Do the players truly hold value?

  • Hi all,

    I was in a conversation with a friend the other day and it got me thinking. The best yielding player in terms of dividends over the last 3 seasons (Pogba) has under £3 of dividends. He is first by some way. This makes me think that as you are buying a 3 year hold of these players and for the vast majority of expensive players available you aren't going to see a decent ROI. If enough people start to believe this surely the price will come crashing down and a lot of people will lose money. If you hold shares of a business you hold them for as long as you like, not 3 years. The only way to make decent money with dividends is to buy young cheap players and hope they explode. This is what I've taken away from this anyway. Let me know your thoughts and I'm interested to know if I am completely wrong here.

  • @Pwaca Resale price after your hold?
    The price of players should theoretically be their projected career dividends.
    So yes, you’re miles off the mark. Unless of course any player in question you expect to have three years or less remaining of their career.

  • I no longer hold Pogba, but if someone said to me that they had invested money in stocks or a savings account that had given them 40% returns in less than 3 years, I am sure they would be reasonably happy with it.

  • @Timothee-Atouba their value should be the expected dividends for the rest of their career, no?

    So Neymar at 28 is expected to return £8 in the next 5 years?

    Aubamayang is expected to earn £2 in the next 4 years? He’s never earnt close to that in the last 3 years. This is why I say I only see value in young players, there comes a point where players are worth nowhere near their values and a lot of people will surely lose money

  • @Moukoko this is true but again the 3 years ago he would have been a 23 year old and this value at that age is much better value.

  • There is instrinsic value in all of the players because of dividends. Whether their price represents good value or not depends on your assessment and required returns.
    You're right that youth is advantageous, but with that comes uncertainty and lack of data, so prices are for the special ones like Sancho and Fati etc.
    Messi is a great case study for this right now....he smashes it up on dividends still but his career end is in sight and so you need to factor how you maximise the sale price and time it right......classic game of chicken incoming.

    In other news....I accidentally hit log out a month ago and have been locked out of the forum until now. Ready to unleash verbal diarrhea now.

  • @Pwaca you forget that holders can always sell the players before the 3-year deadline to recover or get additional capital gain. You can make profit as soon as the Purchase_price is less than (Sell_price + dividends). Nobody waits for the 3-year deadline expires and do nothing.

  • I find this whole viewpoint about value = dividend return very curious. Undoubtedly higher dividend potential correlates to higher share value but the notion that a players value is directly assessed by their future dividend haul is, to me, fundamentally flawed.

    Lets say youve got a 50p player who wins gold day star man. That's 16p. By this logic hes only worth 34p a day later. Does anybody think hes dipped 32%? I predict he settles at about 58-62p.

  • @MickTurbo The market overreacts to dividend wins though and when a player has just won pb is the time where the market is most likely to price them incorrectly. There’s so much reactionary, impulsive money on them.
    Look at Kroos three months ago. One of the easiest players on the index to attempt to value.
    Knew he would win regular dividends but people continued to pile in after each dividend win like it was a surprise and it very quickly sent his price too high. The price he was immediately after the dividend increase was much more like his real price than the £5+ he became.
    So unless there has been a fundamental change in a players role/playing position/managerial change etc. etc. there really isn’t much need for a price change after a pb win.

  • @Timothee-Atouba I completely agree but that is the reality we are faced with, which blows logic out of the water.

  • @MickTurbo The market (fortunately) doesn't behave rationally which is what allows for so many opportunities to trade as it over-reacts to both good news and bad news.
    Funnily enough one of the most rational increases was in Ziyech today - which has been questioned by many. He is going from 10 games a season he can compete for PB to 50 games a season. Ziyech and Bruno have been 2 of the more rational rises lately in a fairly irrational market.

  • @MickTurbo It sure does. It’ll quickly give anybody sensible a head spin trying to understand this market. But the projected career dividends=price theory is the one a players price should drag back to once the hype and pumping of any given player subsides, as it is the only logic of pricing despite how hard it is to do.

  • @Timothee-Atouba again I agree

    @janner73 with Fernandes I completely agree, but I do wonder if the rise of Ziyech today was in part driven by FOMO with Fernandes' meteoric rise and enormous dividend haul of last month fresh in peoples minds

  • @MickTurbo For some. But for me, Ziyech has every bit as much PB potential as Bruno - he wont have the MB pull that Bruno has but for PB his numbers are right up there - admittedly there are 6 months until he kicks a ball for Chelsea and there may be better times to get in than now but he'll be £3.50 minimum by the time next season starts.

  • @Pwaca a player returning his value in dividends is the ideal scenario but many people gauge the players value based on what percentage he can return. Ive heard a lot of mention in the past and on podcasts that the ratio generally is that a player should return 20% of his value over the 3year hold meaning a player that returns £3 in three years should be valued at about a limit of £15

  • My dividend returns are almost keeping up with my commision so you def need them.

    Also they act like small deposits to buy more players.

    Anyone going for just capp app and no divs at all could lose it all pretty quickly.

  • Strange thread, when a company does well its share price goes up. If you want to buy into that company after it has had a successful year then it will cost you more than it did a year before. Will the dividends cover the cost of the investment? nearly always no but it is an investment so you can then sell them same shares you brought to someone else at a higher price who wants to be involved in the new safer more profitable company.

    Buying a player is trying to buy dividends, if he wins dividends regular then his price should rise. You don't need a player to cover his costs in div wins to offer value.

  • @Pwaca

    There are two things that happen on FI.

    1.) The vast majority of people buy players who they've heard about.

    2.) The vast majority of people hear about players... long after their best rise has happened.

    Jadon Sancho is rocketing right now, because his transfer story has heated up but anyone chasing him at this price, are missing the idea that next year there'll be another Jadon Sancho... and they could be on that guy right now...

  • @Dan-The-Man said in Do the players truly hold value?:

    There are two things that happen on FI.
    1.) The vast majority of people buy players who they've heard about.
    2.) The vast majority of people hear about players... long after their best rise has happened.
    Jadon Sancho is rocketing right now, because his transfer story has heated up but anyone chasing him at this price, are missing the idea that next year there'll be another Jadon Sancho... and they could be on that guy right now...

    Correct; VJ was last year's Sancho & just look at his 12 month price graph to see how that went!

    A major flaw with the current market logic is that ppl buy not only the players they've heard of & that they rate in real life but for reasons like an England call up or transfer rumour. All of which are irrelevant to the players true price. Yes it generates buying & price rises but it's simply based on hype & has no fundamental underlying value to back it up (which is provided by dividend income stream, or potential of it).

    Rises in Zyech & Bruno are based largely on their excellent compatibility to the scoring matrix, which if translated to their new PB clubs should make them PB winning machines, of course that remains to be proven. 16 year old prospects might prove to be the next Rooney or Messi but it's heavily odds against which is why their current £3+ prices are extremely vulnerable to "" style price crashes.

  • @Dan-The-Man thats bang on, also the strange thing with sancho is... nothing that came out in the news yesterday is “new” news, so anyone whos been following him and knows a bit about it already knew that he is likely to move to the prem in the summer.
    Jumping on while hes rising like he was yesterday in my opinion is crazy, id class that as a missed opportunity. months ago when them same rumours were around but just not been on the “transfer special” on sky sports was the time to buy if buying for the transfer... personally i got on last summer as a punt that this would be his last season in germany... they wont sell him for 100 mill though, gonna need to be a fair bit more than that!!

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