Prepering my Portfolio for Share Spliy
It is not much more than a month ago that a posted a thorough update on my first 6 months journey on FI documenting how I had made significant returns whilst drip feeding £15,000 into the index. This seemed to be well received by several of you and so with the share split coming I thought it may be helpful to document how I have reacted to this announcement and made improvements to my portfolio.
Firstly I have added an additional £1,000 so have now invested £16,000 and my portfolio and cash balance now total £23,750 so the last few weeks have been very kind and my dividends continue to flow freely. However a month ago I had 41 players I now have 54 and feel very ready for the share split in fact the sooner the better as there is little I can do until it happens - Why?
I will first explain my beliefs on what I think will happen in the future and then explain what I have done to my portfolio to hopefully benefit from it.
- I think that the share split will be 4 ways so increasing my shareholding in players by a multiple of 4
- Dividends will initially fall by a division of 4 but maybe with rounding up to avoid 0.25 or 0.5 of a pence amounts
- Top 20 Players being perceived as more affordable will rise significantly by the end of 2019
- Outside of the top 20, players will rise but will be on a player by player basis not automatically like the top names
- A serious dividend increase will happen but maybe not until August 2019 in readiness for the new season
- FI will be working hard on a getting an acceptable and future proof website ready for the 2019/2020 season
- They probably have not decided that in the future when player prices are high whether they use share splits or move us to buying fractional amounts of players. I believe share splits will work much better the buying shares in fractions.
- I do not believe FI will ever add France, Italy, Germany or Spain to our platform but will look to set up a new platform for European countries dependent on individual country law. Ideally I believe they want a UK version and a Europe version with other countries joining the one which is best suited to them. (see end of post for reasoning) *
- This may disappoint some who are hoping for this but do not worry I believe we are in for a massive growth spell over the next 18 months as FI is only now getting its message out and new traders are joining in huge numbers so the new lower prices will attract plenty of buyers and a dividend increase in August will further boost the index.
- I then believe by 2020 things will settle down and earnings may lower from there high level they are now to a lower but still attractive amount.
Therefore what have I done:
I have set my portfolio up for the future where dividends are increased and are a much bigger driver of price than they currently are with the hope I will be collecting daily. To do this I have bought shares in the majority of the top players in multiples than when multiplied by 4 are at a level I would like to have them today but cannot afford. This way when dividends are increased in the future I will be ready.
So I now have:
150 Neymar, Salah, Kimmich
100 Rashford, Dembele, KDB, Havertz, Brandt, Kane, Sancho, Sterling, Griezmann, TAA.
50 Gomez J, Vinicius, Pulisic, Neves, Hazard, Dybala, Eriksen, Jesus, Messi, Martial, Mbappe, Sane, Mendy B
25 Bentancur, Stones, Tielemans, Lenglet, Shaw, Haller, Piatek, VVD, Pepe, Richarlison, Asensio, Sule, Coutinho, Rodrygo, Sarr, Linguard, Rugani, Jovic, Mount, Skriniar
I also have futures in Keita, Markovic, Maxi Gomez, Nandez, Muriel, Vieira R, and Dowell which I am currently short term playing with but once they reach the right price will be disposed and I will move a 25 or 50 share player up to 100.
Once completed I believe I will have to devote less time to the index and can either add to my portfolio with the dividends or withdraw to create some tax free income and reduce my risk.
To summarise do not worry if you have just joined you are not late to the party 2019 should be a fabulous year to be investing it is not until the platform becomes mainstream circa 2020/2021 that % returns will drop from there massive double/treble digit returns to single digit in my opinion.
- I believe as well as desperately needing a new more reliable and interactive website the meeting with Nasdaq may well have been to discuss the problem of having one website where players are priced in both Euros and GBP as I cannot believe any of the other main football countries would be happy buying in GBP. This is incredibly difficult as currency prices are changing every second. Players would definitely have be fractionalised for it to work and FI would need to hedge currency so further complicating the business. Add in that if you add in European sources for Media you would instantly see mass selling of the UK based media buzz starlets at that point (currently Pogba). Therefore it makes so much more sense to roll out a European version priced in Euros and with Media based on mainly European media. This should not worry any of us as the UK market is huge - Previously millions did the Football Pools, now millions bet on matches via traditional bookmakers, spread betting is growing and hopefully FI is just the next progression of football betting.
Great post Fletch - I will re-read it tomorrow when I’m at my desk and can digest it fully.
I’d say another stumbling block for the Index expanding into other countries is the currency exchange adding another element of risk.
If the pound drops during an overseas user’s trading period then they could potentially cash out at a huge loss despite making decent gains on their portfolio.
You have a solid portfolio their Fletch that has covered all bases. And your rationale is sound. You have obviously given it some serious thought which is good. It was a long post, Tolstoy would have been proud, but well worth the read read. Good work 💪🏻
@Fletch Thank you for your thoughts and insight. I hope you are wrong about the major European countries not linking directly to the UK platform. But as you said we are in a extremely strong market regardless and there are many other countries that can join our party!
Your rational is good. Just wished more dividends could be done to spread money on more players in index.
I would suggest a little patience is required it is not out of the question if enough new active traders are in place be the 2019/2020 season we may find that on Triple match days we find there is PB for 1st, 2nd and 3rd and on Double match days PB for 1st and 2nd.
G & A will have to continue to be incentivised or we will all just sit and bank our dividends.
FI will need to become fast and nimble at continuing to change and develop as the user base expands and I really do think they need the new website asap as it will hold them back. 2019 should be fun
@Fletch The extra places on PB are inevitable I believe. As the average price of winning player vs dividend earned is getting less and less over time.
More casual are getting awareness of FI too....
@Fletch yes that will be great, keep G&A and tiered PB payouts for that format:
single match day - 1st
double match day - 1st, 2nd
treble match day - 1st, 2nd, 3rd....simple enough for everybody to understand and would be mightily effective !
Anyway good post and good job with your port ;]
Great post Fletch
I believe as well as desperately needing a new more reliable and interactive website the meeting with Nasdaq may well have been to discuss the problem of having one website where players are priced in both Euros and GBP as I cannot believe any of the other main football countries would be happy buying in GBP. This is incredibly difficult as currency prices are changing every second. Players would definitely have be fractionalised for it to work and FI would need to hedge currency so further complicating the business. Add in that if you add in European sources for Media you would instantly see mass selling of the UK based media buzz starlets at that point (currently Pogba). Therefore it makes so much more sense to roll out a European version priced in Euros and with Media based on mainly European media. This should not worry any of us as the UK market is huge - Previously millions did the Football Pools, now millions bet on matches via traditional bookmakers, spread betting is growing and hopefully FI is just the next progression of football betting.
Nice post @Fletch, very good read. I would like to debate FI expanding in the European market as I have a different view. Yes I argee the currency problems are hard to over come. It could be something that the European player just have to deal with. I'm not dismissing it, I just don't know if there are any good solutions.
With regards to the media. The best idea I can think of would be to make the MB payouts local to each country, using there relavent local news soucres, but have the players traded on the FI worldwide.
EG: Mauro Icardi scores a hat trick in the derby. He'll win MB in Italy and all Italian FI users would be paid out for the win. Meanwhile in the UK Pogba gets a new hair cut and wins MB for the UK based FI players.
I think if they just add in extra sources from other leagues, it would weigh very favourably to the internationally recognised players. Neymar, Messi and Ronaldo can win MB with just British sources with EPL players winning if they do something newsworthy. If they add in other countries, I think the combined stories about them 3 will out weight any localy relavent new to any league. If they want to go down that road and make one worldwide Index I would suggest they change the media souces very slowly. Like add and remove one each month til they get were they want to be, giveing the market time to adapt each time.
The next point I would like to make is if FI launch a European only Index, I can see massive problems getting traction without our liquidity. At the start of FI it took very little money relative to now, to get a players price to move up or down. Now it takes £1000s with the top players. They can't discount the prices on a new European site, as yeilds would be higher for European players, and I believe those of us that could would pull money from here and move it to the European site. So they would have to launch it with the same prices as the UK site, listed in Euros of course. The next problem to having different indexs is prices will get out of kilter pretty fast because the European Index would have much lower liquidity. For example say Pogba scores a hat trick, money would fly into on the UK site in the £10.000s, people would be ISing other players to get on, adn there price would be falling. Meanwhile on the European Index that has just launched Friedrich, Günter and Gabriel buy Pogba aswell but his price doesn't move for them because the European Index hasn't got the user base we have. Then we get back to prices being out of kilter again.
Very good post, and raised some interesting points.
@Fletch looks very good that mate. Sounds very similar to my strategy other than i haven't really bought any of the very prime level players. Reduced my number of players and bought less of the higher quality players with the idea that I'll have 4x as many in a few months.
I've bought with the idea that I still think some of the £3-£7 level players are underpriced and I think they could potentially rise a lot in the next 2 year's mainly focussing on english/Brazilian players and high quality player i can see getting transfer speculation etc such as dybala and griezmann cos both to me seem like they should be higher.
Could be tempted to buy some of the very top level players if I get some spare cash but happy with my portfolio right now.
@Fletch very envious of your portfolio, you won't go wrong with that. It will fly.. great stuff.
Glad you enjoyed it and may I say you are going above and beyond with your work here. I do not disagree with you that it would be brilliant for us to be part of a monster index that includes all Europe and maybe it should be on the agenda. However I believe that the current ownership are most likely to take the path of least resistance to getting the business to a scale where they can either sell a % of the business for a significant amount of money that makes them all comfy for the rest of there lives.
This will be possible by reaching a certain turnover/profit which in all probability entails - share split, improved website, future dividend increase and further advertising. They complexity of European gaming laws, currency, opening European offices, changes to media buzz probably means it is beyond there ownership period, however starting a European version would be a lot simpler and maybe falls within there ownership timeframe.
The issue of leaving this platform and joining the new European one would not happen as I guess you would only be able to join the one your residency allows.
However all this is just conjecture and for me immaterial as my belief and plan only last until the end of next season as I believe the following:
Feb/Mar 2019 share split and further double digit growth
August 2019 Dividend Increase and further double digit growth
Jan 2020 Continued new members from advertising and further double digit growth
April 2020 platform returns start to level out and sell 80% for massive profit
May 2020 onwards play with and enjoy the 20% left in and bank dividends
What was the value of the top players before the last share split ?
Great post! All the best with your portfolio. 👍
Quite a few traditional betting sites can switch easily between usd and gbp. You just choose the one you want to bet in.
Any traditional bettors will be well used to playing in usd too.
I don't think it will be that hard to implement here once they get crunching
This is a great post for someone like me who is just starting to learn about FI.
It's great to see your portfolio and look at the choices you have made to compare to the players i have on my radar, and of course how much money you are prepared to invest in it.
It seems that if you are willing to invest a sum in the £1000s you may be able to increase your portfolio worth quite significantly (with of course investing in the right players).