The Transition - Hold Your Nerve

  • I am of the opinion that the current transition FI is attempting to effect from a 'gambling' platform to an 'investment vehicle' is probably as a result of the number of barriers to gambling products in many of the countries into which they would like to expand. This and the whole Nasdaq transition takes time. I think FI is doing its best to keep things moving along in the interim. We do have a tough market at present, no denying that, but if I am right and this period paves the way for an eventual global expansion then we may all be smiling very broadly in three years' time.

  • @Le-Blanc I agree with you. Throw in COVID and money being tight on an unprecedented scale and it’s clear that conditions won’t be like this forever. People just need to focus on dividend yield and don’t invest what they can’t afford,

  • totally agree with this. This is short term pain for long term gain

  • It's just a correction. The players were never worth what people were buying for when instant sell was about. There is still a good way until we hit some kind of equilibrium with player prices. The 2% buy commission on bids will only push players prices down further. Still think we are not close to the bottom yet.

  • @Tom7471 I think you’re right. We’re still higher than when I reinvested in August, around the point when potential returns became difficult to ignore.

  • @Richio people love the idea of getting bargains now but in 2 weeks they could be awful bets. You can't bet on a gambling platform when you pick winners and they still come out losers. Absolutely mad.

  • I'm more in this mindset, I haven't really sold any of my portfolio other than tk reinvest im better opportunities. But still can't help but ask myself all the same questions that are being asked on other threads.

    Basically, what is it going to take to turn things round? We can't just sit blindly in hope while our money slips down the drain.

    How is increased liquidity going to help as people say? For me the fact that the security of instant sell is now gone is too much for some people. So FI have increased dividends to amazing levels. What else is there left to do that will actually see capital appreciation play a part in this platform again? Or do FI actually care about that?

    A culture of panic has now appeared and its quite clear a lot of people can't get out fast enough.

  • @Tom7471 I definitely think people need to be careful who they invest in if they do so now. I’d say keepers and the bottom end of the market are far safer bets. I wouldn’t touch any of the premiums at the moment. They’ve all been overvalued for a long time. I’d be inclined to advise people to hold their money for a week or two and see where we are towards the end of the international break.

  • @Richio said in The Transition - Hold Your Nerve:

    @Tom7471 I definitely people need to be careful who they invest in if they do so now. I’d say keepers and the bottom end of the market are far safer bets. I wouldn’t touch any of the premiums at the moment. They’ve all been overvalued for a long time. I’d be inclined to advise people to hold their money for a week or two and see where we are towards the end of the international break.

    So you think messi is overvalued at a fiver? He could well return close to that this season

  • @Ddr no, I think he’s the one exception where it would be very difficult to lose.

  • @Stevo

    Increased liquidity helps by reducing risk. A reduced risk means you can buy at a lower yield. If income from dividends stays the same then a lower yield means a higher price.

    So as an example; when IS existed people may have felt that this was relatively low risk and may have been happy to achieve a yield of around 5% to 7.5%, So a player who returned a yield of £1 in a year could be worth around £13 to £20.

    With the removal of IS the risk of not being able to get out of a player had increased, so people would want a higher yield to compensate for the increased risk. If people now want a yield of say 15% to 20% that player is now worth £5 to £6.66.

    However as prices fall and liquidity drops people might be revising that yield upwards even more as the risk continues to grow. That 15 to 20% now becomes 25%. So that same player is only worth £4.

    If liquidity improves then risk decreases and as a result required yields drop and that player's value goes back up.

  • @Richio so your previous statement about all premiums being overvalued was false then

  • @Ddr well Messi’s a bit of a special case isn’t he? I hold Messi and Kimmich and I’m perfectly happy holding those two. But anyone else, no. I sold my Ansu Fati for a small profit at 6.05 last week because there’s nothing but FOMO driving that price. He’s not shown enough PB yet to know what he’s really worth.

  • @GeoffS thank you, that gives me a better understanding. I appreciate you explaining. Essentially, I dont particularly understand business and stock markets very well, I understand football and footballers, which is what originally attracted me to FI, the fact I could buy something I know a fair bit about and have fun whilst doing it.

    I reckon there's a lot of people the same as me who are now getting out because they simply don't have a clue what's going on and can't really see what needs to happen for things to get better.

  • @Ddr Messi was massively overpriced at £8 he is returning to a level that he might win his price in divs if all goes well. There is still a lot of risk with him also. The trouble is that there is no point him just winning his price in divs if he isn't worth much when he has won all the divs as you have only won what you will sell him at.

  • @Stevo

    Once the market finds it's level then football knowledge will become relevant again as every player will be at their base value and you then just have to find those that are going to do better than their base value. Appreciate that doesn't help in the meantime where players are finding that base level though.

  • @Tom7471 I think whilst there is a shift in prices happening here, I still think values are dropping lower than they naturally would. It's not like we have a load of reasonable traders who are saying 'hmm in the current situation, this player is not worth this anymore' - we have people panic selling and that is just a fact. I think the fair prices are somewhere between what we have now and what we had a few weeks ago (I said this on another thread too, sorry for the repetition).

    I think once NASDAQ and OB are introduced/reintroduced, it'll take some time and not all players will return to what they were, so we will see a recalculation of player's worth but we'll hopefully also see more stability (with volatility around match days perhaps) but not just a constant drop but ups and downs which can be explained.

  • @GeoffS basically what I was trying to say but put more succinctly.

  • @howsthebacon

    Ha Ha, it's very rare that people compliment me on my posts being succinct, normally they are a massive wall of text.

  • @howsthebacon I disagree I still feel that a lot of players are very overpriced and are nowhere near as low as they should be. If the index was started from scratch today I think a lot of players would be much lower if it was an efficient market when you will now have to win 4% when you buy a player straight away.

    The trouble is that there are some incredible value players on the index at the lower end but the problem is the disparity between how overvalued some players are and how undervalued some layers are.

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