Bottom end strategy - a discussion.

  • Banned

    I would like a proper discussion about the bottom end of the market, what has changed and how it impacts. Please don't make this discussion about whether or not IS should have been removed. It is about impact rather than actions and there are plenty of other threads for that. It is about what happens going forward. This is NOT a post about the past but the future.

    I am thinking of a new challenge to do with the bottom of the market buying and I am hoping this thread will help with the forming of that.
    I have found making money is easiest by going against the crowd, and wish to explore if this is viable now (I am failing to see an angle at this time).

    For the avoidance of doubt, I stress it does not bother me whether it is viable, and I am not exposed to the bottom end of the market. Every player I own (except a small holding in one) is because they are making dividends OR have strong potential to.

    For me personally, trading at the bottom end is not something I have really dabbled in. I feel it is too risky and I prefer safe holds, as my signature will attest to. That said, since I have been here, a familiar theme has been 'the beauty of FI is there are many ways to make money' here and the bottom end has always been pointed out as a common theme. I would like to explore how the risks were mitigated to a point, and how this is affected going forward.

    As most of you know by now, I work on percentages. This is especially lucrative at lower levels.

    An example: I buy a player for 20p (I won’t name him, there is no need). That is his base price (see article further in this post). For every 1p up, I make 5% profit. For every 1p down, I make 5% loss.
    In this example, I buy for 20p but the spread is short, I know I can ‘sell’ the bet for 18p. Whether this is right or wrong is immaterial, it is something offered by the site and something they have said they won’t remove. So my risk on this bet is only 10%. If he hits MB or other dividends, I can make 10% profit on him. And then add cap app on top.
    Now, to make that cap app, I will need someone else to buy him. So I sell for 22p. That means someone has bought for 22p and spread is 20p (on average, it is an example). So the new buyer is not being dumped on, he is again risking 10% loss for 10%+ profit because he knows he can IS too. I am passing on an opportunity.
    This has now changed. Now, I buy a player for 20p, I am risking the full 20p. And if I do manage to sell him onto someone else, I am just passing the full 20p risk on. To win 2p. As it stands, no-one is going to take a risky bet to win 2p. This has thus rendered the bet one that is unwilling to take. And is MORE likely to shaft the next person, if you manage to sell. Because instead of selling them a bet where they can win 10% or lose 10%, I am selling them a bet where they can win 10% or lose 100%. And the players are cheap for a reason, so it is more likely to be losing 100%. By removing IS so abruptly, they have ensured people are actively trying to sell on bets that are now bad. And have become bad because of the IS removal.

    For more details on how I work out percentages I have just written this article. It is about percentages but uses another site as an example. Please don't make this a discussion about the site, they are opposite ends of the risk curve and not in any way appropriate due to the way the sites run. I just use it as an example of potential profit and losses at this end of the market. I will be sad if anyone turns it into a discussion between sites, as I have put a lot of effort into both that article and this thread. (This post alone has taken me 2 days to write, from note form to posting).

    So, the discussion is this….
    Going forward (and ignoring any bets made, lets just assume people have lost their money and it’s done), is their potential to again make money at the lower end?
    Or do we accept that how it used to be, there is no bets to be made, no money to be made. And on that basis, should we be lobbying FI to remove all the players with no potential?

    (Edited to put in paragraphs)

  • @MrWh1te there is definitely money to be made but consider what you think an acceptable level of demand will be. No point buying 10000 shares if i you know you will never shift them.

    My advice is that small holds in many players is the way forward and that applies to the entire index not just the bottom end of players because the demand for any player can completely disappear at any time. If a player dies or moves to china you have no chance of selling, you may just have to accept your loss.

  • Stick to players that actually have something going for them and you should be ok.

    Buy Endo, swerve pemberton
    Buy Barberis, swerve Shikabala
    Buy Ilsanker swerve Marquez
    Buy Le Goff swerve Cheshimi
    Buy Viola swerve Colndres
    Buy Letschert swerve Aseri
    Buy Benali Swerve G Gomez

    Basically, use your head and you'll have a chance, but that should really go without saying

  • Said this on a different thread. I tested a few players on FI ME to see how low i could buy someone. Tried to still choose a player with an 'out spike' in the future (this one would need a transfer to a PB club). I got him for 9/10p a price was 30p. I am now nearly finished selling all of them at market price within about 3 days of holding. I never expected to be able to sell now at 194% ROI. I was happy to wait until any transfer rumours got people buying. I imagine the person buying thinks the same with the transfer, but why they are buying using the market price button i have no idea! I am tempted to try and buy more again at the same cost price, and again wait long term, but wait with them listed on the market price. I wont buy any cheapos at market price- just trade the in-between whilst there is no commission on bid buys.

    Flip side, there are hundreds of players now on the Index with no bids...all the no hopers from the wcup squads i think- these, along with the retired (Crouch et al.) need removing asap. But when you start removing due to possible value, i think we could narrow the index down to 500 players tops. At this stage, in this phase, most will never return enough dividends over their career.

    Cue dividends rise- but still most of these players wont win any.

    I have a very diverse port which even for a divs based trader, i still had big holds (shares wise) in some cheapos- IS was always the back up for these, but now looking at big losses if ISd. There's still a chance they become more valuable, but i wouldn't have bought so many of them and I was waiting for the official phasing out of IS to make decisions.

    Lucky I'm diverse enough to have not felt a hit yet. The same top players always drag my port up when market booms. Does make me rethink my strategy though- lots of dead money around, very few % of players carry real worth. I need to either condense into about 20 players (from 165) or sell up and just trade announcements and moments. As a long term holder, I'm starting to think only a small part of my port is worth holding long term now.

  • @MrWh1te

    I’ve rocked up only a few months ago buying mainly sub £1 players. I’ve bought them and am still buying them because i see multiple reasons why each and every one will rise a reasonable amount. Of course I have no experience and could be completely wrong. Some players have clawed back a good percentage in IPD and I believe they need to spike once/twice unless they stabilise at a higher price. Some are internationals, some have been injured, some are hinting at comebacks etc.

    What do you mean lobby to remove players? Are you talking about sub 20p or is Jack Wilshere (42p) or Hal Robson-Kanu (29p) who could get promoted and could come out of international retirement (Might not!) somebody you want rid of? Is Max Meyer (55p) somebody you want rid of? On the bench, played out of position but could go back to Germany, be a number 10 again and get capped again. We all see value/potential in different players. I still believe we can make money in cheap players if multiple reasons are applied for purchase... particularly if ME is used well.

    I’m really interested to know who you want rid of and how that’s fair. I’ve bought small amounts of the big guns who I see rising £s with platform growth and providing divs. I’ve bought sub £1ers because I see fundamental reasons why they’ll go up. I haven’t bought a lot in between because they could go either way. Why would we want to limit choice, strategy and variety of opportunity, trader and skill? Yes “There’s a reason why they’re that price” bla bla bla but there are reasons why they’ll rise.

    You’ve made some great comments on here and obviously done well but is it just 9p Saudi Arabians you want rid of or PL benchwarmers?

    Many thanks

  • Banned

    @PaulM the 36 year old no hopers I am thinking of.
    If a player has zero chance of divs, then selling them on here is surely immoral?
    I have no idea how to judge it though

  • @MrWh1te

    Many thanks.

    I definitely feel there’s value in 30ish age players that I’ve bought around the 30/40p mark. Jay Rodriguez is one but take Dominik Drexler. I bought him at 37p when he got two assists. Was amazed he wasn’t going through the ticker because everybody upto that point with a goal/assist was flying. So 2 assists is what? 6%ish of 37p. He averages a goal every 5 games so if he does anything else during IPD that could be 8/9% back then might be able to sell on 1 spike in three years (More and more new traders maybe chasing divs) might just be an early kick off or only game one night. Could gatecrash Europe. Might not happen of course.

    Forgive me for talking about my hold but I think IPD can be a massive starting boost (Not a sole reason to purchase) for real cheapos but yes of course, 36 year old no hopers can go. Apologies if 37p is above what you consider bottom end. Hope there’s value in my comment.

    I guess what happens in terms of players intro ahead of next WC will be interesting.

  • @MrWh1te

    I think you pose an interesting question, and its a conversation worth having so thank you for taking the time to pose it.

    I think that yes you probably can still make money down there, like you this is not something i do, personally i could never work it out, every time i bought someone circa 60p their price just went down and down so i soon realized i was a pretty shit bottom end trader, hence i don't do it.

    I hear what you are saying that there are players without an IS price so betting on those players entails a 100% risk, but that risk is only temporary. IS is determined by the market now, (not FI) and if the market deems a player so risky now that there are no bids then ok, but that is not the fault of FI, there is obviously a reason behind that but at the same time its not permanent if market sentiment towards that player changes then the bids will come in and the prices will rise. 3 years is an awful long time in football. It might not even be a sentiment problem, perhaps its just that not enough people (i.e most if the market) actually know who the player is because the player in question is just too obscure right now, (like exactly who was jadon sancho 3 years ago), but if more people did know about them then maybe you would get interest and bids on those players, even if its just in the form of cheap IS bids rather then actual demand to buy at market price. This can occur naturally as the players career progresses, or by promotion from holders just to raise awareness of that player and potential, note how i said promote not pump as in back your shit up with some valid reasons why it worth jumping on the bet, either way your risk is lowered over time by either or both of these effects. If anything having no bids on a player makes the bottom end of the market easier to navigate for users new and old as the really really bad holds now stick out like a sore thumb, where as before a 2-3p spread may have masked just how risky betting on that player was.

    As for removing players, yeah i agree that there is a lots of players that shouldn't be there due to retirement, but do you remove all the dodgy world cup players i think not, would you not have to re-IPO them in 4 years if they then appear in the WC, that seems like a strange situation which is probably best avoided.

    Another dynamic that the ME system has opened up, is that if there are no IS bids then "the floor is open" as they say, which provides a completely new opportunity which was not there before, you can go in an pick up shares at the absolute rock bottom (see ericali's attempted take over of odian ighalo as an example, personally i think this was a shocking bet, but the theory of what he was trying to do was correct) which again limits risk, due to the lower expenditure.

    Also a div increase could also help, i know people always think of a div increase as only helping the top end, but it depends on what they do, eg if they put an extra penny on IPD or included CS for defenders or something like that, then that would be a massive shot in the arm for the bottom end making it far more attractive.

    I think that there is still money to be made at the bottom end but i think people will just have to work a little bit harder for it and it may take longer and i think they will have to show a lot more commitment to their holds then they otherwise would have done before (because you might not be able to IS on the basis of 1 goal), but hey its the bottom end so you can have a gazillion shares in the player (cause they are so cheap, especially if you are getting on with no IS where there is the greatest risk), but with taking on that risk entitles you to the the biggest profits at the end of it, and that's why there will always be a market for that sort of speculation after all there is no such thing as a free lunch as they say.

    As for passing on bad trades and the morality of doing as such, say if you had a player buy price 20p with no IS bids (big massive warning sign) and you list him and someone buys him. Well to me that trader that's buying should have gone in with their eyes open and if they want in then they want in that's their decision and nobody to my mind should be held accountable for that other then the buyer and certainly not the seller, i.e. (especially now that the dump in a pump and dump is now defunked) your not selling a 20p risk, they are buying it of their own volition for their own reasons, perhaps they see an opportunity that you don't as the seller if not then perhaps they are just a bad trader, again not anybody else's fault, it is what it is really.

  • I hold a lot of sub 50p (even sub 30p players) and obviously the market doesn’t look great for them at the moment.

    But everyone just needs to chill. The market works in cycles and at some point they will be popular again. Either FI will introduce a stimulus to make them more attractive (higher IPDs or some limited form of IS) or the top end of the market will simply grow to such an extent and the spreads will become so tight, that cheap players will begin to look great value again.

    I’ve put in a few cheeky low offers on cheap players, but it’s actually reassuring that I’ve had very few takers. I think a lot of holders are prepared to hold until better offers or cap app come along.

    There are plenty of good footballers out there, with decent PB scores and several years left playing in PB leagues for sub 50p. Now that MB has been opened up, they also have another possible string to their bow - Deeney is a good example of a player available for less than 50p who wins MB several times per season.

  • @ocs123

    My portfolio consists of mainly sub £1 players. I’ve been successful with some bids but equally if a player is only 30p then there aren’t that many traders/shares to sell. Also, if it’s a young player, traders will still hold out hope. They won’t want to sell then the player takes off.

    And, I hope... every dog (Player and therefore their shares) has its day!

  • @PaulM

    They will definitely have their day over the next 6-12 months. Providing they have some sort of inherent value through occasional MB, a shot at PB on a bronze / silver day or regular IPDs.

    The cheap players who will continue to suffer will be the pump and dump rubbish who play in the Peruvian 3rd division or those who retired last year.

  • I'll give you the best bottom end buy, I don't hold him but @29p or if lucky someone sells for 10p.
    🥁🥁🥁🥁 Thiago Silva....psg still in champs league, still plays for Brazil he's old but good in 2 years maybe his bow out world cup, rumours of Ac Milan ....knows his way around a dividend win what's not to like I'd rather buy a 100 of him than a 100 of Sancho 😎

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