The first thing I looked at this morning is whether these drops are evenly distributed across all players or whether we can find patterns – are some types of player taking bigger hits than others?

The answer is yes. Whilst in a panic of this scale all players can be expected to take a hit, the worst of it is falling on the over hyped and over priced end of the market. Many of the better quality players that I’d generally consider the smarter traders out there would be holding are doing relatively well.

There are a few exceptions on either side of course.

To determine this I looked at my recent Pre-Season preview article series as this provides a recent categorisation of players into groups as I see it.

The “Core” Selections – the 28 players I considered to be solid holds for the season ahead have taken an average on paper loss of 10.3% off their Blue Button price over the last 7 days. (Obviously, many of these were picked up on bids for well under the old Blue Button price!) 

The 26 “Challengers” – those I think have the potential to really break through but have some kind of obstacle like rotation or a new club to settle in – a loss of 12.18% over 7 days.

But, the 41 players I considered to be overhyped/overpriced in the Big Hype/Little Substance series? An average loss of 18.34% – significantly more.

These are dirty numbers as for example Depay is in the “Core” list and has taken a big drop – but that is as much to do with negativity about a Barcelona move as the general trend. 

But the logic holds when you look at the players individually. 

If I pick out some players I’d consider to be “smart money” picks – i.e players that aren’t obvious trend fits but have performance quality that hasn’t been fully revealed and a good price – the picture is pretty solid. 

Insigne – just a 1% drop. Alberto. Less than 1%. Immobile 9%. Neuer a 4.27 rise. Hakan – 1.86% drop. Kramaric, less than 1% drop. Goretzka 2.3% drop. Marquinhos 2.6% drop. Cancelo 4.2% drop. 

All very modest and it is just my opinion but I’d generally say it is the smarter, calmer traders who are holding this sort of player because they are mainly hype free and are relying on underlying quality. That could be a reason why these holders aren’t panic selling them extensively – they believe in the value and have solid reasons to do so.

You can also find players in the Core or Challengers group who are not doing well. Kroos – a -22% drop. Brandt – a 33% drop! Dybala – a 21% drop. Griezmann – 27% drop. Parejo 18% drop. Eriksen – 19% drop. De Beek – 29% drop.

Age is clearly a big factor there – in a panic – age is something people will worry about so that makes sense. And then Eriksen/Brandt both have a lot to prove at their respective clubs. De Beek may be vulnerable after a recent surge and he is also unproven at United which will make people nervous.

Some valid reasons for concern there – but the question for traders is – are people being overly negative versus the price?

It’s also notable that the premium players are being savaged.

In the last State of the Market I mused that in all the uncertainty of the introduction of Order Books people may cluster into well known and popular (but not necessarily high quality!) selections. 

People often see the Sancho’s, Greenwood’s, Cherki’s, Neymar’s, Bruno’s or Bellingham’s as “safe havens” – something to go to when you aren’t sure what else to do. The theory being that they are so popular and “on trend” they are solid bets.

That musing has proven wrong, or at least covered up by bigger factors.

They have all done fairly badly – and with little distinction between those who justify their price and those who have a long way to go to prove it. Bruno and Neymar have been slammed just the same as Greenwood, Sancho or TAA. 

In something like Sancho, Greenwood or TAA there is going to be a lot of dumb money who never really understood the quality or value of those players – they were just going along with the price rise. You might have legitimate reasons to think money in these players is “smart” and fair enough – but it’s undeniable that lots of people are just following along with the price rise.

These are the sorts of traders who are going to be most bewildered by these drops and could be prone to panic because they don’t really have much basis for holding other than “but they kept rising in price before”. 

Equally, there will also be plenty of dumb money in a Bruno or a Neymar even though these premiums have shown they are at a rational value – you need all ends of the market to be co-operating to get to prices like that.

So even though Bruno and Neymar pretty clearly justify their value in this dividend structure, it doesn’t mean all the holders know that. 

And it’s not a surprise that these players aren’t going to be immune the same way someone like Hakan or Insigne have been so far. 

If you hold those two players the chances are you have at least some basic understanding of quality and value so it’s logical these players are holding up much better.