FI. The value is certainly there to attract them.

We have a head start though with a lot of experience. And if you have established good trading principles all along, you’ve got much less to fear and much more to look forward to. 

The Offers Announcement

This was largely as expected although there was one particular thing that caught my eye.

If you recall from previous articles – my biggest expectation has been that whilst Offers is a good thing long term – it is likely to drop on paper portfolio values and that could cause a ruckus.

To overcome this, I thought FI might employ some kind of sleight of hand to gloss over it. 

They haven’t. Not obviously anyway. We need more details on how the “Share Issuance” will work and FI say more is on the way. 

But essentially, Blue Button prices look to be largely trader led, with a bit of topping up from FI and probably the “Market Makers” too.

So what does this mean in practice.

Some Blue Button price are almost certainly going to drop quite hard when Offers come in.

Worst affected should be unpopular players with very wide spreads.

Where we see a much higher Blue Button price than the Red Button that is likely a hangover from way back when they used to be popular. 

But trader opinion has moved on and the Red Button price will be much more reflective of what people think they are worth now.

So naturally, those Blue and Red button prices are going to close up and it will be closer to the Red than the Blue.

The Blue will naturally end up higher because the Red Button price is the bid of someone looking for the cheapest price possible. Where as the Blue Button offer price will be the seller looking for the highest price they can get away with. 

Spreads and Comfort Blankets

In general I would not expect to see these wide 25%+ spreads that we currently have in future, except where nobody is really trading in that player at all. The more liquidity (i.e the more people are trading that player) the tighter the spread should be.

A spread of 5% or less would be my guess at what becomes normal for most players in the top 200. 

Low spreads sound good and it is however two things come to mind about that:

1) Those spreads will be tighter because the Blue Button price dropped. Holders of players with wide spreads should suffer as prices correct to current opinion. That will cause some shock as it will drop on paper portfolio value. Short term pain is coming.

2)  A low spread can be seen as a bit of a comfort blanket by many. “Oh it’s ok I can always get out of this cheaply if it goes badly”. Bang wrong. This isn’t the old world where that price can only ratchet down pretty slowly. If the circumstances appear where you definitely want to sell that player quickly you can bet everyone else does too and the highest Offer is going to be a fraction of what you hoped for.

For example if a veteran player was to break a leg your 5% spread might become 50% in an hour or less. If it becomes clear that a hyped youngster is flopping that 2% spread could be 20% very quickly.

It’s so crucial to mentally adjust to that. A tight spread is not comforting.

The only real comfort blanket available is holding good players at reasonable prices not outrageously above their rational value. Players likely to win dividends will always end up in demand again eventually.

If that once hyped youth player gets farmed out to a Championship side as he wasn’t deemed good enough for the top level, or that veteran moves to China they become close to worthless. Probably forever.

The occasional unfortunate big injury or other bad luck event is always going to happen and we can’t avoid that. What we can do is risk manage with a sensible staking strategy like I described in the recent portfolio clinic article.

Where the player already has a tight spread and is popular or in demand probably very little change will be seen.

Some traders are going to need to learn this brutal reality of the Matching Engine the hard way this season. Better if we just learn it now. 

FI Involvement – The Bid Zone Floor

What is interesting to think about, and also the thing we know least about right now, is to what extent FI will tinker in this trader led market.

What may soothe some of this savage market behaviour is the Bid Zone Floor. Which will to an extent protect people from extreme sudden drops. Sort of.

This will mean that if you have a £1.99 player you can’t instantly place a savage bid for £1 hoping someone misclicks or that someone panic sells.

In the example given by FI a £1.99 player would have a floor of £1.92 – so you can’t bid lower than 7p under the Instant Sell price. This prevents highly speculative or extremely low bids.

I imagine FI have chosen the example of a popular player here – I think the floor would be much lower than that for a player who isn’t in particular demand.

So in theory this should prevent prices halving instantly due to a misfortune. But again, I think this may be a false comfort blanket.

It’s a percentage of the Instant Sell price, which is trader controlled. So as Bids are withdrawn because of the misfortune the Instant Sell price will drop and the Floor will fall further down too, possibly quite rapidly.

This may apply a small brake to a price fall. But if a price is going to fall it’s going to happen anyway. 

For example. If our £1.99 player breaks his leg and is definitely out for 12 months and collective trader opinion settles on him now being worth £1, he will still reach £1 despite the Floor. It should just happen a little more slowly than it otherwise would.

Put simply – your player is still going to fall off a cliff if he’s going to. But the Floor will be a little break that stops it happening instantly. It could still be pretty swift though, maybe hours rather than the minutes it could otherwise be.

It’s probably better thought of as a “down ramp” rather than a floor. You’ll go down gradually rather than falling off the ledge.

This is worst case scenario stuff though for those real dire events that everyone finds out about straight away. Much like Messi recently (Which is why I didn’t want to gamble on this trade as discussed last time!). 

Most of the time, we might have a player we are optimistic on but over the 2-3 matches we’ve seen in Scouting we’re actually disappointed with his early numbers. 

We should be able to get out before most of the damage is done because we are paying closer attention than most and the Floor should help slow down any exodus. 

FI Involvement – Market Makers and the “Share Issuance Curve”

The complicated sounding “Share Issuance Curve” is a fancy way of saying FI will still sell new shares.

This means that FI themselves will be placing Offers on players. And so will the Market Makers (people who are paid to put Bids and Offers on players who wouldn’t otherwise have them to keep the market going).

So whilst the market is trader led, FI and their market makers have a behind the scenes role. 

If FI are smart, and they often are, they will pump up this activity when Offers are introduced and this might be their way of ensuring any drop to on paper portfolio values isn’t too bad. All they’d have to do is pump some Offers into the market and Blue Button prices will largely be maintained in trader portfolios.

And whether people meet those Offers or not is irrelevant! It’s good for FI if anyone buys new shares from them at a higher price than people would normally pay. 

It would look odd eventually if Blue Button prices remained artificially high. If we do see Red Button and Blue Button prices staying wide apart it will almost certainly because of behind the scenes intervention from FI.

They couldn’t sustain this forever – it will look like a broken market. But in order to avoid an initial shock it might be a good idea. And then they’d gradually reduce those offers over time so it’s not quite so shocking.

It’s my conspiracy theory but it’s a credible one and I don’t think you need a tin foil hat for it. Adam Cole will be well aware of the potential impact of dropping on paper portfolio values. 

Yet doing anything obvious to cover it up could have backfired. If traders felt FI were being misleading about portfolio values it could cause a social media storm (Which is vaguely amusing because FI have been painting portfolio values in the best possible light since the start!) 

So a behind the scenes role in pumping up Blue Button prices a little? The only really credible option for a savvy businessman if you ask me.


Whew. Heavy topics for a Monday morning.

This looks like one of the most complicated FI announcements as there are lots of numbers but it really isn’t that difficult when you think about what we should actually do about it.

Here are my two main takeaways from all this.

1) We may see an on paper drop in portfolio values when Offers are introduced. The absolute best thing we can do is ignore it and not get upset by it. 

Anyone rational already knew that our players weren’t really worth what the portfolio top line said – they were only worth what we could sell them for. The portfolio lied to us before. It’s going to be more honest. But the truth can hurt.

Ignore any moaners who complain. And they probably will. This is a self defeating attitude I associate with bad traders. 

The important thing is that the real value is clearly there in this market after this whopping dividend increase (which is almost definitely there to butter us up to get over the introduction of Offers). 

The prices we see now are going to look quaint compared to where they are in 6 months time. Of that I am near certain, barring any general FI wide disaster. What is more uncertain is exactly which players will do the best. 

That’s hard but with the amount of Scouting and research I do if I get that wrong it won’t be for lack of effort. All we can do is put the odds on our side.

2) Going back to the original topic – it’s crucial right now to maintain a focus on real quality and value and not be seduced by social media into following others into “popular” players. 

As per last season – it is these overpriced poor quality players who seem bulletproof now that are much more likely to flop. We can’t be caught in that if we want the best results. 

When those players flop people will want to put that money somewhere. And by then, they will be seeing the winners from actual games. And people will want those winners, and players who look like winners.

The objective remains signing up the players most likely to win and the best possible prices who tick the most trend boxes from Key Strategy. 

That gives us the best chance of success. Though it will require a lot of close attention in early season to refine those choices down to the very best.

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