Being Realistic

  • With the seemingly daily fall in player prices which obviously breeds negative sentiment and fear throughout the FI community it is easy to not be objective and act irrationally. I have taken time out this week to take a step back from the endless daily trading of selling and buying back at lower prices to try to stem the losses and to look at things with an open mind.

    The product

    FI as a concept is brilliant (I think we would all agree) getting it off the ground and running was a great achievement and the owners need to be congratulated on that. They developed the product from being based solely MB to PB and then added IPD and TOTM. However as any start up that try's to disrupt there marketplace (sports betting) there are costs and when IT is involved these costs are huge. At some point they have to move from loss making to profitable and this would never be possible on a large scale whilst in effect underwriting our bets for us by offering instant sell.

    Now we all agree that FI have handled things badly and could have communicated so much better and made some decisions differently that would have helped but objectively thinking I do not believe the end result would have been any different. Instant sell was basically a tool to get the product of the ground which looking back was unbelievably generous and I wish I had thrown so much more money at the platform when it existed as it was in effect a no loss bet.

    Writing on the Wall

    When IPD's were introduced I am kicking myself for not seeing the writing was on the wall as overnight the platform gave us a massive clue that it was transitioning from a medium term capital appreciation model to a short term gambling product. I actually posted about this at the time (to dumb though to follow my convictions as I was still blinded by the easy profits).

    Current position

    Currently FI is in a position the management I believe are comfortable with and expected to be in. Although on a daily trading basis dividends paid are more than commission earned they are still and have been throughout the collapse of people selling players for way more than they paid FI for them. So basically they have a huge stash of our cash that we bought shares for at much higher prices sat in there bank.

    I expect they anticipated a lot of this and are currently waiting for player prices to reach a point where existing traders are unwilling to continue to keep undercutting each other. So presently we are part of the problem as yes we can keep selling and buying cheaper which seems like the right thing to do but I believe it just delays what we all want which is recovery and a stable company that we believe is a safe home for our cash.

    The Future

    The product will become a more hybrid gambling platform targeting daily/weekly/monthly gamblers which in turn generate much higher turnover which will lead to a profitable company. I expect more IPD/TOTM opportunities, the new later 8pm cut off encourages more day trading which gives us a clue.

    There will still be long term trading opportunities but traders that buy, collect dividends and wait for capital appreciation is just not profitable for them and therefore we will have to adapt as the platform will need to be volatile to deter long term holding.

    The Good News

    Once prices reach rock bottom I expect an absolutely massive marketing push and promotions galore. Because we are driving prices so low and because FI will have a large bank balance (through our original purchases and capital raising through the financial markets) they may well be able to create more liquidity through separate market makers (LP1 may return with several others) and will hoover up lots of shares at low prices and then during the massive marketing push sell them back at increased prices. This will hopefully bring onboard many more traders and as there initial experience will be good should create a client base that moves FI forward into a new era, unfortunately many existing traders will have been collateral damage along the way.

    My Actions

    Yesterday I added a significant sum and will continue to add in the run up to Christmas where I see players whose value has dropped to levels where I can sit back and harvest dividends and where there price would look attractive to short term traders as well. I personally believe we are really close to a big push and when it happens I do not see player prices falling for several months. Having suffered for months I would hate to be the person who now sells waiting to buy back to find they announce the marketing and then has to pay more to buy back!!

    Have a great Christmas everyone and here's to a much more profitable 2021 on FI

  • @Fletch

    An excellent analysis i would only slightly differ with your conclusion; FI are under this scenario just promoting a boom/bust market product & they are gambling that they can develop a sustainable platform & profit more from the winning, remaining traders + new entrants than it costs them in burning losers + loyal traders.

    I suspect that they can make that a profitable model but whether it's sustainable is highly unlikely, just read the Trustpilot, Social media stuff & their previously most effective recruiting Sargent (loyal traders) who would recommend the platform to all & sundry - can taxi wraps & slick marketing replace them effectively???

  • @Geronimo159387

    I think that once prices start to rise and there is green on new traders portfolios lots of people will forget the past (we might not) but greed is a very strong emotion!

    I do not think it will be boom bust but I see a lot players prices trading constantly in a up/down zone of around 25% as people constantly trade in and out of them chasing match day profits.

    Injuries, suspensions, winter breaks, Internationals, summer promotions, transfers will all cause these fluctuations just like in the past but with more impact as many new traders chase instant wins.

    Personally I would have liked to have seen 2 transfer windows when some sort of much paired back version of instant sell was available from FI to encourage the medium term traders as well.

  • @Fletch

    There are currently a very large number of trapped hostage traders/£££ & many who have finally lost patience with the inept mismanagement of the platform but refuse to take the low prices/minimal liquidity currently on offer. There will be a very long queue at the exit door whenever a decent opportunity presents itself for the foreseeable future IMHO & this selling pressure will limit any price recovery.

    The potential lasting reputational damage the last few months have inflicted will also limit the volume of new £££/traders (despite the impressive yields available) so whilst ever the amount of £££ leaving (or trying to) exceeds that being attracted to the platform then no appreciable market recovery will be possible & the longer that continues the harder any future growth will be to achieve.

    FI mgmt have been given many solutions & ideas (from trader feedback, even if they had failed to identify some for themselves) to help support the current market but if they choose to ignore them it will only encourage a further exodus & falling prices & low market confidence as a result.

  • @Fletch

    If there is a giant marketing push.... and new customers look beyond the Trust Pilot and the forum posts and the countless Twitter posts... won't the new users just be taking the place of existing users?

    For example, I have 300 Telles. If he jumps back up any where near the £1.50-£2 mark, I'm probably going to exit my hold on him.. and then when the marketing train stops, aren't those newbies going to be hit with the crushing lack of demand that we're all experiencing?

  • @Fletch Excellent It’s actually nice to read a well constructed, thoughtful analysis of the current situation. Instead of all the end is nigh stuff.
    Roll on 2021 and a brighter future for traders.

  • I can't see many new users joining when the market hits rock bottom, as mentioned above, trustpilot, twitter and the forum and full of negativity (rightfully so) and nobody will invest serious money into the platform currently, I know I definitely wouldn't have if I were to join now.

    We can look at how prices have fallen and see the potential returns and know there's a possible great opportunity to make money if you were to join now/soon, but a new user isn't going to be so optimistic and I definitely wouldn't recommend it to a friend currently, although I can still see potential, the risk isn't worth it.

    When I joined I researched everything I could about the platform and at the time I first deposited, only 2 of the top 200 had dropped in price over the past 12 months (Lacazette and Ronaldo). Everything was rockets and profit and people are more likely to invest in a market which is rising than falling.

    12 months ago my friends had no interest in buying Bitcoin at $6k, now they're buying it at $20k. People are irrational and we probably wont get a mass influx of new users until we start to see rockets again, and we wont see rockets until we get a mass influx of new users.

  • @Geronimo159387

    I actually believe that the large number of trapped hostages traders as you put it whilst been sympathetic to them, have little impact on the future as if they have not sold by now they will be waiting a very very long time for the price they bought at to return. In fact the old prices they bought at are not relevant in what will be the new look index. Prices will increase but it could be years before players return to the old prices and if they do it will be on the back of continued annual dividend increases.

    Reputational damage whilst being significant will not hold the product back as probably 90% of gamblers have never heard of it and I doubt traditional punters do not look to deep into it. If prices are increasing from a very low base greed and self interest will take over. High net worth investors will look deeper but many will judge investments on the current and potential future prospects rather than its past.

    Yes there are many obstacles but I do think you have to look at a product as it is today not what it was. If I am buying a new stock for my portfolio I look at current and future prospects far more than the past.

  • @Dan-The-Man

    Hi Dan you make a good point, but it actually only backs up my point as if Telles doubles from his current market price he just about gets into your range of £1.50 - £2.00 and if that has happened there will be plenty of traders willing to take him of your hands as the index will have grown significantly and therefore sentiment will be good. Additionally Telles would need to have shown much better performances on the pitch circa to Robertson lately and therefore will be worth the amount.

    Telles is currently 74p bid 78p offer so why a 50p spread on what you would sell him for - surly on a player that price £1.50 would be enough and if you were hanging on for £2 indicates that you would be riding a rising market waiting for another massive % increase in his price from £1.50 to £2.00.

    This highlights the mentality of traders and when things go positive we are more greedy!

  • @Fletch

    Not sure I agree there will be no place for people who just want to buy a player, sit tight and collect dividends. There will be some players where I think you'll be able to do that and the dividends will make it worthwhile so you don't need to worry about CA. Obviously you still need to be somewhat active due to the three year rule and the fact players move etc, but I think you'll be able to be passive to some degree.

    Same as the stock market, there are some people who day trade and it's a full time job and you have to target shares with high volatility. Then there are some some people who just buy shares in safe prospects and collect the 3% dividends.

    Once the market has reached it's new level there should be a variety of trading strategies which will work. I just think we're still a long way off from that level for the majority of players. Under the new regime most players are going to be the equivalent of penny stocks, high risk but potentially high reward with just a few higher priced solid earners.

  • @Fletch

    Whilst I agree on your price point, many traders aren't even looking for a return of "old prices" they are just looking for sufficient liquidity or performance price spike to be able to get out AT ALL. They will have a significant short/medium term effect (depending on how many & how much £££ wants to leave) on the platform for at least the next year & possibly beyond IMO. They have remained for so long as they both believed the many promises they were given by FI & despite continual failure to achieve them they continued to give FI the opportunity to deliver (despite the overwhelming evidence that this wasn't going to happen).

    We disagree on how much reputation affects potential new users joining, especially those that want to deposit significant sums, so to assume that they'll be the answer is rather naive IMO. An interesting comparison is the P2P lending industry that had the same/similar market disrupter, great returns backed by bricks & mortar USP's that FI can boast & it boomed for several years but that market has now crashed with many/most firms either being in administration, bankruptcy or managed wind down & most had far smarter, capabable management teams in place than FI benefit from.

    Having a great product (whilst important) is no guarantee of success especially when it is managed so incompetently as FI have been for the best part of the last year.

  • I've deposited £150 this week. A sum that I hope to double over the next year, but small enough that I am prepared to lose if things go pear shaped.

    Cautiously optimistic, but treating it is a gamble rather than an investment at the moment.

    I'm not prepared to deposit anything larger for now, but it is easy to get drawn in as the new deposit earns dividends and grows. I'll review my position next month.

  • I am far from impressed with the management of FI and they have contributed to a miserable year for traders on the index. Liquidity is shocking on many unfashionable players, however the majority of highly traded top 200 players have generally had days where you could have sold and moved on. Now for many reasons people have decided not to take these opportunities so will have to wait. I am not sure what the answer is for the non PB league players and others that are now potentially worthless but this will not hold other people back if they see future opportunity.

    I am not trying to argue the rights and wrongs of the past I am just trying to look forwards. P2P lending was always highlighted be many in the financial industry to be high risk and dangerous and as someone working in the financial advice industry can say that none of the major advice providers in the industry recommended it as if something looks to be too good to be true it is. As for smarter management teams many have been proven to be far from that.

    FI will be in continued talks with HNW individuals and it could be argued the current prices are the most attractive time for news investors to join. Reputation will be quickly recovered if people are in profit, look at bitcoin it continuously gets trashed in the press but continues to crash and then recover. Again it always comes back to human nature and greed

  • @Fletch said in Being Realistic:


    Telles is currently 74p bid 78p offer so why a 50p spread on what you would sell him for - surly on a player that price £1.50 would be enough and if you were hanging on for £2 indicates that you would be riding a rising market waiting for another massive % increase in his price from £1.50 to £2.00.

    The £1.50-£2 price range would be dependant on how quickly he got back to that level and under what circumstances. The longer it takes, the less I'd accept, particularly if there were some div wins along the way.

  • @Honeylight I’m similar, I have a strategy of depositing £50 per week while it’s uncertain. I won’t miss that money if it goes wrong. I won’t be putting in any larger sums anymore or until I can see there is a sustainable improvement.

  • @Fletch

    We're clearly largely in agreement on most of this, & I like you could see FI retreating to just a top 300/400 player tradeable market (it's where the only current liquidity can be found anyway) & succeeding on that basis, which effectively writes off 85%+ of the current players on the index. How they manage getting there will be equally if not more as challenging as the disastrous transition towards OB's has been!

  • @Fletch

    FI created an innovative product based off of the most popular sport followed by millions of passionate fans. A good proportion like to be able to make money on a topic they think they know well and the U.K. population do like a punt / investment and are not adverse to risk (although fairness is a principle that is held very dear..).

    The product has changed and coming to it fresh now as a punter, I think has every opportunity to boom again. I would enjoy the product with ‘new money’’, I think we are getting to a market valuation that fits the rules that exist now (maybe a further slight dip to come).

    FI need to solve the ‘trapped’ clientele & money is the only way to solve.

    I have loved the journey since Oct 2017, plenty of time, effort and enjoyment. I made nice profit, but then a 270% drop in portfolio value and every running bet from March 2020 being a material losing bet, due to rule changes to remove FI liability has FI grappling with unfairness sentiments - they do need to address .

    Seems to me that FI must offer clients with bets running pre-March 2020 an equitable way out. Options could include :-

    a) Close out bets and make them a non-runner and return stake (with a premium)
    b) Restart bets with 3 year shelf life with rebates on price drop
    c) Mint new player shares and give to impacted traders to dilute the loss
    d) Provide FI trading balance (with withdrawal restrictions)

    This will likely cost big money and run into the £millions.

    Long term traders are reasonable and FI cannot fund then they need to think of options to fund.

    Maybe unique offers such as FI equity (allow long term traders to have skin in the game of success).
    Maybe a fund raise will bring a war chest to solve and just offer hard cash to resolve the sense of unfairness.

    In the meantime the drop continues, dividend yields increase and the new game looks promising. I agree FI are driving to a short term trading, game rather than a long term one, but not for those that bought into the hype of £7, £10 then £15 player valuations (propelled by FI themselves) then the increase yields will never recover the cost of the bet.

    Rule changes and product implementations need to be fair; IS, Order Books, Market Makers, Nasdaq, Liquidity, I think unfairness is the FI problem and they need to address to move forward.

  • @Happy-Hornet I mentioned something similar on another thread a while ago, running along the lines of your give readers back their money with a premium. I suggested allow people to exit holds they had put in but in a credit format, so you can only buy back into the market with that money. Yes the money can be taken back out at the next hold but it would get money moving and ultimately allow traders to re-enter into the market at the current market rather than the former.

  • @Geronimo159387 @Fletch Good discussion guys 🙌🏻 enjoying reading it with a cup of tea. I agree with Fletch, it is suspect that they have all these terrific suggestions and ideas from Traders regarding fixing the market mechanics, but they are letting things play out for now. Almost like they are waiting. Whether that be for new IT/Nasdaq, a massive marketing push, MM’s, for ppl to stop undercutting each other- who know’s.

  • My Actions

    "Yesterday I added a significant sum and will continue to add in the run up to Christmas".Good luck with that,I wont be giving this site another penny.All I can say is be careful.Ive returned to just football betting and top scorer in league 1 that way with topscorer bets,it at least runs for a few months and ive got a few long shots as well as the poshs top if FI offered me 50% of my money back I would leave in a heartbeat,only want half of my share value to be gone.

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