The Eric Dier paradox, or why average players are booming on the index
If I was to take to Twitter to tell the FI world about an international midfield player, 25 years old, playing CL football, at a big club in a PB league and with a chance of making it to next summer's Euros, at just 40p on the index, there would surely be a huge clamour asking me to reveal who this mystery player was so everyone could jump on before the inevitable boom in his price.
That player however, is Eric Dier, and traders won't touch with him a bargepole - and with very good reason. In FI terms he is close to worthless - a garbage hold.
I feel however that at present we are seeing an absolute boom in Eric Dier-type players on the index - players who have no underlying value and are highly unlikely to win even a single dividend in their career. The thing that I feel most of these players have in their favour is this - most traders have probably never watched them play.
Take a 40p midfielder from Ligue 1 with Dier's credentials, or someone from a middling La Liga club, and watch him fly.
Now this is not a pump for Dier - the opposite in fact. It is me trying to make sense of why there is so much dross on the index absolutely flying at the moment. The only conclusion I can reach is that many of these trades are on players that hardly any traders have ever watched play.
The power of Twitter lets us pump any player by highlighting these facts about them - their upcoming fixtures, their international credentials, their PB league status - but are traders stopping to consider whether these players actually have any underlying value on FI?
My guess is that it's a case of "as long as the price is going up I don't care whether they're ever going to win any divs". This is a pretty dangerous place to be heading though.
Does anyone else have any thoughts on this? Maybe an Eric Dier boom is actually right around the corner and traders are just waiting to pounce on this once in a lifetime opportunity?
Compare him to Henderson, there's a 10p gap to be had.
Both stand a chance at MB...small chance. Both could score a winner in a boring 1-0...small chance PB...small chances, small price tags.
Dier more likely to get a transfer soon- more possibility of MB.
i overthink myself but basically if you think he will go up, you buy, if you dont, you dont.
The guy is still young and a talent but seems injury prone to me so im out, simples. I may be wrong but I live with my decision based on a few rules. I met him in hospital also
Very many of the established PB performers have been driven up in price (largely justified in most cases) so a combination of new users not fully understanding FI, spare bonus cash & an increasingly desperate search for "value buys" has lead to average squad players being touted as IPD value or PB potential. Twitter appears to be the favoured pumping medium but there's clearly coordinated groups who are all "independently promoting" different players every day to their twitter followers. Genuine tips are clearly acceptable but the way certain experienced users are clearly coordinating their efforts by trying to manipulate the innocent into buying what are essentially worthless holds is disgraceful IMHO.
I knew twitter was generally a toxic swamp but FI users need to be very wary of these coordinated pump & dumps.
I've made good profits on Dier in the past.
The truth of the matter is, when the Euro's roll around he will indeed be in the mix and as the majority traders (and new traders) convert from being a club fan to being an England fan... that see's him increase.
You saying he has no value... means that you think the only value on FI are dividends.
Likewise, I think some short sighted people don't understand how important peak years are for a footballer. Go back 3 years and Sterling was seen by a lot of people as a joke, who can't deliver the final ball or finish. Those people were idiots, who couldn't see the lad was still developing in to the machine he is today. Van Dyke at 25... an average-decent centre back at Southampton. Van Dyke at 27, the best defender in the world winning the Champions League at Liverpool.
That's why a 25 year old, who's already got 7 years first team experience including playing the Champions League final, 4 years worth of international matches including, captaining England at the World Cup, has value.
@Dan-The-Man You're right I am saying that. The only thing that drives or creates value on FI are dividends or the perceived prospect of future dividends. There is literally nothing else that provides foundational, underlying value behind these fictional "shares" we are buying in players.
@Westy But that is my point. Compare Dier or Henderson for that matter to similar status players in other PB leagues and I wager they would be far more expensive, despite a similarly tiny likelihood of winning divs. My thinking is this is probably because of the exotic attraction of the unknown. If FI was available in France or Spain there would probably be loads of French and Spanish traders wondering why all this money was being funnelled into such average prospects.
@Wotabeast It's basically pump and dump. Quick profits for the pumpers and burning for those who fall for it.
Dier is better than most of them. He has actually won MB twice:
@Wotabeast I see what you mean.
@Londoner Exactly - if Dier played for Levante or Nimes he would probably be double the price. On paper he's FI gold in the current market. Thing is we all know that aside from what we see on paper, he is a rubbish hold. We don't have that knowledge or experience with a lot of the players in the foreign leagues, and because of that they fly.
I recently made 100% cap app on Jose Campaña for example. He actually did win PB once last season and has a decent PB average but he hasn't come close to winning so far this season yet his price has doubled.
@Dan-The-Man The only thing that drives or creates value on FI are dividends or the perceived prospect of future dividends. There is literally nothing else that provides foundational, underlying value behind these fictional "shares" we are buying in players.
Sure there is.
I fully understand why you think that way though.
@Dan-The-Man There literally isn't - everything else that rises in price without any realistic hope of dividends or history of dividends is a pyramid where you have to hope other people jump on and then you jump off and pocket your profit, potentially leaving those who got on last high and dry.
Dan The Man
@Dan-The-Man everything else that rises in price without any realistic hope of dividends or history of dividends is a pyramid where you have to hope other people jump on and then you jump off and pocket your profit, potentially leaving those who got on last high and dry.
That's the game.
You think it's any different for your dividend earners? There's a tiny amount of players who will return 100% worth of dividends and the later you are to the table, the less chances you have.
@Dan-The-Man Of course it's different! For a dividend earner anybody getting on at any price has the chance to make a return on their investment through dividends over the course of a 3-year hold. If you buy a player who has close to zero chance of returning dividends then you are literally relying on others buying at a higher price than you did, and then you jumping off, in order to make a return.
Yeah, that's a nice theory...
These aren't companies that go from strength to strength and pay regular dividends. Players go through dips in form, transfer clubs, changes of management, injuries, changes of team mates, changes to the competition.
By the time they are proven dividend winners, they are already pricy... often over priced, so you either get in super early on guys like Dier, hoping he becomes the next big thing or you buy a high risk player, hoping he maintains form and holds his value as the market continues to change around him.
In reality, you're needing the player you have now to maintain his price and dividend record until you get out, which means you are betting on cap app not dividends. You're just picking players that might give you an added bonus.
@Wotabeast is absolutely right.
If every trader asked themselves THREE SIMPLE QUESTIONS before investing, we'd see a much more top-heavy index again, dominated by QUALITY football players...
Question One: Why are you buying that player?
Answer A: "He will earn dividends for me"
Answer B: "He is likely to go up in value"
Question Two: What makes a player go up in value?
Answer A: "When other traders also buy him"
Question Three: Why would other traders buy him?
Answer A: "Because they think he will go up in value too"
Answer B: "Because they will earn dividends from said player"
If somebody could knock up one of them fancy Venn diagrams using this info then it would make it much easier on the eye 😉
I'm sold - I'm in for a 1,000 👍
@Ericali 😂 I should've ploughed some money into Dier before starting this thread!