Compulsory valuations



  • So much talk about players' value at the moment, when it's effectively determined by those either desperate to sell and panicking, or bargain hunters.

    What is obvious is that the majority of traders are just perplexed by the current prices, slightly concerned by sentiment and just sitting it out and quietly topping up.

    Devil's advocate, I thought it would be interesting to imagine a scenario where it was compulsory to value your holds and define a players value (exit point). Every player must be allocated a sell price which you can change at any time.

    For arguments sake, let's assume there is a 3 year renewal system introduced with only 2% commission.

    Too many players in my portfolio to go through all, but I'll start with a few players I've topped up on recently

    Lautaro Martinez
    Average Buy Price = £2.00 - £2.10
    10 year career ahead
    Current 28p Gold Star Man payout (2019: 58% increase, 2020: 100% increase in divs)
    3 world cups ahead, Cope America (if ever becomes PB eligible)
    Big transfer rumours (Barcelona? United/ City also need a striker), foreign media being introduced, yet to hit peak, no major injury concerns, growth of index over next 10 years

    Min Value (point at which I would currently sell) = £5

    Amine Gouiri
    Average Buy Price = £1.70 - £1.80
    12 - 13 year career ahead
    Current 28p Gold Star Man payout (2019: 58% increase, 2020: 100% increase in divs)
    3/ 4 world cups ahead, 3/ 4 Euros playing in one of the favourites. Benzema's successsor? Style of play suits current matrix.
    High probability of big transfer, foreign media being introduced, way off peak, no major injury concerns, growth of index over next 10 years, regularly playing at decent level

    *Min Value (point at which I would currently sell) = £5.20 - £5.50



  • Marcus thuram

    1.22 on the ME

    In his locker to win PB

    France debut this weeek so proven ability not just hype.

    Big transfer ahead

    23 years old

    Got all the ingredients.

    One I’ll be topping up on when his price drops on Thursday.



  • @Metropolis Current sell price for both is £1.59. On that basis I wouldn't pay more than £1.65.

    If you bought at £1.65 today and had the opportunity to sell for £2.00 next week or £2.50 next year wouldn't it better to cash in a guaranteed return. Setting a Minimum Value of £5 at which you would sell is a gamble and not guaranteed.

    Even if you decide to hold, you still need to value your port based on what it is worth today (£1.59 ish) rather than a future prediction. That is why some people have got themselves in to trouble.

    I paid £360,000 for my house 7 years ago. It is now worth about £450,000. In 3 years time it might be worth £480,000. Owning a house might also save me 36 x £1500 = £54,000 in rent over the next three years. Despite this the value of my house today is £450,000 not £534,000.



  • @Honeylight as I said, the 'prices' are not consistent with 'value' though if 0.1% of traders are determining the price. Similar problem to having the lowest 300 shares as the IS price isn't it?

    What is missing is a way to assess value attributed by the majority.

    Valuing players on the bids of a few is akin to political leaders listening to fanatics, or businesses basing their decisions on the few wildcards.

    Having compulsory valuations would allow us to see 99% valuing a player at say £4 - £5, but the current trading price is £1.65. On that basis, I'm either raising my offer (if selling) or snapping up the bargain (if buying).
    We need to separate 'price' and 'value'.

    The entire valuation system is based on a scared minority and balance is needed.

    As for your question on guaranteed return, I see it as more of a longer term strategy so £2.50 is too low considering the future potential of the shares.



  • @Honeylight said in Compulsory valuations:

    @Metropolis Current sell price for both is £1.59. On that basis I wouldn't pay more than £1.65.

    If you bought at £1.65 today and had the opportunity to sell for £2.00 next week or £2.50 next year wouldn't it better to cash in a guaranteed return. Setting a Minimum Value of £5 at which you would sell is a gamble and not guaranteed.

    It depends.

    If his valuation is right then No. Selling £2.50 is a bad thing to do.

    Valuations should essentially be the average projected returns. If he values at £5 then there should be as much chance of the valuation being right as there is being wrong. If you value 1000 players at £5 then you would expect some to be more, some to be lower and some to be £5 but the average to be £5.

    This is how professional gamblers make money. If they can get odds of 5-1 for something that they think has a 1 in 4 chance of happening they take the bet every single time. Yes they will lose a lot but they will be up overall. That is how professional gamblers work and in reality is how traders need to work. You have to take on risk providing that on balance, the returns outweigh in.

    So no ... you are wrong. If he truly believes the player will return £5 he should not sell for less than that unless the circumstances change.



  • @Tom77 said in Compulsory valuations:

    Marcus thuram

    1.22 on the ME

    In his locker to win PB

    France debut this weeek so proven ability not just hype.

    Big transfer ahead

    23 years old

    Got all the ingredients.

    One I’ll be topping up on when his price drops on Thursday.

    Ok so how much is he worth ?

    Look at his yields. Past return - probability of media and so on, how much is that worth ? Its not easy but unless you attempt to value, why are you topping up ?



  • @Honeylight assuming that your house is not for rental purposes, then the value of it is purely whatever someone will pay for it and not what it will return you (in dividends for example), so I don't really agree with the analogy relating to valuation, but I do sort of understand your point.



  • @Metropolis said in Compulsory valuations:

    @Honeylight assuming that your house is not for rental purposes, then the value of it is purely whatever someone will pay for it and not what it will return you (in dividends for example), so I don't really agree with the analogy relating to valuation, but I do sort of understand your point.

    Exactly ... very different.

    Football Index is a bet. If you expect that bet to return you £10 on average why would you sell it for £9 ?

    The only rational reason reason would be because you think there is a bet you can make for that £9 that will return more than £10

    Its all very well talking about risk. But this is a gambling website, you must take on risk or you can't play.



  • This is a very good thread ..

    I consider most of my buys rational but its probably a good idea for everyone to go away and think about exactly how much their bet is worth as a bet regardless of how much it is trading for. Objectively. I tend to do this sort of thing in scribbles in my head when I buy someone but will probably go away and stick something on paper (well a spreadsheet).



  • @SDOAFIT yeah, good idea. The challenge is pedicting yield.

    I guess potentially FI could add a player screen for 'predicted yield' or 'possible yield range' to each player? With so much data available this would be relatively straightforward in principle for sone players.

    So, for example, Kimmich. Same club, consistent performer. Average yield past x years vs current/ future circumstances, trading patterns etc. Expected yield range = £x - £x.

    The obvious issue here is the unknown. The young players who could go one of two directions which would likely create a highly speculative and big spread (for predicted yield)? But I guess thats the risk vs reward with youngsters.



  • @Metropolis Okay poor analogy, but my savings are rising by £1500 due to not having to pay rent.

    My point is - future potential is reason for buying or holding, but current value is the price that someone is prepared to buy for.

    Value your ports at Sell Price not Buy Price or (even worse) predicted future value. If you predictions are correct and get dividends and CE your port will rise in value.

    Just don't count those chickens before they have hatched.

    Valuing players over 10 years is risky. They might get injured, find god and become a priest, get jailed for tax evasion or drink driving. move to China/US. You can't predict what will happen towards the end of their career - Ashley Young moved to Inter and is still earning divs, Juan Mata was rumoured to be moving to Turkey with no div potential.

    The same with younger players. Linguard had great potential a few years ago. He could be earning divs somewhere, but is sat on the bench at Utd.

    Media is a gamble. Who would have predicted that Rashford would be an ambassador for kids. Who predicted that Maguire would get publicity for being shit or getting arrested in Greece. Or Mrs Rooney and Mrs Vardy earning more publicity than their husbands.

    Future potential is opinion and no two people will arrive at the same valuation.



  • @Metropolis said in Compulsory valuations:

    @SDOAFIT yeah, good idea. The challenge is pedicting yield.

    I guess potentially FI could add a player screen for 'predicted yield' or 'possible yield range' to each player? With so much data available this would be relatively straightforward in principle for sone players.

    So, for example, Kimmich. Same club, consistent performer. Average yield past x years vs current/ future circumstances, trading patterns etc. Expected yield range = £x - £x.

    The obvious issue here is the unknown. The young players who could go one of two directions which would likely create a highly speculative and big spread (for predicted yield)? But I guess thats the risk vs reward with youngsters.

    I think FI would be on dangerous grounds doing that. They should have the yield from last 1 year available though then people can make up their own mind.

    Your right, its incredibly difficult to project youngsters. As players get older they tend to be more of a focal point, they get more set pieces and so on so their PB will often improve.

    I've tended to use older players as examples as forecasts are a little easier.



  • @Metropolis I don't understand the point - who in their right mind would buy Martinez for £5? He earnt 18p last season (28p if current rates are applied). And he earnt that money largely because of Europa league football, no? He isn't even that good a player. His average for the last year is 85 points per 90 minutes and 69 per game...His game doesn't suit the current matrix and it's pretty easy to prove that with these numbers. He isn't going to kill it with the foreign media, which will still be centred around the UK, and there are bigger foreign draws anyway.

    This looks like you are massively overvaluing a player with a poor PB game, and no one would pay £5 for him under these new market conditions. His price should be around the £1.50 mark. It's bonkers to imagine that someone is worth around 18 times their earnings from the previous season. It's a 3 year bet with commission on top for every flip, IPDs last only a month, there is the risk of injury, tactical changes, regression, bad transfers etc etc.

    And that's why I don't see the point in these valuations, as any valuation should be built upon inherent earning potential dictated by dividends. That's where this market has moved to and although it is too low at the moment, the days of betting on capital appreciation with a lack of pb and media game to back it up died with the guaranteed IS.



  • @Honeylight said in Compulsory valuations:

    @Metropolis Okay poor analogy, but my savings are rising by £1500 due to not having to pay rent.

    My point is - future potential is reason for buying or holding, but current value is the price that someone is prepared to buy for.

    Value your ports at Sell Price not Buy Price or (even worse) predicted future value. If you predictions are correct and get dividends and CE your port will rise in value.

    Just don't count those chickens before they have hatched.

    Valuing players over 10 years is risky. They might get injured, find god and become a priest, get jailed for tax evasion or drink driving. move to China/US. You can't predict what will happen towards the end of their career - Ashley Young moved to Inter and is still earning divs, Juan Mata was rumoured to be moving to Turkey with no div potential.

    The same with younger players. Linguard had great potential a few years ago. He could be earning divs somewhere, but is sat on the bench at Utd.

    Media is a gamble. Who would have predicted that Rashford would be an ambassador for kids. Who predicted that Maguire would get publicity for being shit or getting arrested in Greece. Or Mrs Rooney and Mrs Vardy earning more publicity than their husbands.

    Future potential is opinion and no two people will arrive at the same valuation.

    That's why its a gambling website.

    A player is worth their future dividends. That is pretty much undisputable because that is what they will return.

    You should value the player on what you estimate they will return. You will get a lot wrong but you need to be on average on the mark.

    Its difficult but if you don't try then you have no idea what you are buying.



  • @SDOAFIT said in Compulsory valuations:

    @Tom77 said in Compulsory valuations:

    Marcus thuram

    1.22 on the ME

    In his locker to win PB

    France debut this weeek so proven ability not just hype.

    Big transfer ahead

    23 years old

    Got all the ingredients.

    One I’ll be topping up on when his price drops on Thursday.

    Ok so how much is he worth ?

    Look at his yields. Past return - probability of media and so on, how much is that worth ? Its not easy but unless you attempt to value, why are you topping up ?

    No one knows that but he has big factors to earn dividends and on the right track so i know he is a good hold.
    His agent is also raiola so prob of mb is high, fact he looks very promising will also get media attention.



  • @Tom77 said in Compulsory valuations:

    @SDOAFIT said in Compulsory valuations:

    @Tom77 said in Compulsory valuations:

    Marcus thuram

    1.22 on the ME

    In his locker to win PB

    France debut this weeek so proven ability not just hype.

    Big transfer ahead

    23 years old

    Got all the ingredients.

    One I’ll be topping up on when his price drops on Thursday.

    Ok so how much is he worth ?

    Look at his yields. Past return - probability of media and so on, how much is that worth ? Its not easy but unless you attempt to value, why are you topping up ?

    No one knows that but he has big factors to earn dividends and on the right track so i know he is a good hold.
    His agent is also raiola so prob of mb is high, fact he looks very promising will also get media attention.

    This pretty much argues my own point for me.



  • @SDOAFIT said in Compulsory valuations:

    Football Index is a bet. If you expect that bet to return you £10 on average why would you sell it for £9 ?

    Punters regularly cash out for less in play. If I have £10 on Man Utd to beat to Liverpool 3-0 I might cash out early in case Rashford scores a brace in the last 5 minutes.

    A single goal could ruin the whole bet in the same way that a career ending injury or move to China might.



  • @Honeylight said in Compulsory valuations:

    @SDOAFIT said in Compulsory valuations:

    Football Index is a bet. If you expect that bet to return you £10 on average why would you sell it for £9 ?

    Punters regularly cash out for less in play. If I have £10 on Man Utd to beat to Liverpool 3-0 I might cash out early in case Rashford scores a brace in the last 5 minutes.

    A single goal could ruin the whole bet in the same way that a career ending injury or move to China might.

    Professional gamblers would only cash out if they thought that the lay bet was worth the odds. Professional gamblers think in probabilities which is what you have to do as well.



  • @SDOAFIT said in Compulsory valuations:

    @Honeylight said in Compulsory valuations:

    @SDOAFIT said in Compulsory valuations:

    Football Index is a bet. If you expect that bet to return you £10 on average why would you sell it for £9 ?

    Punters regularly cash out for less in play. If I have £10 on Man Utd to beat to Liverpool 3-0 I might cash out early in case Rashford scores a brace in the last 5 minutes.

    A single goal could ruin the whole bet in the same way that a career ending injury or move to China might.

    Professional gamblers would only cash out if they thought that the lay bet was worth the odds. Professional gamblers think in probabilities which is what you have to do as well.

    To add to that ... the majority of punters lose money gambling, Professional gamblers don't. If they are going to stay being a pro gambler anyway.



  • @Honeylight Fair points but the prediction is not just about whether players will win divs or not. It's how other traders will perceive their potential to do so. We're trading as much on others' perception of players than the players themselves.

    In Martinez's situation, the probability is high that

    He will improve as a player
    Stay in a PB league
    Compete in Europe
    Regular starter
    Get a big transfer
    Compete on the international stage
    Score goals
    Attract media
    Be at his peak in 6 years. How will divs look then?

    And most importantly, other traders will view him as a more valuable asset and more likely to return divs, whether he actually does or not. Its about their likelihood of doing so.

    At the end of the day, we've all got to believe in somebody, and money will go where the higher odds/ chances exist.

    Judgement is being clouded at the moment due to various circumstances. The pricing/ valuation method being one if them


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