Overvalued



  • Since the new dividends were announced I keep reading that the market is undervalued. I’ve seen people say this player can make their price by Christmas, or similar statements. Outside of a few players, it’s very hard to see where this is coming from. In my opinion, the market is largely overvalued. There are some consistent dividend returners, there are some very cheap punts near the bottom, and lots of nothingness in between.

    There are multiple players worth in excess of £2 who earnt less than 5p in match dividends last season. In play dividends, whilst good now and clearly contributing to current volatility, will drop soon and a month is not a particularly long time to earn from them. It seems like lots of price rises are being driven in this new market by a belief in imminent returns, which is simply not going to happen for the vast majority of players. For example, Salah only returned in 20 league matches last season. I know that many of you know that, but judging by the market activity of late a majority do not.

    It goes without saying that this current volatility will put people off the product at a key time, and in turn cause more problems. But I think it has to be considered whether this volatility is also the market continuing to move towards a more accurate place than it is at now.

    There will be people that have been here much longer than my few months but I’ve studied the stats, the dividends for matches and media, and it’s very hard to see value in so many players. At present, FI doesn’t look like a particular safe or stable place to keep money. I’m continuing at present purely because it’s still fun to a degree and because I’m waiting for in game performance to boost the sell values of some of the players that I own. But confidence is clearly low and it isn’t baseless either, and it’s also very notable that certain long-term punts have dropped recently. I really like this concept but I’m not overly optimistic and the more I know the less optimistic I get.



  • @Timmy to put it simply, after the FI backed IS (or buy any player you want risk free) was removed, now people quite rightly only want to buy players that return a good rate of divs or have the potential to do so?😆



  • @Timmy said in Overvalued:

    There are some consistent dividend returners, there are some very cheap punts near the bottom, and lots of nothingness in between.

    There are current only 40 players on the entire index that would NOT yield over 10% dividend return with a single Gold day star PB win, that represents a very decent ROI for a single performance (which even average players are capable of once every 3 years). Any that can win or compete on multiple occasions can easily return 30/40/50% of their price in the current season, whilst dividends are likely to remain at the current level or higher over the next 3 years, that the bet is valid, it's not unreasonable to forecast regular winners could return 100%+ of their current price.

    Will all players return that? Clearly not but even those without a PB game can win MB, IPD & GK dividends, so although current market conditions are choppy & the early phase of OB's clearly has too limited market depth (which means hugely volatile price swings) the longer term returns look particularly generous & attractive when compared to other financial assets.

    You correctly point out that many players are currently overvalued, but that has always been the case, every breakout 16 year old simply isn't going to become the next Messi/Neymar/Bruno but the were often priced as though that was a certainty. However the proven performers can & will win dividends to not only justify their current price but much higher levels in the future.

    Market stability & confidence will only return as prices become justified by the returns that dividends bring but given we are only 4 days into the new higher dividend era I think that writing off most of the players, who still haven't played a single game, might just be a bit premature.



  • @Geronimo159387

    You make a lot of good points, of course, and I am well aware of the potential for players to score well. But star players on a gold day tend to come from a select group - studying dividends from the the past year or two illustrates how few players return significantly from these. For every player earning 20-30% of their value there will be 20 not going close to it. Obviously there is a value in certain assets but I think the general idea that the market is undervalued is wrong. And with the potential of a haul also comes the potential of a significant injury, or a bad transfer etc.



  • @Timmy said in Overvalued:

    I think the general idea that the market is undervalued is wrong.

    There's no way to buy the market though, you pick the undervalued players from within that marketplace & there are very many to choose from, across all price points. I have recent bought Neymar at <£8 as an almost certain 100%+ dividend returner but also quite a few GK <50p who I believe will do the same should I hold them for the full 3 years. I could list at least a couple of hundred others that had a decent chance of doing the same just as long term holds, upto 3 years.

    There's also another long list of IPD plays that should return 10-20% ROI over a short (upto 1 month) term hold. There are many profitable ways to play the index given that dividends are double there highest previous level & lots of prices are the lowest, or very near, that they have been in 12 months. I genuinely think there are more profitable opportunities across the index currently than at any time since I joined over 2 years ago but as you point out you need to pick the good ones not the stinkers which is the gamble we are all taking.


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